Pakistan Economy - News & Updates - Archive

[Neo]

Mexico eyes boosting trade ties with Pakistan​

ISLAMABAD: Mexican government is keen to accelerate the trade and investment activities with Pakistan considering it an important market for its various products, said Ambassador of Mexico, Arturo Hernandez Basave here Monday.

During a meeting with President of Islamabad Chamber of Commerce & Industry (ICCI) Muhammad Ijaz Abbasi, the Mexican envoy said after 50 years of diplomatic relations with Pakistan, his country has recently opened its Embassy at Islamabad to enhance the trade between the two countries. Ambassador informed that Pakistan had established its Embassy in Mexico 40 years ago, whereas since 1981 Consulate General of Mexico has been working in Karachi. Mr Basave said Pakistan and Mexico formed Political Committee and Committee for Trade and Cooperation in 2006 for strengthening political and economic relations with each other. This committee meets twice a year to discuss various political and economic issues and review the progress.

The envoy said that Mexico would also open a Consulate General in Lahore in near future. Mexico has restricted visa policy for all the countries around the world, which involves certain documentation for grant of visa. He said 84 percent of Mexican trade is with the USA and it is an export-oriented economy, dominated by a mixture of industries and agriculture. Mexico is the biggest exporter in Latin America with overall exports of $267 billion in 2007.

The ICCI President, welcoming the Mexican envoy said that the overall trade between Pakistan and Mexico was very low, which remained below $100 million in 2006-07. Balance of trade is in favour of Pakistan as the exporters export textiles, rice, sports goods, surgical instruments, pharmaceuticals, chemicals, leather garments, jewellery, gems and jewellery to Mexico to boost exports.

He said private sectors of both the countries should come forward and interact more frequently to realize existing potential between Pakistan and Mexico. He said there was enormous scope for expanding and developing cooperation in mutually beneficial fields.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Domestic debt rises to Rs 2.944 trillion in seven months ​

KARACHI (March 25 2008): The country's domestic debt has gone up by Rs 347 billion to Rs 2.944 trillion during seven months of the current fiscal year in the wake of slowdown in foreign inflows.

The high fiscal deficit and slow privatisation process since Supreme Court decision against Pakistan Steel sell-off has had negative impact on the overall foreign inflows and compelled the government to utilised its local resources to meet financial requirements.

According to the State Bank of Pakistan (SBP), overall domestic debts include permanent debt, floating debt and unfunded debt stocks have registered a growth of 13.37 percent during July-November period of the current fiscal year.

Domestic debt touched new peak level of Rs 2.944 trillion at the end of January 2008 from Rs 2.597 trillion on June 30, 2007, depicting an increase of Rs 347.481 billion during July-January period.

This tremendous rise in debt stock was driven by growth in the floating debt, which includes Treasury Bills (Three Months), Market treasury bills and MTBs for Replenishment, being up by 21.20 percent during this period.

The floating debts touched the level of Rs 1.343 trillion in January 2008 as against Rs 1.108 trillion in June 2007, depicting an increase of Rs 235.013 billion. Permanent debts, including market loan, federal government bonds, income tax bonds etc, have gone up by 8.49 percent, or Rs 46.978 billion, to Rs 599.953 billion from Rs 552.975 billion in June 2007.

Un-funded debt, based on the national saving schemes, went up to Rs 1.001 trillion in January from Rs 936.081 billion at the end of fiscal year 2007, depicting a jumped of Rs 65.489 billion. Economists said that higher fiscal deficit following the high development expenditure and slow privatisation were the main reasons of rising domestic debt.

They said that after the establishment of new political government it is expected that privatisation would go on a fast track, which would help to boost foreign inflows. "The delay in the US logistics payment is another reason of increasing domestic debt. However, as first payment was received in the last week of February 2008, it is expected that next statistics of domestic debt would be lower than current debts," they added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'QIE a model industrial estate' ​

LAHORE (March 25 2008): The Quaid-i-Azam Industrial Estate (QIE) has now become a model industrial estate of the country because of the untiring efforts of its board of management, said estate president Mian Nauman Kabir who revealed in a progress report.

He said that special attention has been given towards improving the infrastructure and sewerage system and that these two areas were creating lot of troubles for industrialists. "They were unable to expand their operations because of non-availability of proper network of roads. Now after one year the industrialists of the area can proudly invite their foreign buyers," he added.

He said a most modern security system was established in the area with round-the-clock policing to ensure the industrialists' safety. "Safety gates have been established at all the entry and exit points. He said that not only streetlights were installed but a separate department of solid waste management was also introduced in the QIE," he added. The report also revealed that 10,000 saplings were planted in the industrial estate.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

ADB may provide $50 million for Renewable Energy Plan Tranche-2 ​

FAISALABAD (March 25 2008): The Asian Development Bank (ADB) is considering providing 50 million dollars to Pakistan for "MFF - Renewable Energy Development Sector Investment Program, Tranche-2" (Formerly Renewable Energy Development - Project II) to increase energy production and use of clean energy of small to medium-sized hydropower and wind power sources on a financially sustainable manner.

According to Alternative Energy Development Board (AEDB) sources, the Tranche-2 sub-projects are part of Pakistan's integrated renewable energy development investment program, targeting to reach 3.5 percent of the national power generation by 2015. The investment will contribute to boosting economic development through providing adequate and affordable power supply and reduction in CO2 emission in the Northern Areas and Sindh.

The project outcome will be increased energy production and use of clean energy of small to medium-sized hydropower and wind power sources on a financially sustainable manner, official sources added. AEDB sources said the Project outputs include Part A: construction and operation of four small to medium-sized hydropower plants with a total capacity of 54 MW; and Part B: construction and operation of a 50 MW wind farm project.

The country is at a stage where Alternative Energy has become an attractive option to not only produce electricity to bridge the power-deficit on the national grid, but also to provide electricity to remote, off-grid rural areas. The provision of electricity to such areas would generate economic activity, which, in turn, would create Employment Opportunities, Poverty Alleviation and improvement in health and social uplift; meaning Alternative Renewable Energy can effectively play its part in achieving the millennium development goals (MDGs) as well. In addition, 700 MW of wind energy would be made available to the national grid by the year 2010, which would certainly help in meeting the current energy shortfall in the country, claimed AEDB sources.

On Monday, AEDB sources mentioned that Pakistan is facing energy crisis, and every crisis is an opportunity to rise to glory and honour by accepting the challenges it entails. Rising to this challenge and depending on indigenous alternative energy resources is the need of the hour. The Alternative Energy Development Board has accepted this challenge and would continue to strive for realising the Vision-2030 by fully utilising the Alternative Energy Resources available in the country.

AEDB sources explained that the Economic Coordination Committee (ECC) of the Cabinet has approved the policy for use of bio-diesel as an alternative fuel in its meeting held on February 15, 2008. The policy was formulated by the Alternative Energy Development Board and marks achievement of another major milestone in the Alternative Renewable Energy Sector of Pakistan.

Under this policy, the Ministry of Water & Power in coordination with the AEDB shall be the apex coordinating and facilitating body for the national bio-diesel programme.

The gradual introduction of bio-diesel fuel blends with petroleum diesel so as to achieve a minimum share of 5 percent by volume of the total diesel consumption in the country by 2015 and 10 percent by 2025. The Oil Marketing Companies (OMCs) to purchase bio-diesel (B-100) from bio-diesel manufacturers; and sell this bio-diesel blended with petroleum diesel (starting with B-5) at their Points of Sale. The Ministry of Petroleum & Natural Resources shall come up with the fuel quality standards for B-100 and blends up to B-20.

Ogra shall regulate the pricing mechanism of various blends of bio-diesel (B-5, B-10, etc) and ensure its cost-competitiveness with petroleum diesel. All imported plant, machinery, equipment, and selective raw material, eg Jatropha, for use in production of bio-diesel shall be exempted from customs duty, income tax and sales tax.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Karachi's place in the new setup ​

ARTICLE (March 25 2008): Karachi's importance in the national configuration can be ignored only at the peril of the country's economic well-being. This feeling of isolation and perceived hostility from certain quarters gets all the more piquant when one ponders on Karachi's contribution to Pakistan movement before independence and the building up of the nation ever since.

With 12% of the country's population living in this metropolis, and generating above 67% of the provincial revenue as well as 65% of the Federal taxes, the share of the budgetary allocations for the city are a mere pittance.

The conditions of civic services, roads, transport, communications, health facilities, educational institutions, the sewerage system, the water supply, and above all the electricity breakdowns and perennial power shortage are nothing to be proud of.

This sense of deprivation and neglect leads to a callous disregard of all civilised behaviour on the part of the citizenry. The mad rush and hustle-bustle of the city, the traffic chaos and incessant noises and pollution pervading most of the city (except the posh areas of DHA and Clifton), drive most people mad and oblivious to the dangers to the life and limbs of themselves and others. Suicidal tendencies thus fostered give rise to extremism and lead some others to terror and other criminal behaviour.

Despite all these disadvantages, Karachi as the only active sea port and the largest business and industrial centre of the country, acts as a magnet to fortune seekers from far and wide. According to one estimate the number of daily new arrivals in the city exceeds 30,000, piling up ever-increasing pressure on the already meagre resources and feeble city services, strained to the bursting point. The daily influx includes an undetermined number of social undesirables and reprehensible characters, who add to the problems of police and other authorities who have no clue of the antecedents of these new arrivals pouring into the city daily and lost in labyrinthine slums of the city.

What this portends for the older city dwellers and established, genuine Karachiites, can well be imagined. They are swamped literally in the multi-ethnic, mostly illiterate rustics coming from all corners of the country with the sole objective of grabbing money, by fair or foul means, the quickest way. Since such people have no ties to the city or its traditions, except the lure of the lucre, and, in fact, lack the very basic modicum of civilised behaviour, the city has become an overgrown village where the law of the jungle prevails.

It is pertinent to ask, as to what percentage of the national and provincial budget are the authorities prepared to apportion for ameliorating the conditions of Karachi and its residents? Also, what share of the top positions in the government are reserved for the 12% of the country's population living in this city?

Business Recorder [Pakistan's First Financial Daily]

 

[khanz]

whats happening in karachi is making me sick pakistan is probably the only country that kills it's economic heart.
I really hope they start fixing these problems.I went to karachi a while back all i remember is constant power cuts and the roads being in a terrible state.

 

[smt]

i love karachi, but its the ugliest city in the world iv ever seen, in my opinion, and iv seen quite a few

 

[Neo]

i love karachi, but its the ugliest city in the world iv ever seen, in my opinion, and iv seen quite a few

Who ever is tired of Karachi is tired of life!

 

[Neo]

Industries suffer after major power breakdown ​

Wednesday, March 26, 2008

LAHORE: Tuesday’s power breakdown has jolted the industry causing losses of billions of rupees to the sector, as industries in major cities remained inactive for over seven hours.

WAPDA power transmission system tripped from Multan to Islamabad, as a result of which all industries in the province came to a screeching halt. Industrial units that have their own power generating units were operational, although the proportion of such industries is very low.

The prolonged power breakdown affected industries in different cities of Punjab including Multan, Sahiwal, Okara, Kasur, Lahore, Gujranwala, Gujrat, Wazirabad, Sialkot and Faisalabad. These industries include ginning, spinning, weaving, dairy, leather tanneries, steel melting and re-rolling, wood and furniture, sports goods and medical and surgical instruments. These industries are considered to be the backbone of the economy, as they contribute a hefty percentage to the country’s foreign exchange earnings.

In Punjab, more than 200 steel re-rolling and melting units are currently operational. Former chairman of the Pakistan Steel Melters Association Mian Muhammad Saeed said that the industry suffered a loss of millions of rupees.

Shiekh Arshad, a renowned leather industrialist, said that businesspeople were facing two types of losses: one in terms of the shutting down of the industry, the loss of which could be recovered by running an extra unit, and the other loss was a result of the declining credibility of businesspeople in cases where orders were delayed, which brought about irreparable losses.

He said that a large number of industrialists, especially exporters, had faced both types of losses. However, small industries, he stated, in comparison with bigger ones, were suffering greater losses, adding that big industries had already made alternative arrangements for electricity due to the ongoing power shortage in the country.

Mubashir Sheikh, a businessman in the plastic industry, said that the plastic industry consisted of cottage, small and medium units. He said that few people in the plastic industry sector had alternative energy arrangements.

Hence they suffered huge losses as a result of consistent power failures. Another extensive loss borne by the plastic industry was that of raw materials, which due to sudden power outages were retained by machines, making theme useless in most cases.

Industries suffer after major power breakdown

 

[Neo]

Tuwairqi to invest in alternative energy ​

Wednesday, March 26, 2008

KARACHI: Tuwairqi Steel Mills a subsidiary of the Al-Tuwairqi Group has planned to invest in alternative energy and utilise Thar coal for power generation, said Zaigham Adil Rizvi, Director Projects while talking to The News at the 5th ITIF Asia 2008 being organised at the Karachi Expo Centre.

“In view of rising international steel prices, we as a local steel producer have been trying to limit the local steel prices so that they remain within customers’ reach and not go beyond its control, but steel prices are shooting to all time high with increasing demand. Steel input is rising with the steel prices in the world,” Rizvi said.

He said; “Karachi’s atmosphere is business-friendly and overall we are satisfied with the present political situation of the country.”He expressed hope that the new government would work to bring more invertors in Pakistan. But the new government would have to work a lot in energy sector because without power industry cannot be run.

Tuwairqi is participating in alternative energy and focusing on solar energy in Punjab and wind energy in Sindh. When asked would Pakistan be able to use its huge local coal reserves to produce power for steel industry he replied, “Steel industry is not much dependent on coal for power generation rather our industry runs on gas, but we are interested to make use of local coal especially Thar coal and surely devised a plan to generate power through local coal in future.”

Many countries including China and Korea are erecting total steel structures because of which steel consumption is increasing but steel has an edge over concrete that it can be recycled completely to be used more than once.

“We wish that new steel companies come to the steel sector of Pakistan so that more competition benefits our country. The technology that we use in Tuwairqi Steels is very good and efficient; we would use Japanese technology in first phase and German technology in second phase of the steel mill,” said Rizvi.

Tuwairqi to invest in alternative energy

 

[Neo]

Delays in alternative energy plans irk investors ​

Wednesday, March 26, 2008

KARACHI: Pakistan is moving forward in the alternative energy sector but it needs to learn from the experiences of global leaders in alternative energy to cut short the time and endeavours in acquiring reliable alternative energy supply for the country, Gul Ahmed Energy General Manager Danish Iqbal told The News.

“Learning from the experiences of other countries in alternative energy would cut down our learning time to half,” Iqbal added talking to the scribe during the 2nd International Conference on Alternative Energy and Power (ICAEP) held in conjunction with 5th ITIF Asia 2008 on Tuesday at Karachi Expo Centre.

Adviser to Prime Minister on Alternative Energy Yaseen Malik, inaugurated the 2nd ICAEP along with Alternative Energy Development Board (AEDB) CEO Air Marshal (R) Shahid Hamid. Another investor in alternative energy told The News that the US has added 4,500MW of electricity in alternative energy only last year because of good planning.

Alternative energy plans in Pakistan are being delayed and if this goes on like this the investors will be fed up because it is offensively unpleasant for the investor who has to wait long for even small things to get done, said Mian Sohail Hussain, an investor in alternative energy.

AEDB must have a full fledge office in Karachi to facilitate investors to avoid going to Islamabad wasting time and money even for minor problems. There is potential of around 0.35 million MW capacity but practical steps are needed.

Sindh Government has provided 34,000 acres of land to Alternative Energy Development Board (AEDB) whereas 5 licenses for micro mini hydroelectric projects have been issued in Punjab and three in Sindh, Air Marshal (r) Shahid Hamid, CEO, AEDB said. —FZ

Delays in alternative energy plans irk investors

 

[Neo]

Outlook negative on Pakistan debt ​

Wednesday, March 26, 2008

LONDON: Standard & Poor’s maintained its negative outlook on Pakistan on Tuesday despite the appointment of a new prime minister as the country still faced tough decisions over its growing fiscal deficit.

The ratings agency said it would keep its B+/Negative/B foreign currency ratings on the country and its local currency BB/Negative/B ratings.S&P said the newly elected coalition government would ease political tensions in the country following the martyrdom of Benazir Bhutto in late December but warned that Pakistan’s ratings could be lowered if the new rulers proved too distracted to deal with growing economic challenges.

“The incoming administration faces the considerable challenge of arresting growing fiscal and external imbalances against deteriorating external conditions, a task Prime Minister Gilani may prove ill-equipped to handle, given an untested and potentially fractious cabinet,” S&P said in a statement.

Outlook negative on Pakistan debt

 

[Neo]

FTAs with China, Malaysia to boost Pakistan’s exports​

* Country’s exports to China and Malaysia could jump to $4.50 billion and $1.8 billion by 2012​

KARACHI: Free Trade Agreements (FTAs) with China and Malaysia hold bright prospects for Pakistan’s export sector to tap the enormous potential in shape of market access to local products.

Under these trade arrangements, country’s exports could jump to $4.50 billion to China and to $1.8 billion to Malaysia by 2012 if the opportunities were exploited by the local industry, said speakers at a seminar on “Exploring Pakistan’s Export Potential in China & Malaysia in the context of the Free Trade Agreements” here on Tuesday.

The seminar was organised by WTO Cell, Trade Development Authority of Pakistan (TDAP) in collaboration with Karachi Chamber of Commerce & Industry (KCCI).

Mujeeb Khan, Head TDAP’s WTO Cell highlighting various aspects of the FTAs stated that to exploit full potential of these trade arrangements, TDAP has been extending full support to exporters to benefit from it. About FTA with China, Khan said that Pakistan exported goods worth $ 1 billion to China in 2006. Chinese market offers $5 billion potential for all Pakistan’s exportable products to China, which after zero-rated access would witness an encouraging growth after three to five years.

However, he felt that tapping the indicative potential needs to improve the base of production, quality and competitiveness of their products through enhanced productivity.

As far as FTA with Malaysia is concerned the TDAP official pointed out that total indicative potential for Pakistan’s products in Malaysian market has been estimated at $1.17 billion against the present level of only $54 million. “The benefit given in the form of concessions under FTA can be materialised to achieve the envisaged potential provided tangible efforts in terms of competency level and quality of products is ensured to the requirements of Malaysian buyers,” Mujeeb Khan added. On this occasion, some participants of the seminar identified lack of awareness about FTA in the targeted markets and absence of any assessment about the needs of buyers in these two markets.

Khan said that TDAP has taken the initiative to disseminate the information about the FTA with China and Malaysia and added that Business Support Units in various countries are part of the need assessment exercise in various markets.

KCCI President Shamim Ahmed Shamsi said that exporters are confronting various problems in exporting their products to China and Malaysia because most of the exporters are not well-informed about the needs of various products in these two markets. He requested the TDAP to provide details about the needs of these two markets to local producers so that they could enhance exports to these markets.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

SECP taking measures to boost investment in stock market​

By Ijaz Kakakhel

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) have taken several steps for bringing more investment in the stock market of the country in the last two years.

The SECP has developed new products / system, usually know as market development that helps in improving investment in stock market, official documents obtained by Daily Times revealed. Main features of this system are:

Free Float Index: The KSE-30 Sensitive Index based on free float of scrips was put in place with effect from September 1, 2006. There had been a need to introduce a free float index that is a representative of the market as the capitalisation weighted KSE 100 Index was not representative because of over weightage of a few scrips. Free float means proportion of total shares issued by a company that are readily available for trading at the stock exchange. It generally excludes the shares held by controlling directors/sponsors/promoters, government and other locked-in-shares not available for trading. Free-float index gives a much better market representation than indexes constructed on the basis of total market capitalisation of the companies.

Introduction of Cash Settled Futures Contracts Market: Cash settled futures contracts were introduced at KSE on April 2, 2007 subsequent to promulgation of the Regulations Governing Cash Settled Futures Contracts. Cash Settled Futures Market being a derivatives market provides another avenue of source of financing for the Capital Market, increasing the liquidity thereof.

Unified Trading System Platform: The introduction of a unified trading platform will enable the exchanges to expand their trading activities and enter into a new era which envisages increased trading volumes, better price discovery, and a better quality of trade execution for the investors. The introduction of this trading facility would help reduce fragmentation of our local markets and facilitate the introduction of new diverse products to cater to various needs of the investors, leading to a progressive deepening of our markets. After approval of the Unified Trading System (UTS) Regulations of Lahore Stock Exchange and Islamabad Stock Exchange by the SECP in April 2007, the UTS system started on April 30, 2007.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

DDWP approves 32 uplift projects worth Rs 584m​

ISLAMABAD: Departmental Development Working Party (DDWP), that met at the Federal Board of Revenue (FBR) here on Tuesday under the chairmanship of Member (Administration), approved 32 development schemes at the total cost outlay of Rs 584 million.

Representatives of the Reformed Units from all the provinces along with officers from Planning Commission, Ministry of Finance and Pak PWD attended the meeting.

Out of 35 schemes presented before the DDWP, 32 were approved at the total cost outlay of Rs 584 million. The schemes included construction of various offices, which are currently housed in rented premises and construction of residential units for the officers and staff of FBR.

Purpose of the meeting was to consider and approve various projects relating to the offices and residential accommodation of the officers and staff of FBR as a step forward towards 5-Year Infrastructure Development Plan of the Admn Wing of FBR HQ.

The Admn Wing is carrying out comprehensive and concerted efforts to improve offices of the field formations and also provide suitable residential accommodation to the officers and staff of Income Tax, Customs, Sales Tax and Federal Excise departments.

Daily Times - Leading News Resource of Pakistan