Pakistan Economy - News & Updates - Archive

[Neo]

Musharraf to lead team at Davos economic forum​

RAWALPINDI, Jan 19: A variety of trends and assumptions will drive the development of this year’s World Economic Forum (WEF) opening at Davos (Switzerland) next week, official sources said on Saturday.

Opening on January 23, the five-day annual meeting of World Economic Forum under the principal theme of ‘The Power of Collaborative Innovation,” an interdisciplinary and systematic view of the major economic, political, societal and technological forces currently at work in the world, would form the conceptual pillars of the of the 2008 programme and the framework for the global agenda in Davos. Pakistan has been actively participating in the ‘World Economic Forum’ for the past several years, and this year, President Pervez Musharraf will lead the Pakistan delegation comprising high profile economic managers and private sector representatives.

A summary of report prepared for the 2008 Annual Meeting says the Forum’s programme will be based on five conceptual pillars, which are: Business (competing while collaborating); economics and finance (addressing economic insecurity); geopolitics (aligning interests across divides); science and technology (exploring nature’s new frontiers); and values and society (understanding future shifts).

In the area of competing while collaborating, the report says globalisation will continue to reward those companies that excel at collaborating internally and externally. Innovative products and services, and their speed to market, are increasing dependent on a firm’s ability to work in an interactive and integrated fashion, linking all its centres of excellence for a common purpose.

Industries are also discovering that much of their future growth depends on the ability to collaborate with different actors to build public-private partnerships, galvanise multiple stakeholders and work with fast-growing competitors. This collaboration requires trust and transparency and zero tolerance for corrupt practices.

While addressing economic insecurity, the report says the meltdown in the US subprime market, and the ensuing international credit drought, laid bare the reality that global financial markets are still navigating uncharted waters despite the proliferation of sophisticated algorithms and the securitisation of credit risks.

Lingering uncertainty in various markets reflects the need to rethink underlying risk management models.

Concern also remains over the growing global influence of private equity firms, hedge funds and sovereign wealth funds with respect to the governance of some of the world’s largest corporations, it says.

The report says shareholder activism is also much more pervasive; minority shareholders are increasingly driving key strategic and operational decisions typically made by a company’s management team. As uncertainty looms over the US economy, there is more confidence in China and India and other emerging markets assuming the driver’s seat for global growth — despite the fact that over 50 per cent of the global economy still rests in the hands of G-7 countries, the report states.

Discussing the concept of aligning interests across divides, the report says future generations are set to inherit a world replete with such global challenges as climate change, non-proliferation, terrorism, income inequality, natural resource scarcity, and spiralling healthcare and retirement costs.

Countries endowed with energy and natural resources — such as the Arab Gulf States, Iran, Nigeria, Mexico, Brazil, Russia and South Africa — are demanding a greater voice in global governance and international business.

Rebuilding efforts in Iraq and Afghanistan are facing growing uncertainty in terms of future international support, according to the report.

Exploring nature’s new frontiers, the report says science and technology are an inescapable presence in every facet of life. Almost every major policy issue on the global agenda has a scientific dimension; ageing societies, climate change, disease eradication and natural resource management are but a few of the most pressing examples.

The report says with advances in nanotechnologies, genetics and computer science in combination with other disciplines, the extent to which mankind can control and manipulate the natural world is reaching beyond the comprehension of the general public. At the same time, the mysteries of knowledge, memory, learning and emotion are unravelling with advances in brain and cognitive research.

For over three decades, the World Economic Forum Annual Meeting has provided an unrivalled platform for leaders from all walks of life to shape the global agenda at the start of each year. At the core is its multi-stakeholder model that leverages the collective wisdom of leaders from business, government, the media, academia, the arts and civil society by building a global platform for collaboration and action to address priorities on the global agenda.

Looking to the future, it becomes readily apparent that complexity, competing interests and scarce resources remain the greatest obstacles to progress on the global agenda in the absence of greater leadership and global stewardship.

The forum will also harness the wisdom and experience of diverse and international Co-Chairs: Tony Blair, former Prime Minister of the United Kingdom and Member of the Foundation Board of the World Economic Forum; James Dimon, Chairman and Chief Executive Officer, JPMorgan Chase and Co.; Henry A. Kissinger, Chairman, Kissinger Associates; Indra K. Nooyi, President and Chief Executive Officer, PepsiCo; and Wang Jianzhou, Chairman and Chief Executive, China Mobile Communications Corporation.

Musharraf to lead team at Davos economic forum -DAWN - Business; January 20, 2008

 

[Neo]

Six-month oil import bill up by 13pc to $4.238bn​

ISLAMABAD, Jan 19: The country’s oil import bill soared to $4.238 billion during the first half (July-December) of the current fiscal year, up by 13.13 per cent from $3.746 billion the same period last year.

Official figures, compiled by the Federal Bureau of Statistics (FBS), showed that even the quantity of oil recorded a double digit growth during the period under review on the back of greater local demand.

This growth in oil import is expected to escalate further in the second half of the current fiscal in the wake of highest ever increases in oil prices in the international market which crossed $100 per barrel mark.

Last year, oil import bill had crossed $7 billion and this year the finance ministry anticipates that the oil bill would easily reach $11bn by the end of June 2008, which would further deteriorate balance of payments account.

An increase of 22.18 per cent was recorded in the import bill of products manufactured from petroleum as it stood at $2.343 billion during the half of the current fiscal against $1.917 billion over the same period last year.

However, crude petroleum oil import was up by 3.64 per cent to $1.895 billion during July-December period of the current fiscal against $1.828 billion over the same period last year.

The statistics showed that machinery is the second group after petroleum, whose import stood at $3.249 billion in July-December this year, up by 1.54 per cent from $3.200 billion last year.

This growth in the import bill of machinery group was the outcome of marginal increase in import of agriculture machinery which increased by 13.73pc, construction machinery 11.37pc, electrical machinery 9.45pc and telecom sector 6.76 per cent during the first half of the current fiscal year over last year.

However, textile machinery import declined by 24.65 per cent, power generating machinery 0.55 per cent, office machinery 13.50 per cent during the period under review over last year.

The steady decline in import of textile machinery showed that textile manufacturers have stopped replacement of old machineries to improve the quality of products to make them competitive with those manufactured in other countries.

The import bill of agriculture and other chemicals up by 30.54 per cent to $2.725 billion during the first half year of the current fiscal year against $2.087 billion over the same period last year.

This growth in the import bill is owing to 127.47 per cent increase in the import bill of fertilizer, followed by 34.80 per cent in medicinal products and plastic material 8.77 per cent during the period under review.

The import of food products reached $1.594 billion in the first half of the year as against $1.534 billion over the same period last year, indicating a growth of 3.92 per cent. This growth was mainly due to import of wheat and flour during the period under review to meet the local shortage.

The import bill of both CKD/SKD and CBU vehicles reached $1.285 billion during the period under review as against $1.015 billion over last year, an increase of 26.56 per cent.

The total import bill reached $16.953 billion during the first half of the current fiscal year as against $14.894 billion last year, showing an increase of 13.82 per cent.

Six-month oil import bill up by 13pc to $4.238bn -DAWN - Business; January 20, 2008

 

[Neo]

FDP handling over Rs 80 billion trade annually ​

FAISALABAD (January 20 2008): The Faisalabad Dry Port (FDP) has been established in line with the spirit of Rotary Club and it was not only extending export and import related facilities to the traders but was also serving the local community, said Faisalabad Dry Port Trust (FDPT) Chairman Sheikh Muhammad Ashfaq.

He was addressing a reception dinner hosted in his honour by Rotary Club of Faisalabad here last night. He said that FDP was established in 1990 under the vision of Syed Nazar Hussain Shah founding president of Faisalabad Chamber of Commerce and Industry (FCCI).

He also mentioned the dynamic leadership of Faisalabad Industrial Estate Management and Development Company (FIEDMC) Chairman Mian Muhammad Latif who removed the bottlenecks by taking bold decision to increase number of its trustees from 11 to 30.

He said that FDP had now become one of the leading up country dry port facility which was handling Rs 80 billion export (approximately 33,000) and import (approximately 7,000) containers annually.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Telecom sector receives $363.9 million FDI in first quarter ​

ISLAMABAD (January 20 2008): The telecom sector has received $363.9 million foreign direct investment in the first quarter of current fiscal year, which is 37.71 percent of the total foreign resources pumped into Pakistan's economy, revealed telecom economic indicators released by Pakistan Telecommunication Authority.

The indicators updated by PTA on January 17 showed that Pakistan received a total FDI of $962.5 million during July-September 2007 including $363.9 million solely for telecom sector. It said that during 2005-06, telecom sector received over $1.824 billion FDI and emerged as main sector of the economy with 35.60 percent share in the total FDI.

Telecom sector is keeping up the trend of largest FDI recipient in Pakistan during the last few years following its liberalisation of the sector, which made it attractive for many global telecom giants to invest in Pakistan.

The data showed that both the cellular and WLL operators have been investing to expand their networks visualising the market potential. According to PTA, total numbers of cellular users have crossed 76 million in December 2007, from half a million in 2004, which is 48 per cent of the total population.

The wireless phones have also shown a phenomenal growth in recent years with all the telecom companies investing to expand their networks and attracting more and more subscribers. The total users of wireless phones have increased to 2,123,179 in December 2007 from 265,028 in 2005.

Analysts say it is expected that this upward trend of investment may continue in the next five years because of large market potential, particularly the rural areas where operators have to roll out their network.

Telecom indicators released by the PTA in December 2007 showed over 76,604,582 mobile users are receiving services from five operators, Mobilink, Ufone, Paktel, Telenor and Warid while the license of sixth operator, Instaphone, was cancelled due to non payment of fee.

Mobile companies have been registering phenomenal growth with more and more people subscribing their services. This is also evident from the data which shows seven per cent growth in teledensity in first half of ongoing fiscal.

The mobile teledensity have increased to 58.42 per cent in December 2007 from 41.51 per cent in July 2007. Statistics showed that Mobilink subscribers have increased to 30,660,000 in December 2007, Ufone 16,161,936, Paktel, 980,587, Telenor's 14,596,382 and Warid with 13,205,677 users.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Cotton export declined by 62 percent during December ​

KARACHI (January 20 2008): Country's raw cotton export has dipped by 62 percent during December 2007 as compared to same period of last fiscal year mainly due to shortfall in the cotton crop and high contamination ratio in the cotton, exporters said.

They said that in year 2007 the country almost has missed the cotton production target by some 2.5 million bales and as per current estimates of crop assessment committee, country' cotton production would not be higher then 11.6 million bales as against the target of 14.1 million bales set by government for the current fiscal year 2008. "Current year cotton crop has been badly affected by mealy bug and cotton leaf curl virus (CLCV) due to the unavailability of pesticides," they added.

They stated that Pakistan is also producing contaminated cotton and contamination ratio in our crop is higher than India, USA and other competing countries. These factors have brought about constant decline in country's raw cotton export during the current fiscal year.

As per official statistics the country's cotton export has declined by some $3.435 million during December 2007 as compared with corresponding period of last fiscal. During December 2007 country's raw cotton export stood at $2.125 million as against the some $5.56 million during December 2006.

Similarly, overall cotton exports has also declined by 15 percent during the first half of FY08,as compared to same period of last fiscal year 2007, they added.

Pakistan has exported some $20.139 million raw cotton during July-December as compared to 23.665 million dollars during the same period of 2006-07, depicting a decrease of 3.526 million dollars during the first half of 2008. "Contamination ratio in the country's raw cotton is around 9.5 percent as against 3.5 percent in Indian raw cotton," said Ghulam Rabbani, a leading raw cotton trader.

He said that local raw cotton exporters are facing challenges of cotton quality in the international market, which benefits India, while shortfall in the crop also has cast negative impact on the export of cotton and presently traders are preferring to sell the cotton to the local textile industry.

"Local textile industry is facing shortage of 5 million bales during the current fiscal year, as currently our local demand stands at around 15-16 million bales, while expected production is 11.6 million bales during fiscal year 2008," he said.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

US attache cuts forecast for Pakistan cotton crop ​

WASHINGTON (January 20 2008): Pakistani cotton production, hit hard by pests and poor weather, will come in lower than previously expected at 8.75 million bales in 2007/08, a US Agriculture Department attache in Islamabad said on Friday.

"Area planted to cotton was lower than targeted, the crop was severely damaged by the cotton leaf curl virus (CLCV) and pesticide-resistant mealy bugs, and harsh weather conditions adversely affected boll size and weight," the attache report said.

The attache previous estimate was 10.4 million bales. Pakistan is a top importer of US Pima cotton. Below are additional excerpts from the report. Attache reports are not official USDA data. To read the full document, please go to: USDA Foreign Agricultural Service (FAS) — Attache Reports.

"The sowing of illegal Bt cotton varieties, which were not designed for Pakistan's climatic, crop disease and market conditions, also affected the production and quality of this year's crop. The import forecast has been increased based on the latest arrivals registered in country. Demand for US extra long staple and upland cotton is strong as Pakistan's textile industry struggles to remain competitive in world markets.

The size of the MY 2007/08 cotton crop has been scaled back from 2.265 MMT to 1.904 MMT. This is a result of unfavourable weather and severe crop damage in the main cotton belts of Punjab and Sindh, mainly due to cotton leaf curl virus (CLCV) and mealy bugs.

Cotton leaf curl virus (CLCV) has become endemic in Pakistan, affecting over 70 percent of this MY's cotton crop. The virus, which causes stunted growth and poor fiber yield, was first reported in 1985. While scientists focus on developing an effective and durable virus resistant variety, the best control at present is application of pesticides against the insect vector.

Over the past two years, Pakistan has seen a growing invasion of mealy bugs. The insect attacked 12 percent of last year's crop and an alarming 30-35 percent of the 2007 crop.

The illegal Bt cotton varieties planted in about 40 percent of Pakistan's cotton region is not the magic bullet many farmers imagined. It was developed to resist chewing insects, mainly the cotton bollworm. The mealy bug is a sucking insect, unaffected by the Bt toxin, which is best controlled through pesticides.

Business Recorder [Pakistan's First Financial Daily]

 

[ejaz007]

Pakistan may export cement to Russia
Tuesday, January 22, 2008
By M Farhan Zaheer

KARACHI: Cement export to Russia is expected to resume, provided some hurdles are cleared. Cement companies would focus on export as local consumption would decrease in the aftermath of a proposed 15 per cent cut in the Public Sector Development Programme (PSDP).
Local cement demand and exports of the country have been continuously rising, while cement exports to Russia may also resume due to surplus production and high profits in exports, experts said.
“So far so good, we are satisfied with the current cement exports of the country,” said M Ali Taba, Chief Executive Officer of Lucky Cement. “As far as the PSDP proposal is concerned, we cannot comment until it is finalised. Obviously, the government will take action considering the country’s economy and not alone in favour of only the cement industry. So, if the government takes any step to slash PSDP, then we would be concentrating on cement exports. Chances of resumption of exports to Russia are only 30 per cent,” Taba added.
Local demand of cement has been rising because of continuously increasing construction activity in the private sector and government expenditure in sectors like power, said Atif Malik, a senior analyst at JS Research.
Regional cement demand has also been mounting as India and Iran previously exported cement but now their rising cement consumption at home has made these countries to import cement, however, Pakistan has many emerging venues of exporting surplus cement unlike other countries in the region, he added. During some preceding months many housing projects came in market due to the declining cement prices and rising supplies in the local market, he noticed.

Pakistan may export cement to Russia

 

[ejaz007]

Basmati exports jump 25pc in Dec
By Mubarak Zeb Khan

ISLAMABAD, Jan 21: The export of basmati rice from Pakistan rose by 25 per cent in December 2007 over last year due to fall in supply of the commodity from leading rice producing countries in the international market, officials and analysts told Dawn.
Almost 19 per cent growth in export of basmati rice was witnessed in November 2007 as Pakistan’s main competitor India had raised the minimum export price of its basmati and other rice varieties to discourage their exports.
A senior official in the ministry of food, agriculture and livestock told Dawn that the export of basmati rice would increase further in the months ahead on the back of strong demand for the commodity in the Middle East and some European countries.
The statistics showed that the overall export of all rice varieties rose just marginally by 0.07 per cent during the first half of the current fiscal year over the last year. However, the export of other rice varieties dipped by 23 per cent during the period under review.
A break-up for the others (rice) was not available to calculate the actual decline in the export of various types of non-basmati varieties.
The official said that the new rice crop was expected to arrive in October-November next while the price of the commodity in local market had already witnessed more than 100 per cent increase during the last few months because of the higher than expected growth in export.
Another official in the commerce ministry said that the Pakistani exporters were selling basmati $300 to $400 cheaper than the Indian exporters in international market. As for as for non-basmati rice is concerned, India has a minimum export price of $500 a ton, while Pakistan is exporting the commodity at around $350 a ton, which is a big anomaly and needed immediate ratification.
Analysts said the production did not keep pace with the demand during the last few years, resultantly the surplus production for exports had been reduced. They said like India, Pakistan should also introduce a minimum export price to decelerate the pace of export of rice, particularly the basmati rice.
A leading rice exporter on condition of anonymity told Dawn that the government should allow export of rice in containers as against the current practice of shipload. He said that the decision would regulate the export of rice.
The exporter said the government should do away with the unsecured credit sales based on Documents against Acceptance (D/A), particular on export of basmati rice allowed by the State Bank of Pakistan (SBP).
The SBP requires basmati exporters to export double the value for which export refinance is provided to them. This has forced the exporter to sell at low price with long-term supply contracts to achieve the double export performance demanded by the central bank.
The exporter said the buyers were willing to pay in cash for rice but the SBP has yet to do away with the DA system, which also some time created financial crunch for the small rice exporters.
Some of these hapless exporters are now being threatened by their buyers that they must ship the next order at price much below their cost otherwise they might not get payment for the last shipment. The basmati prices have increased by over 100 per cent in last few months in domestic as well as overseas markets because production has fallen and the overall demand has increased, the exporter added.
The system in place by SBP only benefited the biggest exporters of rice who manage such sales due to their financial muscle with local banks for suitable export document discounting facilities and also have their own offices abroad for obtaining payment.

Basmati exports jump 25pc in Dec -DAWN - Business; January 22, 2008

 

[ejaz007]

Loan accord signed for Karakoram highway project​

BEIJING (January 22 2008): The Export Import Bank of China has signed a loan agreement with Pakistan for the upgradation of Karakoram Highway project (KKH). Under the agreement China will provide a credit of $327 million for the expansion of the KKH project.

The qualitative upgradation of Pakistan-China road linkage will further facilitate and enhance tourism and trade between the two friendly neighbouring countries. The expansion project is being executed jointly by the China Road and Bridge Corporation (CRBC) and Pakistan's National Highway Authority (NHA). The agreement was signed by the Ambassador of Pakistan to China, Salman Bashir and Deputy General Manager Commercial of Loan Project, Xin Bin.
Business Recorder [Pakistan's First Financial Daily]

 

[Contrarian]

Dear ....

Please know that i didnot mean to portray that Pakistan is better in telecom then India,

I did not want a comparison of India's and Pakistan's telecom network. All i wanted to know was whether 3G networks have been established in Pakistan or not.

i said i know 3G because i have it in U.A.E and when i went to Pakistan it was not working but i know that WIMAX service is available in Pakistan and it is by far a better system then 3G tech. Kindly check the WIMAX tech and 3G tech comparison or i can post for mutual information.

I know about Wimax, as well as HSDPA

True that it seems to be wrong but i mentioned that Edge is available and i asked also if Video Calling is available and posted link from mobilink to authenticate by view for mobile TV in pakistan.

Fine, just next time, do more research...

 

[Proud to be Pakistani]

I did not want a comparison of India's and Pakistan's telecom network. All i wanted to know was whether 3G networks have been established in Pakistan or not.


I know about Wimax, as well as HSDPA

Fine, just next time, do more research...

.....

 

[Neo]

Oil consumption goes up by 9pc ​

Tuesday, January 22, 2008

KARACHI: Oil sales in the country jumped nine per cent in the first six months of fiscal 2007-08 on the back of higher uptake of diesel and furnace oil and an unexpected recovery in petrol sales.

Sales of petroleum products were 9.1 million tonnes during July to December compared to 8.3 million tonnes recorded in the same period of 2006, said a report issued by a brokerage house on Monday.

“Diesel (HSD) and furnace oil, which constitute more than 83 per cent of total oil sales, were up by 10 per cent and 5 per cent respectively,” Analyst for JS Global Capital Ltd Faran Mahmood said in his report.

Petrol sales grew by 29 per cent. Increase in diesel sales by local oil marketing companies (OMCs) was due to reduction in smuggling from Iran and increase in its use by power generators.

Oil smuggling from Iran, which had swamped the local market with cheaper but low quality products in recent years, has declined since the start of a fuel rationing programme there. This had in part also supported petrol sales, the report adds. Gas shortages in the country and stagnant hydro-power generation led to higher usage of furnace oil for thermal power generation.

The report expects to see even better sales in the second half as the fuel thirst for power generation rises in coming months. “We expect overall volume sales in FY08 to reach 20 million tonnes, an increase of 16 per cent year-on-year.” Mahmood also expects to see OMCs posting better profits on back of higher sales despite the cash shortfalls the companies face due to non-payment of dues the government owes to them for not passing on the fuel price hike to consumers.

Oil consumption goes up by 9pc

 

[Neo]

UAE invested $242m in five months ​

Tuesday, January 22, 2008

LAHORE: Punjab Governor Lt Gen (R) Khalid Maqbool has said that United Arab Emirates (UAE) investors made investments totalling $242 million in the province during the last five months.

He stated this while talking to Galadari Group of Industries’ chairperson Ms Abdul Latif Galadari, who called on him at the Governor House on Monday. Galadari is visiting Pakistan to review investment opportunities in the cement, automobile, power, hotel, real estate management and financial services sectors.

Welcoming investments by the Galadari Group, the Governor said “the UAE is a brother Islamic country, having similar customs and fraternity is the basis of our friendship.” He termed it a good omen that UAE’s Dhabi Group made $800m investment in Lahore, Sharjah’s Abdur Rehman Bukhater was investing in Lahore Sports City which spans over 3,000 acres of land, opening of the Damas Jewellery outlet and a huge investment by Etisalat in PTCL. Galadari apprised the governor that the group played a vital role in UAE’s economic development, adding that 17 companies of the Group are working in different sectors on an international level.

UAE invested $242m in five months

 

[Neo]

UAE keen to increase investment in Pakistan ​

Tuesday, January 22, 2008

KARACHI: The United Arab Emirates (UAE) has set Pakistan well amongst its potential list of investment opportunities when it announced last year to double its endeavours to a staggering US$26 billion as trade between the two countries reaches the $5 billion mark.

Chairman, Pak-UAE Business Council, Mirza Ikhtiar Baig pointed out that the UAE was making heavy investments owing to increase in oil prices which have led to additional $400 billion revenue entering into the Gulf region of which the UAE is an active member. “Last year, the UAE invested $3 billion into our country which when compared to the $400 billion is insignificant and which can triple in figures.” He added that Pakistan was their first choice as the market of the country was not saturated like that of most other countries and it being a third world country offers them better economies of scale than the western countries.

Also since Pakistan is closer to the UAE and is ideally geographically placed, it benefits the Arab country to target it for its investments. He said the council was formed a year back by the foreign ministers of both the countries keeping in view the growing number of investments between the countries. Baig added that though the political instability and the dismal law and order was a major turn off for any foreign investors, the UAE was eager to continue with further investments and is searching to enter unexplored markets.

As major groups continue to participate in Pakistan’s privatisation programme, the UAE already has investments worth billions of dollars in various sectors of Pakistan such as housing and real estate, telecommunication, banking, mineral exploration, oil and gas, information technology and tourism. Other UAE investments in Pakistan are in the fields of airlines, financial business, hotels and tractors.

The UAE is Pakistan’s second largest global trading partner and it is also the second largest source of home remittances from Pakistani expatriates. The most notable investments that the Arab country has made into Pakistan includes two in the telecommunication sector where Etisalat acquired management control of the largest telecom entity - the PTCL while Warid Telecom is the fourth largest mobile service provider in the country. Wateen, a subsidiary of Warid Telecom, has earned a milestone in the telecommunication industry by being the first to introduce Wi-Fi (wireless) internet into Pakistan which is also being well received by the public.

In financial sector, Abu Dhabi Group has bought banks in Pakistan such as AlFalah and United Bank Limited while Dubai investors introduced the Dubai Islamic Bank and Emirates Global Islamic Bank which according to its marketing director, Danish Fazal, is rapidly gaining significant market shares. Fazal further stated that the Emirates Investments Group, which owns Emirates Global Islamic Bank, also have ventures in the insurance sector namely Takaful Pakistan Limited and in the real estate project of Karachi Financial Towers. Al-Ghuran is another UAE based real estate which plans to invest Rs45 billion in construction and real estate business in the near future. Similarly Al-Ghurair Giga announced last year the multi million Goldcrest DHA Islamabad project.

Emaar has also turned its attention towards Pakistan and has multi purpose projects worth $2.4 billion in Islamabad and Karachi which would be completed in the next five years. Emaar and Pakistan’s Port Qasim Authority are also in the process of undertaking a mega joint-venture project to develop an area of 12,000 acres of land into a modern city near Karachi.

Pakistan and the UAE have also entered into a landmark agreement envisaging construction of $5 billion oil refinery at Khalifa Point and renewal of soft loan of $265 million for the construction of dams in Pakistan. According to its website, the project, which would be known as Khalifa Coastal Refinery, would be set up at Khalifa Point in Gwadar and is expected to have a production capacity of 200,000 barrels a week.

Abu Dhabi government-owned International Petroleum Investment Company (IPIC) will hold a 74 per cent stake in the Khalifa Coastal Refinery joint venture, with Pakistan’s Pak-Arab Refinery (PARCO) holding the remainder. The construction work on the project will start in December 2008 with a planned production from 2012. This is the largest single country commitment for investment in different sectors of Pakistan’s economy and has the potential not only to make UAE one of the major economic players but would also open up new vistas of development in Pakistan.

About 400,000 Pakistanis are living and working in the UAE who are a source of strength for the Pakistan-UAE relations. Pakistan attracted world attention during the last five years as it made significant economic progress owing to continuity in policies and a rapidly strengthening GDP. Supported by a growing large scale manufacturing sector and services sector, private sector investments into the country helped it to have a stable growth.

Trade statistics of last five years revealed an encouraging trend in bilateral trade between Pakistan and UAE. The trade volume which was $1.4 billion in 1999-2000 increased to $2.8 billion in 2004-2005, depicting 20 per cent growth per year. Trade between the UAE and Pakistan reached new heights as it posted significant growth to cross $5 billion mark following a surge in exports across the sea in 2007. The increase in overall exports has come primarily from non-traditional exports items accounting for 67 per cent of the increase followed by 35 per cent from textile manufacturers and four per cent from other manufacturers.

Baig was of the view that while exports were increasing, the Balance of Payments (BoP) yet remained in favour of the Arab country. “The BoP does not present the true picture as much of the imports that are brought into the country from the UAE are those which are actually manufactured elsewhere such as India and Bangladesh and is imported via Dubai.” Petroleum imports are another reason for this imbalance, he continued.

Baig said the UAE could play a major role in the primary sector of Pakistan such as livestock which needs to have foreign investments to ensure its uplift. The largest turnover of Pakistan during 2006-07 was with the USA followed by the UAE, China, Saudi Arabia, Germany, Japan, Kuwait, United Kingdom and India. Approximately eight per cent of Pakistan’s exports are to UAE, making it the second-largest destination for Pakistani exports.

UAE keen to increase investment in Pakistan

 

[Neo]

Low cost energy key to industrial survival: LCCI president ​

Tuesday, January 22, 2008

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) President, Mohammad Ali Mian has said survival of the industrial sector depends on the availability of low cost energy that can be produced in Pakistan through available hydel resources.

He was speaking at a workshop on ‘In-house energy cost control methodologies in industries’ organised by the Bureau of Quality Management. He said that the energy crisis is worsening day by day and that the economy is suffering badly with prolonged power interruptions in the steel industry. The shortage of power to the textile industries is also jeopardising textile exports target, he added.

He said curtailment of trading activities through early closures and load shedding is also impacting the services sector. The LCCI chief also referred to line losses, which are over 25 per cent. He said substandard equipment being used in power generation and distribution and non-availability of facts and figures are having a negative impact on the whole industry sector.

He said Pakistan has tremendous potential and can certainly produce cheap electricity but “we are unable to benefit from our natural resources due to regional and political bias.” He appealed to the government to exploit all hydel resources to produce cheap energy, which is much needed for our industrial and commercial growth and for domestic consumption.

In his address, Mian Fazal Ahmad who organised the workshop said, local rise in energy tariff is also a handicap to the industry in maintaining its competitiveness and survival. He said that it is highly imperative for our industry to gear up to new challenges without losing further time so as to gain a more competitive edge by cutting production losses and lowering the energy tariff.

Low cost energy key to industrial survival: LCCI president