Pakistan Economy - News & Updates - Archive

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Investment-friendly atmosphere vital to curb poverty: Soomro ​

RAWALPINDI (February 15 2008): Government has encouraged the investment-friendly atmosphere in the country to help eradicate poverty, unemployment and other social problems, said Muhammadmian Soomro, Caretaker Prime Minister here on Thursday.

"Small and Medium Enterprises Development Authority was created to support the small industrial units which would help create jobs and increase the industrial production", Soomro said while inaugurating the New Academic Block at Peer Mehr Ali Shah Arid Agriculture University Rawalpindi.

The premier also laid the foundation stone of three mega projects of Rs 281.5 million including Institute of Bio-Chemical Science, Faculty of Veterinary Sciences and Gymnasium. He also distributed cheques among deserving people for micro-credit financing scheme started by the Sociology Department of the University. Governor Punjab and Chancellor of the University Khalid Muqbool, Vice Chancellor Dr Khalid Mehmood and Vice Chancellors of other varsities also attended the function.

The caretaker premier said that the State Bank has permitted the banks to provide micro-credit loans to people to expand their businesses and move towards self-reliance. He called upon rich and philanthropists to come forward and provide small loans to people for setting up small industrial and business units.

He said that new inventions and progress in science and technology has created competition in the world and nations who follow this high speed competition would attain development in science and technology. "Quality education would lead the nations towards the new horizons of socio-economic development and progress in science and technology", he added.

He said that government was desirous to change the education system to attain the desired results of development and progress. "It is imperative to change the system on primary level to provide solid basis to our young generations", he said.

He said that government was providing all possible resources to provinces for improving in education system and provision of standard and quality education.

He called upon teachers to use their best efforts for imparting quality education to young generations for producing a lot of educated and knowledgeable youths.

Business Recorder [Pakistan's First Financial Daily]

 

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Gwadar EPZ may get 20-year tax holiday ​

ISLAMABAD (February 15 2008): The Economic Coordination Committee (ECC) of the cabinet, which is scheduled to meet on Friday with caretaker Prime Minister Mohammedmian Soomro in the chair, is likely to approve a package of incentives for Export Processing Zone (EPZ) top of which would be grant of 20 years tax holiday, official sources told Business Recorder.

In September last, the ECC under the chairmanship of former prime minister Shaukat Aziz did not approve a similar proposal rather directed the sponsoring ministry ie Industries Ministry to redraft special incentives for the investors interested in setting up industrial units at EPZ of Gwadar.

The sources said, Industries Ministry has now proposed to the ECC that 20-year income tax exemption may be granted as was given to the Gwadar Port developers despite disagreement by the Federal Board of Revenue (FBR) which supports grant of such incentive for not more than five years.

The sources said 1,000 acres of land has already been leased out free of cost, adding that incentives package had been drafted in consultation with concerned stakeholders and admitted that incentives offered by successful EPZs in India, Bangladesh, China, Malaysia and United Arab Emirates (UAE) were more attractive and result-oriented as compared to the regime of incentives operative in Pakistan EPZs.

It had proposed that 1,000 acres of land provided by the Balochistan government free of cost should be declared as EPZ. Sources said that ECC had observed that the proposal submitted by the Ministry did not contain a comparative study of incentives presently available in the existing EPZs in different parts of the country vis-à-vis those being offered in the Gwadar special economic zone.

The ECC would also discuss prices of essential items and availability of wheat and flour to the people especially at affordable rates. Besides, Pakistan Sugar Mills Association''s (PSMA) demands would also come under discussion as the secretaries committee headed by the Minister for Finance Dr Salman Shah did not discuss the issue due to one or the other reasons. The sources said, Ministry of Food, Agriculture and Livestock (Minfal) would brief the ECC about wheat situation and expected price of new crop.

Business Recorder [Pakistan's First Financial Daily]

 

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Gwadar to serve as trade, energy corridor: Durrani ​

WASHINGTON (February 15 2008): The newly constructed Gwadar deep-sea port and development of extensive infrastructure providing regional linkages would help to transform Pakistan into a trade and energy corridor, Ambassador to the United States, Mahmud Ali Durrani, said.

He told a gathering of students, experts and diplomats at John Hopkins University that Pakistan, through development of the strategically located modern port in the southern Balochistan, was poised to serve as a gateway for commerce and transportation among South Asia, energy-rich but landlocked Central Asia, China and the oil-rich Gulf countries.

Among the major projects being materialised under a master plan, the ambassador listed modernising of highways, shipping, better border terminals, establishment of rail and road network, banking system, insurance, custom clearance, freight management, trucking, increasing efficiency of logistics chain and telecommunication connectivity.

He was confident that with continued economic upsurge and sustained inflow of investment, Pakistan would be able to carry out multi-billion dollars projects in time and utilise Gwadar port's key location to the best economic advantage for its people and the region.

"Any land-based trade between the Gulf region and South Asian states can at best take place through Pakistan. Pakistan's proximity to the Gulf region, Iran, Afghanistan, China and Central Asia makes all of us natural trading partners, on the East, Pakistan is the ideal approach for shipment of Indian goods to Afghanistan and the Central Asian markets," he observed.

In the context of the country's potential to serve as energy corridor, he said, the most economical trans-shipment of fuel from energy-rich Gulf, Iran, and Turkmenistan to energy-deficient India would best transit through Pakistan.

This, he added, was particularly so in respect of natural gas pipelines from Iran and Turkmenistan. He also underlined the importance of security and stability in the region for realisation of ambitious economic development plans.

Ambassador Durrani said the launch of unprecedented development activity in Balochistan had already started accruing benefits to the local people as the pursuance of projects had generated a lot of employment opportunities for them and stepped up overall pace of progress.

To a question, the ambassador stressed that Pakistan had designed the Gwadar for trade and not as some sort of military corridor. "We have designed it purely for trade through road and rail infrastructure," he stated. Pakistan, he said, had signed a quadrilateral agreement with China, Kyrgyzstan and Kazakhstan for transit trade facilitation, which had been operational since 2004.

He informed the gathering that Singapore Port Authority had been awarded a 40-year contract to operate Gwadar port, constructed with the help of China last year. The envoy spoke of plans for future development of the port, which is expected to capture one-third of the national cargo traffic market by 2055, translating into 350 million tones.

Gwadar would also emerge as a major industrial and exports zone following its notification as a tax-free economic zone, he added. Fredrick Star, chairman of the Central Asian Caucuses Institute, moderated the presentation and praised Pakistan's vision for development as inspiring and remarkable.

Business Recorder [Pakistan's First Financial Daily]

 

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ECC to consider purchase of rental power plants today: proposal 'highly manoeuvred' ​

ISLAMABAD (February 15 2008): The Economic Coordination Committee of the Cabinet will consider on Friday a 'highly manoeuvred' proposal regarding purchase of four rental power plants of 200-300 MW each to be installed in the private sector, informed sources told Business Recorder.

The sources said whatever was approved by Water and Power Minister Tariq Hamid at a meeting had been manipulated by some top officials of the Ministry of Water and Power and Pakistan Electrical Power Company. These officials skilfully influenced the outcome of the meeting or the situation in order to get what they wanted in an unfair way prior to placing the proposal before the ECC. The Pepco Managing Director made a presentation at an inter-ministerial meeting on January 29, suggesting different options to deal with power shortage.

According to the presentation, Pepco MD presented two packages for discussion: Package-A suggested that two power plants of 500-600 MW each (combined capacity 1000-1200 MW) preferably at Dadu and Faisalabad/Chichoki Mallian to enhance capacity of Gencos operating in the public sector.

Package-B proposed four power plants each of 200-300 MW (combined capacity 1000-1200 MW) as rental power plants in private sector located from amongst site such as, Sahiwal, Ghakar, Kot Lakhpat, Sialkot, Shikarpur, Jamshoro, Emanabad and Sheikhupura, etc.

THE MINISTRY OF WATER AND POWER GAVE THE FOLLOWING RECOMMENDATIONS:

i) In order to meet power shortage in shortest possible time preference will be accorded to package-A proposed by Pepco which would furnish a formal proposal/PC-1 to the Planning Commission.

ii) Keeping in view the shortage of gas, it was decided that proposals for rental power plants ie package-B will be based on dual fuel (gas and RFO), single fuel RFO and will be implemented in shortest possible time.

iii) Rental power plants will be arranged for a period of 3+1 years.

iv) Efforts be made that the tariff for rental power plants is in line with the tariff allowed to the IPPs based on similar technology for their first 10 years.

v) Mandatory storage of oil for rental plants will be for 10 days.

vi) Pepco would re-evaluate the sites for the rental power plants on the basis of space for oil storage, transportation of oil to the site, environmental aspects, power evacuation, etc.

vii) Pepco to prepare a mid-term revised forecast for demand and supply of power and PPIB to provide necessary input/data to Pepco in respect of prospective IPPs.

The sources said the Water and Power Minister was contemplating establishing thermal power plants in public sector whereas Pepco was making efforts to go for rental power plants.

They said the summary had not been moved to the Finance Ministry, Planning Commission, Board of Investment, Nepra and PPIB for comments and it has been presumed that all the stakeholders would agree to the proposal.

http://www.brecorder.com/index.php?id=694552&currPageNo=1&query=&search=&term=&supDate=

 

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Oil, gas July-December production up by 8.4 percent, 2.9 percent ​

KARACHI (February 15 2008): The oil and gas production for the period July-December 2007 has increased by 8.4 percent and 2.9 percent to 13 million barrels (70.9k bpd) and 713 billion cubic feet (3.8bcfd) respectively.

According to Pakistan Petroleum Information Service, OGDCL and PPL observed a 10.6 percent and 76.3 percent respective increase in oil production to 439000 bpd and 41000 bpd, whereas POL witnessed an 8.8 percent decline to 57000 bpd.

On the gas front, all companies saw an increase in production during the period under review over that in 1H/FY07 with that of OGDCL's registering increase of 7 percent reaching 978mcfd, while PPL and POL registered 2.7 percent and 1.2 percent increase to 991mcfd and 47mcfd respectively.

"With no significant change in numbers over our expectations, we maintain our BUY stance on OGDCL, PPL and POL", Jawad Haleem, senior analyst at Atlas Capital Markets said.

Business Recorder [Pakistan's First Financial Daily]

 

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Telenor secures two million subscriptions in three months ​

ISLAMABAD (February 15 2008): Telenor Pakistan has announced financial results for Q4 of 2007, with two million subscriptions within the 3-month period. The company also grew its revenue by 18 percent from Q3 and improved its EBITDA margin by 17 percent from Q3 2007. The company crossed 15 million subscribers in mid-January 2008 - within less than three years of operation.

CEO Telenor Pakistan attributed the success of the company to Telenor Pakistan's belief in "responsible growth." Commenting on what has propelled Telenor Pakistan to achieve such performance in the face of intense competition, Telenor Pakistan's CEO Tore Johnsen said, "I am happy with the way we are growing. Our customer growth comes hand in hand with solid revenue growth. We believe we must grow but we must grow responsibly - balancing the interests of the shareholders, the employees, and the public at large."

The Telenor Group secured 30 million new subscriptions in 2007. Telenor is now ranked as the world's seventh largest mobile operator with a total of 143 million subscriptions in its mobile operations.

http://www.brecorder.com/index.php?id=694658&currPageNo=1&query=&search=&term=&supDate=

 

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Mobilink unveils in-flight mobile phone service ​

LAHORE (February 13 2008): Mobilink has unveiled yet another landmark achievement by being the only operator in Pakistan to offer in-flight mobile phone service onboard international flights.

Partnering with OnAir, Mobilink offers GSM network onboard aircraft, allowing passengers to not only use their mobile phones for making and receiving calls and text messages, but also enabling them to send and receive data over GPRS.

Air France has become the first airline in the world to offer this service on international flights. Using the Mobile OnAir system, Mobilink subscribers travelling onboard one of the Airbus A318 aircraft operating on European routes can avail SMS and MMS services, exchange emails and browse the web using any phone with Internet access. Customers will be able to make and receive phone calls in the second phase of the trial period, as the service is being regulated to maintain passengers' comfort and well being.

Mobile OnAir enables passengers to use their GSM mobile phones and smart phones, such as BlackBerry, during flights-after takeoff and before landing. The service supports voice communications and text messaging, as well as General Packet Radio Services (GPRS).

Mobile OnAir works like a roaming service on ground. It is billed by the passenger's home mobile operator. To use the service, passengers with an international roaming subscription simply switch on their mobile phones on a Mobile OnAir-equipped aircraft. When a mobile phone is logged on to OnAir's network, the display will show "OnAir" and the passenger can start to use their phone as normal.

Mobilink promises to maintain its technology leadership and customer satisfaction by offering more state-of-the-art services in the near future.

http://www.brecorder.com/index.php?id=693878&currPageNo=1&query=&search=&term=&supDate=

 

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Stock gurus optimistic about economy ​

Saturday, February 16, 2008

KARACHI: The crucial general elections in the country on Feb 18 are to decide who will rule the country and it will also set the mood at the local stock exchanges.

While political analysts are unsure about the outcome of the polls following the situation obtaining after Benazir Bhutto’s assassination in December last year, stocks gurus are optimistic about the future of local bourses regardless of which political party would be the winners on coming Monday.

Brokers expect to record healthy turnover in the days to come, though many people think voter turnout would be thin at the elections for fear of violence. “We hope for the best at the local bourses. Whoever comes into power, things are likely to settle down after a brief stress,” said Arif Habib, a former chairman of the Karachi Stock Exchange (KSE).

These days the country is passing through a transitional phase and capital markets too. The outcome of the elections would have its impact on reshaping the investors’ mindset. This transitional phase would end a few days after the formation of the next government, he added.

Habib also fears law and order situation over the next week and sees negative impact on markets in short to medium term if untoward incidents take place. “Political developments during the outgoing week show that elections would be held in peaceful atmosphere. If anyone (or party) tried to sabotage the electoral process, then the police, Rangers and Army personnel would be there to handle the situation,” said Dawood Jan Muhammad, Director-Member on the KSE Board.

He maintained that the conclusion of the elections would calm down the charged political atmosphere in the country and generate buying activities on the bourses. Market players had already started exploiting the available potential in the stocks market for two reasons: one the market had already shed massive points on concerns of political uncertainty, law and order situation and a slowdown in domestic and world economies, and second, players were foreseeing an investment-friendly environment at the local bourses in the post-election scenario, he said.

He was of the view that the availability of CFS MK-II product from April 7, which would provide unlimited financing to investors, would also strengthen the bull-run after the elections. Chairman of AKD Securities Aqeel Karim Dhedhi sees continuity of economic policies regardless of the fact which party or a coalition of parties comes to power.

He was of the view that the Pakistan People’s Party (PPP) and the Pakistan Muslim League (N) both had been in the government twice in the past and if any one of them or both of them formed the next government in coalition, then they would not roll back the liberalisation of the economy.

“Consistency of economic policies would continue to run capital markets on upward trends,” he believed. If the Pakistan Muslim League-Q (PML-Q) again came to power and formed government with its allies, then there would neither be political or economic instability in the long run, he added.

“The situation in Wana and Swat is under the government’s control. Now we expect little reaction from militants,” he said. Economic fundamentals were strong enough to let bulls advance their journey on the bourses. The increasing demand for fertilisers, cement and energy in the country, and the setting up of power projects with bank financing on high rate of mark-up would result in banks earning high profits this year too.

Moreover, the decline of the Pakistan rupee against Chinese and Indian currencies was likely to benefit the Pakistan textile sector. Importers would turn more and more to Pakistan this year, Dhedhi said.

Stock gurus optimistic about economy

 

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US to outsource IT projects to Pak firms ​

Saturday, February 16, 2008

KARACHI: Pakistan is expected to acquire a significant share of American companies’ outsourcing agreements in information technology as a number of firms have shown interest in tapping the rich potential of Pakistan’s IT industry services.

“During a recent series of meetings with a visiting Pakistani delegation, several renowned companies in USA expressed their willingness to outsource various projects to Pakistani companies,” a spokesman for Pakistan Software Export Board (PSEB) stated.

The spokesman said that the Mayor of Houston, Bill While, announced 15th of January, 2008 as “Pakistan Software Export Board Day”. “This announcement speaks of the trust and confidence placed by the US business community in the Pakistan IT Industry,” he added.

The spokesman expressed hope that outsourcing projects from US companies to Pakistan would increase job opportunities for local skilled professionals, boost IT exports and earn more foreign exchange.

The Pakistani delegation, led by PSEB Managing Director Yusuf Hussain, held detailed meetings and networking sessions with leading corporations, trade chambers, academia and IT companies. These meetings were held in various American cities including Houston, Austin, Polo Alto and Chicago, reputed to be the hub of IT activities. “These networking sessions have generated valuable business leads, which are likely to transform into successful business ventures,” he mentioned.

He stated that the USA companies that are considering outsourcing IT projects to Pakistan are Yahoo, JP Morgan, Motorola, Sun Microsystems, Continental Airlines, Chase Bank, Houston IT Department, Prime Communications, American International University Houston, Cyber Tex, Cadence and Goldman Sachs. Some American Universities and academic institutions have also shown interest in developing a student exchange program with Pakistan to open training centers in the country, which is an encouraging sign for the local IT Industry.

The visit of Pakistan IT delegation and the networking sessions in USA were arranged by PSEB in collaboration with Texas Trade Council (TTC), Organization of Pakistani Entrepreneurs of North America (OPEN) and Embassy of Pakistan in the USA. The purpose of this visit was to provide a platform to Pakistani IT companies to showcase their products and services in front of a focused audience.

US to outsource IT projects to Pak firms

 

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$1.4bn paid for debt servicing ​

Saturday, February 16, 2008

KARACHI: The country paid $1.464 billion on external debt-servicing during the first half of the current fiscal year, of which $853 million were used for retiring principal amount while $511 million were spent on interest.

Besides this, from July-December 2007 the government retired public and publicly guaranteed external liabilities worth $1.023 billion, of which principal loans were $599 million and interest was $413 million.

These payments were made in two installments, the first installment was paid during July-September 2007 when the government paid $647 million and it retired $717 million in second installment during October-December 2007.

The SBP’s latest statistics showed that $990 million were used for retirement of medium and long-term loans (more than one year period). The break-up showed that $302 million were returned to Paris Club and $288 million were paid back to multilateral whereas $40 million were paid to other bilateral foreign lenders.

Moreover $64 million paid for Eurobonds & Sandik Metal whereas $38 million were paid for military payments and $27 million were consumed for commercial loans/credits.

For the short-term loans (less than one year) $28 million were paid back to Islamic Development Bank (IDB). For repayment of private and non-guaranteed loans $255 million were incurred. These all loans were for medium and long term (more than one year). $87 million were paid back to International Monetary Fund (IMF) in which $3 million were used for interest payment.

$1.4bn paid for debt servicing

 

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Korangi Creek Industrial Park opened ​

Saturday, February 16, 2008

KARACHI: Governor Sindh Dr Ishratul Ebad Khan inaugurated the Korangi Creek Industrial Park (KCIP), a project undertaken by the National Industrial Parks Development and Management Company (NIP), a subsidiary of Pakistan Industrial Development Corporation (PIDC), on Friday.

“We will make all possible efforts to facilitate both local and foreign businessmen. The industrial progress that Pakistan is making is because of the government’s policy of privatisation and public-private partnership,” said Ishratul Ebad Khan.

Governor Sindh directed the City Nazim of Karachi, Syed Mustafa Kamal, who was present at the ceremony, to lay the main road leading to the industrial park instantly, to facilitate the KCIP project and to support healthy business activities in the area.

The government will try its best to help improve the security of industrial areas which cannot be neglected any further after the chaos of Dec 27, 2007, Ebad added.

“We are striving to support the industrial progress of the country, and to facilitate the businessmen and business activities has been our policy. The govt has been pursuing the policy of creating more and more opportunities for employment and to lessen poverty in the country. One window operation was a far cry in our country, but it is very heartening to see projects like these where one window operation is no longer a dream,” he added.

KCIP is a state-of-the-art project which has been developed with the assistance of the internationally renowned Jurong Consultants of Singapore because of their expertise and wide experience.

Korangi Creek Industrial Park opened

 

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Real estate sector expects revival after polls ​

Key word is ‘stability’, HBFC chairman, real estate investors, developers opine

Saturday, February 16, 2008
By Faryal Najeeb

KARACHI: Major players of the real estate and housing and construction industry are desperately hoping for fair elections to witness a revival of their sector which is experiencing an all-time low period while some believe that property prices would shoot up with revival of investors’ confidence in the country.

“Trading of properties is at a standstill now, after the elections properties in Pakistan would spiral up to five times as the new government would be able to offer a stable country to investors,” said FPCCI sub-committee for housing and construction Vice President Munir Sultan.

He said that according to the World Bank report of 2007, there is a shortfall of 8.82 million proper houses in Pakistan in comparison to the population while Karachi happens to be the most-affected city of the country. He hoped that the new government would give due attention the neglected housing sector.

The Real Estate Investment Trusts (REIT) are likely to help reduce the housing shortfall, as the sector would become a documented economy and it would be possible to raise the desired amount to start new projects, he said.

A proper white economy would also provide revenue to the government while benefiting small investors as well. This, he said would revive confidence in the market which would lead to property price hike.

Basit Mahmood, Project Director at GlobBiz said that there would be a rise in property prices but one cannot be certain on how much as property prices increase when there is development in a certain area such as infrastructure and airports.

He said that Pakistan was a rapidly developing country but deteriorating law and order and political uncertainty hampered the housing sector growth that lead to loss of investors’ confidence. He hoped that after polls there would be stability.

“Stability ensures secure return on investments, which was the real attraction for the investors,” Basit said. House Building Finance Corporation Chairman Zaigham Rizvi was of the view that though the new government was likely to revive investors confidence in general, the same could not be said for the real estate industry as it was a long term investment and not volatile like the stock exchange which might experience a resurge soon after polls.

The new government has to announce its policies first, following which the real estate investors would decide their movements, he said adding it was too early to forecast post-election investment scenario in real estate.

While the local market is at its all time low, Pakistani builders who have ventured into foreign projects are receiving a tremendous response. The UAE based projects of Rufi Builders and Chapal Builders were oversubscribed.

Rauf Chapal of Chapal Builders informed The News that local builders invested abroad after seeing the dismal situation of the local market. “I have property here but I cannot work due to the law and order and political situation of Pakistan as I face losses in millions each time,” he said.

Chapal was of the view that if the elections were fair the local industry stood a chance to survive but added that nothing could be presumed in advance as it all depends on situation following the polls. Mehdi Raza of Estate Zone said that local investors ventured into foreign projects as those countries offered them better returns on investments which this country failed to do so. He said that they had no other option but to cross the border to other countries to stay in business.

“It is ironical that even established businesses in Pakistan now have to look elsewhere to continue with their business just like lot of Pakistanis who go abroad for better education and job opportunities,” he commented.

Real estate sector expects revival after polls

 

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Cellular subscribers hit 78.7m ​

Saturday, February 16, 2008

KARACHI: The cellular subscriber base in the country reached 78.7 million in Jan 2008, recording an increase of about 1.9 million subscribers or 2.4 per cent from the previous month, according to latest figures released by Pakistan Telecommunication Authority (PTA).

This addition has taken the cumulative increase over seven months (July-Jan) of FY08 to 15.6 million subscribers or 25 per cent. The cellular mobile density, as a result, has hit 49 per cent against 48.6 per cent in Dec 2007. The major highlight of the January figures was the fact that Telenor became the third cellular operator after Mobilink and Ufone to cross the 15 million mark, as its subscriber base rose by approximately 754,000 in Jan 2008 to 15.4 million.

While subscriber base of Telenor continues to grow at a brisk pace, Ufone, the cellular subsidiary of PTCL, has seen its market-share dip consistently over the last few months, dropping to 20.9 per cent in January from a high of 22.5 per cent in August 2007.

The major beneficiary of this marginal decline has been Telenor, improving its market share by 1.9 per cent over the same period to stand at 19.5 per cent. There has however been no change in the market share-based standings of major players, whereby Mobilink continues to occupy the top slot with a market share of 39.2 per cent, followed by Ufone (20.9 per cent), Telenor (19.5 per cent) and Warid (17 per cent).

Farhan Rizvi, telecom analysts at JS Global Capital, believes that there is still potential in the cellular industry to grow as it has only captured 49 per cent of the total market which is still low.

The cellular mobile density is expected to hit 70-75 per cent after which there will be some slowdown in the growth rate of the industry. In 2010, the cellular subscribers will go to 100 million with the aggressive marketing of the cellular companies attracting more and more of the youth which is 50 per cent of the population.

Cellular subscribers hit 78.7m

 

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CSF report on Pakistan being prepared​

KARACHI, Feb 15: The Governor of State Bank of Pakistan, Dr Shamshad Akhtar, has asked the Competitive Support Fund (CSF) to prepare an action-oriented report, with clear implications to Pakistan’s sectors to improve its competitiveness on a global footing.

During her meeting with the officials of the CSF, which is working on ‘State of Pakistan’s Competitiveness Report 2008’, Ms Akhtar lauded the fund for preparing such a report. She provided her valuable input and shared that the report should include defined actions and implications for the respective sectors and especially include relationship between inflation and competitiveness to educate the audience on the inter-linkages between these two.

This includes decomposing macroeconomics and sector level issues, such as energy crisis and competitiveness as well as issues, such as raising per capita income, increasing demand and collusive behaviour. She linked the raised interest rates in Pakistan with worldwide oil prices and global food commodity prices to combat inflation. The report will track Pakistan’s performance, spotlighting the areas of progress and areas of further focus, says a press release.

CSF report on Pakistan being prepared -DAWN - Business; February 16, 2008

 

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First half debt, liabilities surge by $2.4 billion to $42.88 billion ​

KARACHI (February 16 2008): The country's external debt and liabilities witnessed a surge of 2.4 billion dollars to new 42.88 billion dollars during the first half of current fiscal year, primarily due to slowing down of privatisation inflows and soaring oil prices.

"During the current fiscal year, the country has not received a single penny for reimbursement from the US, while the current account deficit is on the rise, which compelled the government for fresh borrowings,' economists said.

The State Bank of Pakistan (SBP) on Friday said that the country's foreign debt and liabilities had gone up by about 6 percent during the July-December period of the current fiscal year. As a result, the overall external debt and liabilities reached new level of 42.882 billion dollars on December 31, 2007, which earlier stood at 40.481 billion dollars at the end of 2006-07.

During this period external debt registered an increase of 6.49 percent to 41.540 billion dollars from 39.008 billion dollars, a raise of $2.532 billion, while foreign liabilities decreased by 8.89 percent to 1.342 billion dollars against 1.473 billion dollars on June 30, 2007.

However, foreign debt, as per ratio of GDP, improved during July-December of 2008 as it declined to 26 percent of GDP against 27 percent at the end of fiscal year 2007. Economists said that rising current account deficit had compelled the government for fresh borrowings from both internal and external sources. Therefore, overall debt from both sources had increasing gradually during the current fiscal year.

During this period the government delayed issuance of Global Depository Receipts (GDR) due to political uncertainty, as negative impact was seen in the shape of rising current account deficit, they said. They said that as per GDP, external debts were still under control and Pakistan's sworn rating B1 and B+ issued by Moody's and Standard and Poors respectively would be stable.

It is likely that the country would further borrow during the current fiscal year to meet external expenditure. However, despite further borrowing, its overall debt (including internal and external) would be under 60 percent of GDP, they said.

SBP statistics depict that country's external debt has been consistently climbing since fiscal year 2004 and overall country has borrowed some 8 billion dollars during last four and a half years, which had never been witnessed in the past.

In the fiscal year 2004 the country's external debt and liabilities stood at 34.887 billion dollars as compared to 42.88 billion dollars in 2008, showing an increased of 23 percent during last four years.

Business Recorder [Pakistan's First Financial Daily]