Pakistan Economy - News & Updates - Archive

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Pasdec gets Rs 297.24 million for marble and granite development ​

ISLAMABAD (January 11 2008): The government has released an amount of Rs 297.24 million to Pakistan Stone Development Company (Pasdec) for development of marble and granite sector in the country. The allocation is out of the total amount of Rs 500 million reserved for the year 2007-08 in public sector development programme for the development of marble and granite sector.

It consists of establishing two machinery pools, one Model Quarry, three Quarry Upgradation, one Common Facility Training Centre and one Warehouse for dimensional stone, sources said. The project of development of marble and granite sector has high potential of earning foreign exchange through its export and the government has approved Rs 1,980 million for this purpose and planned to spend this amount on the project within three year.

Pasdec has been mandated to implement different measures through its projects for the development of sector and has awarded recently a tender to a local agent of DAEWOO Company for import of earth moving machinery from Korea.

Pasdec had also awarded another tender to an Italian machinery manufacturing company DAZZINI Machines for supply of quarry machinery, which would be used in first marble and granite "Model Quarry" in Khuzdar, Balochistan, the sources added.

Business Recorder [Pakistan's First Financial Daily]

 

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Government to draw Rs 32 billion from banks to rescue Wapda ​

ISLAMABAD (January 11 2008): The federal government will arrange to draw Rs 32 billion from banks to pay the hard pressed Independent Power Producers (IPPs) against amounts owed by the Water and Power Development Authority (Wapda), well-informed sources in the Finance Ministry told Business Recorder here on Thursday.

The issue is now being placed before the ECC for provision of GoP guarantee to banks on behalf of Wapda: Independent Power Producers had threatened to call GoP sovereign guarantees in case Wapda failed to clear their outstanding bills, as Wapda did not pay promised 50 percent of overdue amount by December 31, 2007. Wapda had written letters to the federal government including President's Chief of Staff for arranging Rs 52.1 billion of IPPs, oil companies, gas companies and others but the Finance Ministry did not take it seriously and the files were still moving around, the sources added.

The sources said the issue is now being placed before the Economic Coordination Committee (ECC) of the Cabinet for provision of GoP guarantee to banks on behalf of Wapda. Wapda's high ups were of the view that if the government did not fulfil its commitment several IPPs would not only shut down their operations but also call sovereign guarantees.

The sources said, the utility has also written letters to the oil companies to improve their stocks so that required input could be provided to IPPs for power generation during the crisis period. Meanwhile, G A Sabri, a top official of Directorate General Oil, in a letter to Pepco Managing Director Munawar Baseer, has clarified that in December, actual supplies of LSFO were 92,256 tons against the tabled demand of 100,000 tons.

Baseer had earlier accused Petroleum Ministry of short supply of LSFO upto 50,000 tons which according to Directorate General of Oil was 7740 tons. The sources said the Petroleum Ministry clearly conveyed to Pepco that it would supply the required 125,000 tons of furnace oil for January and 100,000 tons for February for Kapco, subject to timely payment and railway movement charges.

As regards the supply of 1000 tons per day LSFO from ARL, the supplies for January and February would be more ie 40,000 and 36,000 tons, respectively, for which effective coordination was required from the railways. HSD supplies by PSO from Mahmoodkot would also be ensured as per Wapda's demand, but of course subject to payment, the sources quoted Sabri as saying, in his letter.

Business Recorder [Pakistan's First Financial Daily]

 

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State Bank develops financing scheme for small farmers​

* Banks will provide loans to the members of small farmers' group for crop and non-crop activities

KARACHI: The State Bank of Pakistan has developed a financing scheme on group-based methodology for small farmers involved in crop and non-crop activities in order to improve the access to finance for such farmers who are unable to meet adequate collaterals requirements of commercial banks.

Under the scheme, banks will provide loans to the members of small farmers' group for crop and non-crop activities, based on their cash flow under joint cross guarantee of group members.

The scheme covers all areas of the group-based financing methodology including group formation, roles and responsibilities of members, bank and group coordinator, size and tenure of loans, documentation and other related matters. However, financing to small farmers under the scheme will be subject to compliance with SBP regulations on agriculture financing.

It may be pointed out that under group-based lending programmes, loans are given to individuals through a peer group. In this case, group members guarantee repayment of each other's loans and collateral is generally not used but peer pressure and collective responsibilities generated by the group take their place.

Financing under the scheme will not exceed Rs 200,000 per borrower, which is within the clean lending limits of Prudential Regulations for Agriculture Financing. However, the exact amount of the loan will be determined by the bank based on genuine requirements and cash flow of the applicants. Maximum period of the loan should be fixed as per Prudential Regulations, repayment schedule may be set as per production cycle of the crop/non-crop activities being financed or revolving credit facility for three years subject to mandatory clean up of the entire liabilities (both principal and mark up) once in a year or cash flow of the borrower in case of non-crop activities. Banks are advised that they should have detailed understanding and information about the borrower's business and his/her assets as well as his/her capacity to effectively use and repay the loan.

Moreover, under the scheme the loan can be extended for working capital requirement of the farming community both for crop as well as non-crop activities. Banks can also provide term loan facility to small farmers for making different types of improvements in the land, construction of sheds/ponds, development of orchards/nurseries, purchase of livestock, farm implements, machinery, tube wells, generators, etc.

The State Bank has advised the banks to arrange insurance of the amount of loan disbursed for crop and non-crop activities (wherever available) and life insurance of the borrower to safeguard the interests of the borrower and the bank, in case of losses due to natural calamity or events beyond the control of the borrower.

In addition, where the agricultural loans have been extended for specified purposes, the banks/DFIs are advised to ensure that the loans have been utilised for the same purposes for which they were obtained, the central bank said.

For this purpose, the banks/DFIs may consider it prudent to make payments directly to the suppliers wherever appropriate. However, this provision will not apply on farmers who are provided loans under Revolving Credit Scheme.

The outreach of agricultural credit is limited to the extent of about two million borrowers as against total farmers population of 6.6 million. Majority of the country's farmers i.e. 84 percent comprises of small farmers and rely on informal sector credit at exorbitant rates to meet their agricultural credit requirements. One of the main reasons of the financial exclusion of these small farmers has been their inability to provide collateral to banks. It is expected that the problem of financial exclusion will be mitigated with the introduction of group-based financing scheme for small farmers.

Daily Times - Leading News Resource of Pakistan

 

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Reserves fall to $15.55bn​

KARACHI, Jan 11: Pakistan' foreign exchange reserves fell by $19 million to $15.55 billion in the week that ended on Jan 5, the central bank said on Friday.

Reserves held by the State Bank of Pakistan fell to $13.27 billion from $13.50 billion a week earlier, while those held by commercial banks rose to $2.28 billion from $2.24 billion, it said.

Pakistan's foreign reserves hit an all-time high of $16.39 billion in the week that ended on Nov 10. But they fell because of outflows from the stock market after President Pervez Musharraf imposed emergency rule on Nov 3.

Emergency rule was lifted on Dec 15, but analysts said foreign investment is under pressure due to the tense political situation after the assassination of opposition leader Benazir Bhutto on Dec 27. —Reuters

Reserves fall to $15.55bn -DAWN - Business; January 12, 2008

 

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Banks borrow Rs43bn from State Bank​

By Shahid Iqbal

KARACHI, Jan 11: Money market on Friday witnessed a serious liquidity crunch, forcing banks to get help from the State Bank which says it will continue to follow tight monetary policy in the future.

Dealers said the overnight rate was 9.9 per cent just below the discount rate but the money was not available even at this rate. Banks borrowed Rs43 billion on Friday while the total borrowing from the SBP reached Rs90 billion this week.

The liquidity crunch was the outcome of the State Bank’s policy to keep the market dry in fear of inflationary pressure coming out from the inflows of dollars and building up of reserves money.

The SBP holds high food prices for inflation; however, the heavy borrowing by the central government was one of the major factors behind the monetary inflation.

“The SBP is in a difficult situation. It succeeded to tighten grip over monetary movement in the market but failed to refuse the government from record borrowing for the budgetary support causing inflation,” said a senior banker.

The State Bank would announce its monetary policy for the next six months by the end of this month and no change is expected regarding the tight monetary policy being followed for last two years.

Analysts did not find any chance for further tightening in the next monetary policy. They said more tightening could be counter-productive as flow of credit to private sector has already shrunk.

During the first half of the current fiscal, credit to private sector remained at Rs235 billion compared to Rs250 billion last year which indicates that credit growth will further decline this year.

Bankers said the economy could not afford further increase in the interest rates as the cost of production has already gone high due to inflation.

The SBP in its first quarterly report issued recently said the high CPI (Consumer Price Index) has started affecting the core inflation (non-food inflation).

“We are expecting more inflation as the government is planning to pass on the increasing burden of oil prices which recently reached $100 per barrel,” said Abid Saleem, an analyst.

Gas prices have already increased while the power rates are also expected to increase significantly in the coming days or weeks.

Analysts believe that collective impact of inflation, along with high food prices, will badly hit the cost of production and hurt the export already under pressure.

“Under the circumstances while a host of inflationary elements are active to negate the economic achievements, there is no chance for further increase in the discount rate,” said Abid.

Analyst and dealers said the liquidity scarcity will prevail for another six months in the money market and the change can only be expected after the outcome of the economic growth for the current fiscal.

Banks borrow Rs43bn from State Bank -DAWN - Business; January 12, 2008

 

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Poverty Alleviation Fund changing the lives of poor: World Bank ​

RECORDER REPORT

FAISALABAD (January 12 2008): Pakistan Poverty Alleviation Fund (PPAF) is making a difference in the life of the poor in the country and 1.5 million micro-credit loans (average loan-size US $150) have been provided benefiting nearly 9 million people, said updated World Bank report.

World Bank observed that the PPAF programme is impacting over 10 million people. PPAF has mobilised over 66,000 community organisations (COs) in 27,000 localities across 111 districts in the country. Mobilised communities are helping themselves and accessing services from civil society, government and markets.

According to a World Bank report, over the last 7 years PPAF has driven the micro-finance sector growth from 60,000 borrowers to more than 1.25 million active borrowers in the sector, while "Skill Development and Capacity-building" also improving. Over 200,000 people trained by PPAF in various skills including management, financial, mechanical and technical skills, water conservation, agriculture, horticulture, livestock, and marketing etc, said report.

The report disclosed that more than 13,000 small scale village-based projects have been identified, constructed and maintained by communities right across the country benefiting nearly 6 million people. These projects mainly include drinking water supply schemes, drainage and sanitation, irrigation, roads, culverts and small bridges. PPAF is also doing more innovative schemes that include: Integrated Areas Up-gradation Projects, Drought Mitigation Projects and Technological Innovative Projects, including Reverse Osmoses Plants, Drip Irrigation, and Solar Energy etc. Besides providing social benefits and improving the rural environment these projects have saved significant amounts in health related expenses in addition to providing job opportunities for local communities, WB report mentioned.

WB observed that PPAF supported projects are labour intensive and have generated significant amounts in wages. Health and Education (a recent pilot intervention): nearly 100 new education and health facilities opened by PPAF in the rural areas providing high quality services and benefiting primarily women and girls.

Commenting over the "Earthquake Restoration and Rehabilitation", WB report said that over 100,000 houses and 300 schemes are being reconstructed in the earthquake affected areas, with a special focus on the vulnerable, and disabled. Nearly 20,000 people trained in earthquake resistant construction methods, directly resulting in over 70percent compliance with earthquake standards for all houses under construction. PPAF is also regularly involved in relief work, including for the earthquake victims and more recently the flood affected; and has also initiated a special programme for the fragile coastal areas.

PPAF's institutional mechanism is seen as a best practice public-private partnership model; with its solid governance structure, private sector management and transparent funding mechanism and is being replicated in other Government programmes that are trying to deliver services to the poor. These replications range from education delivery in Balochistan, to rural telecom services across the country. Social Mobilisation has been mainstreamed in public policy and is now part of the poverty reduction policy and the Mid-term Development Framework of the Government.

PPAF has moved beyond being just a project and is now considered the private sector arm of the government's poverty alleviation agenda. The massive earthquake reconstruction work that the Government has assigned speaks of the trust and confidence that it has in the institution.

WB observed that PPAF's investment in civil society (it has 70 civil society partners across the country) has resulted in a new found confidence and greatly enhanced capacities and capabilities of the sector to do much more for the poor. It has also enabled them to leverage support from provincial and local governments; commercial banks and other donor.

Investing in building institutions of the poor that are inclusiveness; participatory; and well governed has high pay-off; for it builds their confidence and social capital, gives them voice and empowers them to participate as active and informed citizens in the development and political process. It ensures better provision of services and delivers far more profound and sustainable development outcomes.

PPAF's long term strategy is to cover all the villages and hamlets in the poorest districts of Pakistan through a comprehensive range of activities. There will be a major effort to build institutions of the poor in these districts, build their capacity and provide occupational skills training leading to exponential growth of micro-enterprises and meeting the key infrastructure needs of these villages, said WB report.

WB report stated that the key challenges ahead include: ensuring that the institutions of the poor continue to be underpinned by the core values of inclusiveness, participation and good governance; the outreach of micro-credit in a potentially huge market; continuing support of the government and donors to this pro-poor agenda and meeting the expectations and galloping demands of the poor; and linking in a more meaningful and productive manner to the local, provincial and federal government structures and programmes.

According to WB report, poverty remains a serious concern in Pakistan, particularly in its rural areas. Inadequate access to basic services and financial and other resources; weaker communities, particularly the exclusion of women from the public sphere and the development process; low social capital; ethnic and religious strife; a spate of natural calamities in recent years; have all contributed towards the persistence of poverty in the country.

The World Bank funded Pakistan Poverty Alleviation Fund Project (PPAF) is designed to reduce poverty and empower the rural and urban poor in Pakistan through the provision of resources and services to the poor, especially women. This is being achieved through an integrated approach that includes building institutions of the poor and then providing them with micro-credit loans; grants for small scale infrastructure projects; training and skill development and social sector interventions. PPAF has also contributed significantly in rebuilding lives, fostering resilience and restoring assets of the poor who have suffered from the earthquake and drought.

The PPAF programme is impacting over 10 million people. PPAF has mobilised over 66,000 community organisations (COs) in 27,000 localities across 111 districts in the country. Mobilised communities are helping themselves and accessing services from civil society, government and markets. PPAF's investment in building institutions of the poor, that gives voice, empowerment and nurtures social capital and trust amongst communities is resulting in; increased collective and self-help initiatives; increased incomes; increased food consumption; increased expenditure on utilities; increased assets acquisition including household repair; and increased social outcomes including improved female mobility and their enhanced social status. (All verified through third party evaluations).

PPAF mobilised communities is also leading to their political empowerment. Community members have contested local government elections and more than 500 members have been elected.

Business Recorder [Pakistan's First Financial Daily]

 

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Thai Airways cuts flights to Pakistan ​

Saturday, January 12, 2008

This has happened when several foreign airlines increased their number of flights, and three airlines, Lufthansa Oman Air, and Singapore Airlines, have resumed flights to Pakistan

KARACHI: Thai Airways has reduced flights to Pakistan because of the deteriorating law and order situation created in wake of the assassination of former Prime Minister Benazir Bhutto, The News learnt on Friday.

The Thai flag carrier had recently launched simultaneous flights from Karachi and Lahore to Tokyo via Bangkok. “Yes, they have communicated to us their decision to reduce daily flights to five from seven per week between Lahore and Bangkok,” confirmed Director General Civil Aviation Authority (CAA) Farooq Rehmatullah.

Asked if this was going to hurt CAA efforts to attract maximum number of foreign carriers to the country, he said organizations take into consideration the effects of such political turmoil on their business and hoped situation will improve in coming days. No other airline has shown any indications of rolling back their operations, he added.

The aviation industry has had a booming past year as continuous growth in number of passengers attracted record number of airlines. Passenger traffic in Pakistan jumped to 14.6 million in 2005-06 from 13.5 million in 2004-05 and 11.8 million recorded in 2003-04.

During 2007, Air Arabia of United Arab Emirates (UAE) commenced operations to Karachi and Peshawar from Sharjah while Etihad airways increased its Karachi and Peshawar operations from 3 to 4 weekly services. Another UAE carrier Ras-al-Khaima (RAK) has requested for designations in Pakistan.

After a gap of nine years, German carrier Lufthansa recommenced its operations with three weekly flights in winter schedule 2007. Oman air also recommenced its operations while Malaysian Airline launched its fourth flight to Karachi.

Airblue marked a watershed in aviation history of the country by becoming the first private Pakistani airline to start flights to Manchester last June. Its request for designation to Turkey and Jordan has already been approved.

Pakistan has remained in the spotlight of airlines based in England, where a sizable population of Pakistani origin lives. British Airways increased its operations from three weekly flights to six between Islamabad and London Heathrow. Astreaus and European Air charter, the two low cost carriers of UK, were designated to operate services between the two countries.

Another English carrier UK International Airline started flights from Nottingham to Islamabad via Sharjah with twice weekly frequencies effective current winter schedule. It is expected to increase the weekly frequencies to six in ongoing month.

Virgin Atlantic, also of UK, has shown its intent to commence operations in Pakistan from summer. British Midland of UK has also been designated to operate to Pakistan. However, the airline has yet to submit its schedule.

Shaheen Air International (SAI) is likely to commence operations to UK shortly. They have also requested for the operations to Bangladesh and Sri Lanka. Singapore Airline recommenced its operations with three weekly frequencies between Singapore and Pakistan.

Air Italy the second carrier of Italy has been designated to operate to Pakistan. Al-Jazeera the second carrier of Kuwait has been designated to operate between Kuwait and Pakistan. GMG the second airline of Bangladesh earned rights to operate to Pakistan and is likely to commence operations soon.

Thai Airways cuts flights to Pakistan

 

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S Asia to maintain strong growth in ’08: report ​

Saturday, January 12, 2008

ISLAMABAD: South Asia looks to maintain its strong growth in 2008 with an expected GDP growth of 6.7 per cent, a slight deceleration from 6.9 per cent in 2007, says the World economic Situation and Prospects 2008.

India’s economy will continue to grow with an anticipated rate of 8.2 per cent in 2008. The economies of Bangladesh, Pakistan and Sri Lanka also witnessed good performance and are expected to reach GDP growth of 6.2 per cent or more.

Strong performances in industry and services, increased domestic investments, which grew by more than 20 per cent in 2007 in Pakistan, and recovery in agriculture greatly contributed to growth in these economies. Pakistan’s growth performance in 2008 is surrounded by uncertainty, however, in the light of the recent political turmoil following the Benazir’s assassination.

The Nepalese economy is expected to recover in the wake of cessation of hostilities among rival political groups. However, growth remained low at 2.6 per cent in 2007, in part because of residual unrest in some parts of the country but also because of low investment and poor agricultural performance. However, the current peace process in the country has improved the economic prospects.

Nepal is expected to have a GDP growth of 3.3 per cent in 2008. The report acknowledges that unemployment estimates are not always reliable in the region; nevertheless current data suggest that economic growth is having a positive impact on unemployment. Both Sri Lanka and Pakistan have reduced their unemployment rates to 6.2 per cent.

In spite of these performances, inflation remains a major concern in most economies because of high prices of food, oil and imported commodities. In Sri Lanka, inflation was expected to reach 15.5 per cent in 2007.

Although inflation remains stable in Pakistan, it is nonetheless close to 7 per cent. All the countries are implementing strict monetary measures to contain inflation; they are also trying to better control import of essential commodities.

Nevertheless, the World Economic Situation 2008 warns them to remain vigilant. Budget deficits remain high in most countries, the report argues. This is a serious problem as the public debt is putting interest rates under pressure, and inflation is crowding out financial resources for investments.

India and Bangladesh run a budget deficit of about 3.7 per cent of GDP, Pakistan has 4.2 per cent and Sri Lanka 7.6 per cent. In most countries, trade deficits are also widening because import is growing faster than export.

Political tensions, uncertain weather and volatility of oil prices are major sources of uncertainty for the region. Further increase in oil prices could slow down economic growth, raise inflation and cause problem for macroeconomic balances.

The World Economic Situation and Prospects is produced at the beginning of each year jointly by the UN Department of Economic and Social Affairs and the United Nations Conference for Trade and Development and the five United Nations regional commissions.

S Asia to maintain strong growth in ’08: report

 

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Car sales fall 7.7% in 1st half of ’07-08​

* Analysts attribute the dent in sales to tightened financing by banks and increased prices

KARACHI: Car sales for first half (July-December) of 2007-08 stood at 69,958 units, showing a decline of 7.7 percent when compared to 75,769 units sold in same period of 2006-07.

Moreover, on monthly basis, sales have declined by a massive 37 percent. Only 7,143 units were sold in December 2007 versus 11,361 units in November 2007.

Pakistan Automotive Manufacturing Association (PAMA) released figures for the local car sales in December 2007.

The main reason behind this decline in sales can be attributed to fewer working days during the month of December 2007 on account of Eid holidays and political turmoil after Ms Bhutto’s assassination, said Bilal Hameed, an Analyst at JS Research.

Moreover, price hike following new tax levy and curtailment of auto financing by some banks can also be another contributing factor, he added.

Combined sales of LCVs (Light Commercial Vehicles) and cars in 1HFY08 declined by 3.7 percent to 88,902 units versus 92,332 units in corresponding period of last year.

Meanwhile, a research report written by Analysts at Arif Habib Securities stated that automobile production by the four major industry players declined by 3.4 percent during the first half of the current fiscal year.

The sales of Pak Suzuki, Indus Motors, Honda Cars, and Dewan Motors combined fell to 88,087 units from 91,175 units in the same period of last financial year, the report said. However, production rose by 0.4 percent from 93,483 units to 93,880 units.

The Arif Habib Analysts said the sales fell in December due to fewer working days on account of days off due to Eid-ul-Azha and closure of businesses following the assassination of Benazir Bhutto.

They said that higher interest rates and unit prices for this period as compared to last year had also been responsible for dent in sales.

Besides, stringent checks by major banks due to credit default has also affected car financing negatively, they added. Moreover, the production was also low in December due to maintenance work (an annual or bi-annual procedure of auto assemblers).

Maintenance work hampered production activities for assemblers in December. Production shall be back in full swing by the end of January. “We expect the sales to remain low till elections are held and political stability is established in the country,” said the Arif Habib Analysts.

Yawar Mustafa, an Analyst at Capital One Equities, said, “We believe the reason for the decline in sales is tightened car financing by banks in large, coupled with political uncertainty and business shutdown in the country.”

Daily Times - Leading News Resource of Pakistan

 

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Exporters to explore European markets​

* An exporters’ delegation will visit Poland and Germany by the end of next month

KARACHI: At least five Pakistani companies have shown interest in visiting Poland, Germany and other European countries with Pakistan Horticulture Development and Export Board (PHDEB) team to explore potential of Pakistani fruits especially Kinnow there.

The exporters delegation will visit Poland and Germany by the end of next month in view of poor export volume of Pakistani fruits.

Talking to Daily Times here Friday, Abdul Wahid, Chairman, Pakistan Fruit and Vegetable Exporters Association, said such visits provide exporters an opportunity of interaction with buyers and importers of those countries interested in Pakistani fruits.

The delegation of Kinnow exporters will hold meetings with importers and distributors of the fruits in Poland and participate in a fair in Germany during their weeklong visit.

On first leg of the trip, Pakistani exporters would stay in Poland for two days and visit different super markets and chain stores of that East European country to assess the market. This trip also includes visits to wholesale markets and meetings with big importers and distributors of fruits.

Purpose of the second leg of this trip is participation of the Pakistani companies and PHDEB in a fair in Germany called Food Logitica. PHDEB has leased a stall in the fair where Kinnow and other fruit products of Pakistan would be exhibited.

Mr. Wahid said participation in this fair would provide an opportunity to Pakistani companies to get familiar with new technologies in this field. Participants in the fair included fresh fruit producers as well as allied industries ranging from packaging, seed, and shelf-life enhancing techniques.

Citing reasons of poor export volume of Pakistani fruits especially to European countries, he said Poland, Germany and majority of Eastern European countries do not import Pakistani fruits directly but through Holland, which is regarded as hub of exported Pakistani fruits, where annually 200 to 250 fruit containers are shipped from Pakistan.

He said export of Kinnow to European countries could be enhanced manifold, but owing to its poor appearance and presence of seed, it has failed to draw attention of European importers.

“Unless Pakistani farmers do not upgrade standard of Kinnow produced in the country, exports to European countries would remain dismal,” he added.

Daily Times - Leading News Resource of Pakistan

 

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‘Economic policies to continue uninterrupted’​

ISLAMABAD: Caretaker Prime Minister Mohammedmian Soomro Friday said the economic policies of the government would continue uninterrupted since it is in the national interest to ensure a positive change in the life of the people.

He was talking to Admiral (r) Abdul Aziz Mirza, Advisor, Pak Gulf Construction Company here at the Prime Minister Secretariat.

The company is investing Rs 6 billion on the construction of multi-storey Centaurus project in Islamabad. The PM said that Islamabad is a growing city with ever-increasing demand for official and residential accommodation as well as hotels and shopping malls.

He said the Centaurus project would provide much-needed relief to the city. The PM said the government of Pakistan provides a level playing field to both local and foreign investors. Pakistan, he said is the future hub of the economic activities of the region and the investors who join this endeavour are bound to bear the fruits and make profits in the times to come. He said it would be incumbent upon the government to ensure that all the basic facilities are available to the investors and they get all possible assistance through one window facility.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan’s GDP growth likely to be lower in 2008: IMF​

ISLAMABAD: The International Monetary Fund (IMF) has projected that the real Gross Domestic Product (GDP) growth is likely to be lower than the originally projected. The original projection for 2008 was around 7 percent and the external current account deficit will be higher.

The IMF has said that it is closely monitoring the economic impact of the instability and political difficulty in Pakistan.

According to a transcript of a press briefing by Masood Ahmed, Director, External Relations Department, International Monetary Fund (IMF) at Washington on Friday, the IMF said that the Fund does not have a financial programme in Pakistan, but it is engaged in Pakistan through its work on surveillance, through the work it does on technical assistance. And obviously, the Fund is monitoring the any economy such as Pakistan that goes through a period of difficulty or instability, or a political difficulty, he added.

The spokesman further said, “if you step back a bit and look at Pakistan’s economic performance over the past few years and just look at the last fiscal year (2006-2007), the economy did perform well and had a GDP growth rate of over 7 percent, and reserves have been strong and strengthening. So that’s sort of where we’re coming from. Also, the economy has shown considerable resilience.”

Now, immediately following the assassination of former Prime Minister Bhutto, the local stock market has experienced significant losses after reopening on December 3, 2007 but has recovered, in part, subsequently. There have also been some reserve losses following the attack, but the reserve position remains strong. In terms of currency markets, the Pakistani rupee has depreciated moderately since December 27. And as far as spreads are concerned, the EMBI global sovereign spread for Pakistan has widened by 170 basis points as of January 3, 2008 relative to its level before the attack. So clearly, there was a sort of initial effect.

“Our assessment now is that the real GDP growth is likely to be lower than originally projected. The original projection for 2008 was around seven percent. And the external current account deficit will be higher, but in that we should note that this will be as much due to the recent increase in oil prices which is affecting current account deficits in a number of countries and—but also some reduction in capital inflows, in particular portfolio investment flows.

But, having said that, I should say that we still want to stress that the country has a very solid reserve position and also want to stress that it has a strong track record now of macroeconomic performance and growth on which to build.”

Daily Times - Leading News Resource of Pakistan

 

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Govt assures increased rice production​

KARACHI: Caretaker Prime Minister, Mohammadmian Soomro assured rice exporters that this government will take strong measure to increase rice production by extensive research and development in new rice seeds with better yield to increase production, exports and to bring domestic prices down to benefit common people.

He was talking to a delegation of Rice Exporters Association of Pakistan (REAP) at the residence of Ex-Chairman REAP and Chairman of Ruling group Mr Abdul Rahim Janoo.

Soomoro said, he will immediately call REAPs delegation in Islamabad for a presentation on problems faced by the rice exporters and its proposals. Rice research institutes at Dhorki and Kala Shah Kaku will be asked to give desired results and REAP’s representation will be put on management.

Replying to a suggestion of chairman REAP, Soomro assured to take immediate action on utilisation of RECP godowns at Pipri. Prime Minister urged rice traders to strengthen hands of government by bringing the price down, about law and order situation he assured to take immediate action on the spot and arranged meeting of REAP’s delegation with I.G. Sindh police.

Daily Times - Leading News Resource of Pakistan

 

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Violence losses amount to 8% of GDP: FPCCI ​

KARACHI: The losses to national exchequer as well as to the public and private properties due to violence during five days after the assassination of Benazir Bhutto amounted to 8 percent of the Gross Domestic Product (GDP). This was disclosed at a meeting between Caretaker Prime Minister Mohammadmian Soomro and a delegation of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), led by its President Tanveer Ahmed Sheikh and others few days back. Ministers for Finance, Commerce, Food & Agriculture, Water & Power, Petroleum, Interior and Governor State Bank of Pakistan (SBP) were also present. FPCCI president explained in details the after effects of the riots, arson and looting as a result of the tragic death of Motherma Benezir Bhutto on December 27, 2007.

The delegation also raised the issue of inactivity on the part of the law enforcement agencies, which completely failed to protect the lives and the property of the citizens of Pakistan that was at the complete mercy of the miscreants. PM expressed grief and sorrow on the loss of precious lives as well as damage to public utilities and private properties and assured that strict action will be taken against the miscreants and the indolent officers howsoever senior they may be. The delegation also raised the issue of ever growing menace of load shedding and non-availability of gas for industries. The minister of water and power informed the meeting that due to cleaning of canals reduced water supply was being released from dams. He also informed that a high-powered electricity transmission tower of Hubco was blasted on 30th December, 2007 which disrupted electric supply to Karachi. The minister said that due to severe weather conditions there is abnormal increase in the demand for gas from domestic sector of Punjab and NWFP.

Daily Times - Leading News Resource of Pakistan

 

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12 thermal power projects to produce 2,346MWs of electricity ​

* Thar deposits hold 175bn tonnes of coal, but are un-exploitable

ISLAMABAD: Twelve thermal power projects are being finalised to add 2,346 Megawatt (MW) of electricity to the national grid in the next three years.

According to spokesmen of the Ministry of Water and Power and WAPDA, a meeting is planned for tomorrow to resolve issues regarding Thar coal utilisation for power generation. The spokesmen said deposits in Thar hold 175 billion tonnes of coal but require special technology for exploitation because of high contents of sulphur, and the provision of necessary infrastructure for the purpose.

On hydroelectric power, they said that apart from work on the Bhasha dam feasibility, a contract had also been awarded for a 1,000 MW Neelum-Jhelum project, which would be completed in the next five years. Work is also in progress on the 2,200 MW Munda dam feasibility, they added.

The spokesmen said a comprehensive five-year programme for the improvement of the distribution system had been launched to reduce line losses. The Asian Development Bank is providing $600 million and the World Bank $300 million to upgrade grid stations, distribution transformers and improve distribution lines, they added.

They said the power shortage had been caused by a rapid increase in demand, issues of fuel supply and the prevailing law and order situation. Consumers bought about 10 million pieces of electrical appliances such as ACs, refrigerators, freezers, micro-wave ovens, washing machines, TVs and fans in just one year, they said. Moreover, 25,000 villages have been electrified putting further pressure on the supply.

The spokesmen said independent power producers were required to keep fuel for 21 days to meet any emergency, but fuel was kept for only two to three days. Notices have been issued to them in terms of power purchase agreements, they added. nni

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