Pakistan Economy - News & Updates - Archive

[Neo]

Lucky to export cement to S Africa ​

Delays Global Depository Receipts

Thursday, March 27, 2008

KARACHI: Lucky Cement is optimistic about the expansion process of its first production line (4,200 tonnes per day or 1.26 million tonnes per annum) in its southern plant and plans to start producing clinker by November, which will increase its annual cement capacity to 7.6 million tonnes per annum.

According to the management, the prevailing political scenario has forced Lucky Cement to delay the Global Depository Receipts (GDR) issue, as they do not intend to offer shares at a low price. However, they expect to go with the GDR issue, once political clarity evolves. Meanwhile, the company is further aiming to install the second line of the same capacity after the GDR issue, JS Research reported.

Recent positive development for Lucky was the consent of South African authorities to import cement from Pakistan as it is facing a shortage of cement due to the upcoming football world cup in 2010. Pakistan can potentially export 9.0 million tonnes of cement to South Africa in the next two years. Lucky Cement is the only local cement producer that has received an export certificate from the South African Bureau of Standards.

Cement prices went further up by Rs7-8 per bag. After witnessing a rise of Rs10-15 per bag, cement companies, with a gap of one day, have again increased ex-factory cement prices by Rs7-8 per bag in the Northern region of Pakistan. At present, Lucky Cement is the largest cement producer in Pakistan, having an annual capacity of 6.5 million tonnes (21,840 tonnes per day).

Lucky Cement holds 39 per cent of the total cement export market of Pakistan (as per July-Feb 08 dispatches). It reaps the benefit of having plants both in the North and South regions of the country, enabling it to export through both land and sea at low costs. It exports in bulk through sea to India, Middle East and Africa. The management of Lucky cement believes that commissioning of new capacities in Saudi Arabia and UAE will be less of a threat as the development of new cities will create incremental demand in the region.

Moreover, countries like Qatar and Kuwait have a deficiency of limestone, so their demand for imported cement is expected to rise. This deficiency of limestone in some Middle Eastern countries has enabled the company to think on the lines of establishing grinding facilities in the region.

This can help Lucky Cement export clinker from Pakistan and sell cement in the Gulf. However, no final decision has been taken by the management in this regard.

Lucky Cement’s officials informed that cement prices have rocketed across the globe due to the construction boom in many countries. In Russia, for instance, cement is being sold at US$280 per tonne (Rs860 per bag), while in UAE, prices have gone up to AED25 (Rs427) per bag. Lucky is currently exporting loose cement at an FOB price range of US$63-66 per tonne and bagged cement at US$67-70 per tonne to the Middle East, Africa and India.

The primary concern for cement manufacturers are the rising power and fuel costs that constitute 65 per cent of the cost of sales. For reducing power costs, Lucky has already converted power generation facility of one of its plant (Pezu) from oil to gas. However, it uses coal for manufacturing purposes. Lucky is also taking measures to run kilns on gas instead of coal as prices of coal have increased by about 62 per cent from the 1st quarter of the fiscal year 08 to date, and are expected to increase further.

Cost reduction measures and benefit of economies of scale were evident in Lucky’s 1st half of 08 results where its COGS/ton stood at Rs1,995 versus industry’s Rs2,304 COGS/ton. —FZ

Lucky to export cement to S Africa

 

[Neo]

Govt okays Rs 25bn payment to OMCs​

ISLAMABAD: Government has approved Rs 25 billion to pay differential claims to Oil Marketing Companies (OMCs) to maintain oil stock in the coming months, sources in Petroleum Ministry told Daily Times on Wednesday.

Sources said that the money would be arranged through syndicated term loan from commercial banks and in cash also to pay differential claims to Pakistan State Oil (PSO), Shell and other small OMCs including Chevron.

They said that the decision came in the joint meeting of Petroleum Ministry and Finance Ministry held on the other day (Tuesday).

Sources said that government would arrange Rs 16 billion for PSO and Rs 5 billion for Shell by syndicated term loan facility whereas Rs 4 billion differential claims would be paid to small OMCs in cash. They said that the differential claims of OMCs have reached over Rs 55 billion.

The decision is also the follow up of the OMCs warning to the government in which they said that the country could face the short of oil stock in the month of May if the differential claims were not paid. They were of the view that OMCs have informed the government that if the differential claims were not paid to them, they would not be able to place orders for the month of May.

With the increase in the prices of oil in the international market, the volume of subsidy starts rising despite passing on some impact of hike in the oil prices in the international market to the consumers. Despite increase in the oil prices by caretaker government twice during the current month, the government would be bearing the burden of around Rs 20 billion subsidy in the current month due to increase in the oil prices in the international market. The government will have to work out two options, either to pass on the rising impact of oil prices in the international market to the consumers or to bear the burden of subsidy. OMCs claim that they are not able to maintain the oil stock due to financial difficulties created by the former government while capping oil prices for several months.

They said the companies were paid differential claims in the month of February by which they placed orders for the months of March and April and now they have to still place orders for the month of May. They said that they have to place order in fifteen days on the spot of buying oil in gulf countries. zafar bhutta

Daily Times - Leading News Resource of Pakistan

 

[Neo]

US imposes no cap on production in ROZs​

ISLAMABAD: Under the proposed legislation regarding the Reconstruction Opportunity Zones (ROZs) there will be no production cap unlike the African Growth Opportunity Act (AGOA).

The proposed legislation does not require joint production with Afghanistan or USA due to the proposed Rules of Origin that are simple and export friendly and they also allow required value addition can take place within Pakistan ROZs exclusively. 50 percent of Pakistan’s current export of $3.46 billion would be granted duty free access in United States.

Ministry of Commerce’s Year Book 2006-07, released recently, highlights the salient features of the draft ROZs legislation and states that the proposed duration of the legislation is fifteen years, which is the longest for any such programme. The proposed zones will be designated in consultation with the government of Pakistan and will include the border areas including FATA, all of NWFP, parts of Balochistan and the earthquake affected areas of AJK.

Following the constitution of a working group by the Prime Minister on ROZs headed by Secretary Commerce, the Ministry of Commerce obtained feed back from stakeholders in the public and private sector, discussed it with the member of the working group, synthesised the views, and informally conveyed the Government’s position to the US Embassy in Islamabad as well as US fact-finding team that visited Pakistan during August, 2006.

Pursuant to President Bush’s announcement in March 2006 in Islamabad, the US Government is working in coordination with Pakistani authorities on an arrangement setting up ROZs in Afghanistan and the Tribal Areas of Pakistan, NWFP, Balochistan and earthquake affected areas of AJK. The second TIFA council meeting was held on 3 to 4 October 2006 in Islamabad. One of the items on the agenda was discussion on ROZs. The US side was also conveyed that due to the lack of infrastructure in the trial/border areas of Pakistan, it was highly unlikely that anyone would invest in ROZs located there. Hence, these should be located in the settled districts bordering the tribal areas, and in the earthquake affected zones in the first phase to have a meaningful impact.

The United States Government has completed its inter-agency process on the proposed legislation for establishment of the ROZs in Pakistan and Afghanistan. The draft legislation has already moved to Congress during the month of March 15, 2008. Once enacted, the law will authorise the US President to give Pakistan the go ahead for duty free exports from ROZs.

Pakistan would extend existing incentives, regulatory structure available for Export Processing Zones to ROZs which includes full ownership rights, full repatriation of capital and profits, no minimum or maximum limit would be fixed for investment in ROZs, duty free import of machinery, equipments and materials would be allowed to units to be located at ROZs. There would be no sales tax on electricity and gas consumed in the said units and Foreign Exchange Control Regulation of Pakistan would not be applicable to investment made in ROZs.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Exports of developmental sectors surge by 47% in July-Feb 08​

* Govt has set a $1.555bn target of developmental sector exports for the whole year​

By Tanveer Ahmed

KARACHI: Contrary to poor performance by textile export, the export of developmental sectors as a whole registered substantial growth of over 47 percent during July-February period of current financial year over the corresponding period last year.

While country’s traditional exportable sectors are under stress for quite some time, the growth in items in developmental sectors is a positive sign, which are also part of the government’s long-term strategy to boost the exports manifold in the coming years.

The developmental sectors comprise of engineering goods including cutlery, marble and granite/onyx manufacturing, fish and fish preparations, fruits and vegetables, chemical products, gems and jewellery, meat and meat preparations, cement, furniture, etc. Country exported $1.184 billion worth of these products during first eight months of current fiscal compared to $801,696 million in the same period of last year.

Foreign trade analysts termed the substantial growth a positive development, which at least plugged the losses to some extent, incurred by declining export of textile sector, which is resulting in yawning trade gap because of fast growing import bill.

Although the growth was substantial, they believed still a lot of potential exists for further boosting the export of these items especially fisheries, fruits, gem and jewellary, furniture etc. particularly export of fruits could be further enhanced by taking advantage of free trade agreement with China, whose big population offers lucrative market to local products.

Analysts said that growth in export of these items would also help lessen the country’s dependence on textile, which has been passing through turbulent times because of stiff competition from its regional competitors.

“Well thought out strategies are needed to enhance the export of these items and increase their share in overall exports, which unfortunately have not been formulated so far,” a seafood exporter commented.

The breakup of the export of developmental categories showed that export of fish and fish preparations during eight months of current fiscal stood was at $120,248 million compared to $121,628 million in the same period of last year, export of fruits fetched $100,575 million over $83,695 million, vegetables export at $31,115 million compared to $22,235 million, meat and meat preparations at $33,008 million against $27,045 million.

Export of onyx totaled at $7,885 million against $7,945 million, chemicals at $389,820 million over $259,257 million, engineering goods at $139,859 million against $122,180 million, Gem exports at $6,023 million against $3,765 million, Jewellary at $121,077 million against $21,815 million, furniture at $7,247 million over $7,207 million, cement at $209,081 million against $82,464 million and cutlery at $36,552 million against $24,771 million.

The government has set a target of $1.555 billion for the whole year whereas last year total export proceeds of these items fetched $1.396 billion foreign exchange. “In view of export performance of these items so far, the target seems to be achievable, which was missed last year,” exporters said.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

ICCI seeks rail network from China to Gwadar, Karachi ​

ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) has suggested that a direct rail network from China be created for Gawadar and Karachi, which would help increase the trade between the two countries.

The ICCI President Muhammad Ijaz Abbasi, in a meeting with a two-member official delegation of the embassy of the Republic of China, including Zhou Zhencheng Consellor Economic and Commercial and Liu Guotao Second Secretary during a meeting at ICCI said that the trade and economic relations of Pakistan and China were growing fast. Zhou Zhencheng said that bilateral trade between the two countries had crossed $6 billion showing 25 percent increase in the last year’s trade volume. He said that the balance of trade is presently in favaour of China and there is a need to further balance it. He said that Chinese business delegations regularly visit Pakistan for meetings with their Pakistani counterparts for import of various products from Pakistan. He said that Pakistan exports many products including minerals and fiber products to China.

He said that a large number of Chinese companies are working in Pakistan and more companies are interested to invest in Pakistan. He informed that 60 Chinese companies have permanent offices in Pakistan and recently China Mobile Pakistan has taken over Paktel, making a large investment in the telecom field. He said that through an agreement with Pakistan, Chinese investors would be encouraged to investment in the economic zone at Lahore.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Bush waives law to give millions to Pak anti-terror fight​

WASHINGTON: US President George Bush granted another waiver to Pakistan, which will enable the continuance of US assistance to the country that would otherwise have been blocked because of a US law that forbids aid to countries where the government has changed through a coup d’etat, which happened in Pakistan in 1999.

The president has been according the waiver to Pakistan since Islamabad agreed to join the US-led war against terrorism. Pakistan will not need a waiver next year as it has an elected government now. A review is already underway. The presidential waiver of Section 608 of the relevant law “would facilitate the transition to democratic rule in Pakistan; and is important to US efforts to respond to, deter, or prevent acts of international terrorism,” according to the presidential directive to the State Department.

The president authorised the secretary of State to transmit the determination to Congress, as required under law. Pakistan is due to receive $478 million in security-related assistance in financial year 2008 and $467 million in economic-related assistance, or a total of $945 million. Earlier, White House spokeswoman Dana Perino said the US hoped for good co-operation with the new government in the fight against extremism. khalid hasan

Daily Times - Leading News Resource of Pakistan

 

[Neo]

40 percent rise in services trade deficit ​

KARACHI (March 27 2008): Services trade deficit widened by 40 percent to new high level of $4.224 billion during the eight months of the current fiscal year, breaching all previous records. This was mainly due to higher payments on transportation, travels, financial, computers services and royalties.

According to State Bank statistics on Wednesday, Pakistan received $2.123 billion on account of services export against payments of $6.347 billion on the account of services imports during the July-February period of current fiscal year, depicting a deficit of $4.224 billion.

This year's services sector deficit is higher than last fiscal year's, which stood at $4.125 billion. The deficit is also widened by 40 percent over the same period of last fiscal year, as during July-February 2007 the country faced a deficit of $3 billion with $5.54 billion exports and $2.53 billion imports. Services sector exports during the period declined by 16 percent, while imports went up by 14 percent.

Major contribution in services trade deficit witnessed by transportation services, travel services, and royalties, as only transportation sector contributed around 50 percent share in services sector deficit. However, services sector trade deficit during February depicted a decline of 32 percent over February 2007. During February 2008 deficit stood at 256.809 million dollars as compared to 375.054 millions dollar of February 2007.

The services sector exports February this fiscal year stood at 508 million dollars over the exports of 254 million dollars in February 2007. Big deficit has faced in transportation sector, whose exports stood at 729.620 million dollars against imports of 2.333 billion dollars, depicting a deficit of 1.60 billion dollars in eight months.

Travel was the second sector which registered about $1 billion deficit, as travel exports stood at 177.994 million dollars against imports of 1.049 billion dollars, showing a deficit of 871 million dollars. Insurance service exports stood at 22.5 million dollars against imports of 111 million dollars. Financial services payments stood at 110 million dollars against receipts of 29 million dollars.

The country earned 35.23 million dollars on the account of royalties and licences fee against payments of some 84 million dollars. It may be mentioned here that during the last fiscal year country had faced a deficit of 4.125 billion dollars in service trade with exports of $4.125 billion and imports of $8.250 billion.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Bush waives law to give millions to Pak anti-terror fight​

WASHINGTON: US President George Bush granted another waiver to Pakistan, which will enable the continuance of US assistance to the country that would otherwise have been blocked because of a US law that forbids aid to countries where the government has changed through a coup d’etat, which happened in Pakistan in 1999.

The president has been according the waiver to Pakistan since Islamabad agreed to join the US-led war against terrorism. Pakistan will not need a waiver next year as it has an elected government now. A review is already underway. The presidential waiver of Section 608 of the relevant law “would facilitate the transition to democratic rule in Pakistan; and is important to US efforts to respond to, deter, or prevent acts of international terrorism,” according to the presidential directive to the State Department.

The president authorised the secretary of State to transmit the determination to Congress, as required under law. Pakistan is due to receive $478 million in security-related assistance in financial year 2008 and $467 million in economic-related assistance, or a total of $945 million. Earlier, White House spokeswoman Dana Perino said the US hoped for good co-operation with the new government in the fight against extremism. khalid hasan

Daily Times - Leading News Resource of Pakistan

Anti-terror fight: Bush clears way for giving $300 million to Pakistan ​

WASHINGTON (March 27 2008): President George W Bush has cleared the way for giving millions of dollars to Pakistan to fight terrorism this year, the White House said on Tuesday as a new government took power in Islamabad.

'We are currently assessing the impact of those elections on future requirements for waivers of coup-related sanctions'In a memo to the secretary of state dated Monday, Bush used his authority to exempt Pakistan from a law that restricts funding countries where the legitimate head of state was deposed by a military coup, as in Pakistan.

The waiver, which Bush has approved every year since 2003, opens the way for the United States to provide about 300 million dollars this year to key "war on terror" ally Pakistan to boost its counter-terrorism operations. White House spokesman Gordon Johndroe said the Bush administration still had concerns about the human rights situation in Pakistan, where President Pervez Musharraf took power in 1999, but stressed its major strategic role.

"Pakistan is a key ally in the 'war on terror.' Johndroe stressed that "we continue to have concerns about respect for fundamental civil and political rights in Pakistan," citing last November's state of emergency and the suspension of the constitution.

But he said Musharraf had "kept his commitments" to retire from the military and be sworn in as a civilian president, and to lift the state of emergency. He also noted that multi-party elections had successfully been held. "We are currently assessing the impact of those elections on future requirements for waivers of coup-related sanctions," Johndroe added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

UAE sets $100 billion investment target ​

ISLAMABAD (March 27 2008): The UAE envoy in Islamabad Ali Mohammed Al-Shamsi said on Wednesday that the Emirates has set the target of $100 billion investment in Pakistan. He, in a statement, said that his country wants stability and progress in Pakistan and assures its full co-operation for building strong economic and trade partnership for the mutual benefit of both the countries.

The envoy said that Pakistan's promising market and its potentials under conducive environment would encourage the UAE companies both public and private for investment target of $100 billion in Pakistan. The UAE investment, at present, stands at $20 billion with assets and projects for Karachi to the tune of $50 billion.

"This is a clear message which indicates the determination and will of the UAE to build a unique economic partnership between the two brotherly countries," said Al-Shamsi, in a statement.

He said the leaders of the United Arab Emirates have expressed their desire to upscale the political and economic relations to the highest level while extending their congratulations to Syed Yousef Raza Gillani on his election as prime minister wishing him success in his new assignment.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Foreign portfolio investment stood at $4.4 billion on Tuesday ​

ISLAMABAD (March 27 2008): Total investment in the local stock market by foreign portfolio investors as on March 25, 2008 was $4.4 billion, based on closing rates. This excludes physical shares of PTCL held against GDRs issued by the Company.

According to the data released by the Securities and Exchange Commission of Pakistan (SECP) on Wednesday, the Commission took initiative of disseminating daily net inflow/outflow of foreign investment based on actual trading by foreigners in the market. This was done to provide market participants and general investors with timely and relevant information regarding foreign portfolio investment. To further refine the process and add value to the information provided, cumulative trading activities of foreign investors since February 1, 2008 are being provided by the SECP.

Trading activities of foreign investors on March 25 showed that gross buying of $21,651,575 was made; gross selling of $14,409,990 and net buying/selling by foreign investors was $7,241,585.

The cumulative trading activities of foreign investors from March 1 to 25 showed that gross buying was of $267,446,119; gross selling of $428,036,722 and net buying and selling was $160,590,603.

The cumulative trading activities of foreign investors for the month of February 2008 showed that gross buying was $524,350,293; gross selling $383,763,575 and net buying and selling of $140,586,718 was observed during the period under review.

The SECP has specified that all rupee values have been converted into dollar using conversion rate of $Rs 62.50. The Commission has advised the general public to visit website of National Clearing Company of Pakistan Limited www.nccpl.com.pk for details concerning trading activities of foreign investors on daily basis.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Foreign portfolio investment stood at $4.4 billion on Tuesday ​

ISLAMABAD (March 27 2008): Total investment in the local stock market by foreign portfolio investors as on March 25, 2008 was $4.4 billion, based on closing rates. This excludes physical shares of PTCL held against GDRs issued by the Company.

According to the data released by the Securities and Exchange Commission of Pakistan (SECP) on Wednesday, the Commission took initiative of disseminating daily net inflow/outflow of foreign investment based on actual trading by foreigners in the market. This was done to provide market participants and general investors with timely and relevant information regarding foreign portfolio investment. To further refine the process and add value to the information provided, cumulative trading activities of foreign investors since February 1, 2008 are being provided by the SECP.

Trading activities of foreign investors on March 25 showed that gross buying of $21,651,575 was made; gross selling of $14,409,990 and net buying/selling by foreign investors was $7,241,585.

The cumulative trading activities of foreign investors from March 1 to 25 showed that gross buying was of $267,446,119; gross selling of $428,036,722 and net buying and selling was $160,590,603.

The cumulative trading activities of foreign investors for the month of February 2008 showed that gross buying was $524,350,293; gross selling $383,763,575 and net buying and selling of $140,586,718 was observed during the period under review.

The SECP has specified that all rupee values have been converted into dollar using conversion rate of $Rs 62.50. The Commission has advised the general public to visit website of National Clearing Company of Pakistan Limited National Clearing Company of Pakistan Limited for details concerning trading activities of foreign investors on daily basis.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Rs one billion spent on industrial infrastructure uplift in Landhi: Kamal ​

KARACHI (March 27 2008): Nazim Karachi, Syed Mustafa Kamal Wednesday said that City Government has implemented development works costing Rs one billion in the Landhi Industrial area. He said in the area, which lacked the sewerage system altogether, the grant of sewerage connections to all the factories will start during the next 15 days.

He stated this while addressing a joint meeting of the officials of Landhi Association of Trade and Industry and city government at Chairman office in KWSB. The meeting was attended by DCO Javed Hanif, MD KWSB Ghulam Arif Khan, EDO Works and Services Nisar Sariyo, Chairman Landhi Association of Trade and Industry and other officials.

In the meeting the water and sewerage works carried out in Landhi Industrial area during the last 2 years were reviewed while for the left over schemes, it was decided to speed up the work and complete them by April.

The meeting was informed that since the establishment of Landhi Industrial area, sewerage system was not completely laid while non-availability of water was another factor and the area had been the victim of problems because of battered roads badly affecting industrial production.

The city government has almost completed the laying of sewerage system at a cost of Rs 300 million. However, a 1.5 km line could not be laid because of gas line, which unless shifted, difficulty will be faced in the laying of sewerage line.

On the other hand, internal water and sewerage works have been completed at a cost of Rs 160 million while works and services schemes are in progress at a cost of Rs 465 million.

It was pointed out that work on repair of General Tyre road, Quaidabad bridge and construction of Hospital Chowrangi to National Highway road and internal roads was in progress and completed soon while plan was afoot for construction of Mehran highway at a cost of Rs 273 million.

On the occasion Nazim Karachi directed that gas authorities be immediately contacted for speedy completion of sewerage system and if the gas line cannot be shifted because of technical reason, work on alternative path be started from tomorrow and completed by the middle of April so that work on grant of connections to factories could start.

Mustafa Kamal said that city government itself started work on infrastructure development without any demand because in the past the industrialists made all efforts in this regard but in vain and they gave up making demands.

These areas will now modernise and beautify and its basic problems solved. Nazim Karachi said that pipes were imported for laying the infrastructure in all the four industrial areas, and, therefore, the water and sewerage systems laid here would last for 100 years.

On the occasion Zahid Bashir, Chairman Landhi Association of Trade and Industry and other office-bearers thanked Nazim Karachi and said the works carried out by city government during the last 2 years were beyond the imagination of industrialists and businessmen and today 90 percent problems of the industrial stood solved.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan must act to avert economic crisis - W.Bank​

ISLAMABAD, March 27 - Pakistan must make rapid adjustments and reforms to avert an economic crisis as it suffers the impact of high international prices for petroleum and food such as wheat, the World Bank said on Thursday.

Pakistan was likely to miss this year's targets for its fiscal deficit, inflation, current account deficit and foreign exchange reserves, the bank said.

"There is not yet a crisis, but the economic picture for Pakistan is not good," said World Bank Vice President Praful Patel at the end of a three-day visit.

The news comes as a new coalition government is set to take power.

Patel said Pakistan had seen robust economic growth over the past few years and foreign direct investment and remittances had maintained pace and the stock market had posted gains.

But growth could be maintained only if the country adjusted to the new global reality, which included high prices for oil and food such as wheat.

"Any adjustment will be painful ... there must be an appropriate safety net for the poor," Patel said in a statement.

Patel held talks with leaders of the new government and its economic advisers and said they had asked for World Bank support.

Analysts say widening fiscal and current account deficits and rising inflation are the major economic problems facing the new government.

Standard & Poor's Ratings Services said on Tuesday it was maintaining its negative outlook on Pakistan, and warned that despite a more positive political outlook, Pakistan's ratings could be lowered if the new rulers proved too distracted to deal with problems.

Pakistan's current account deficit widened to $8.421 billion in the first eight months of the 2007/08 fiscal year to June, compared with $5.857 billion in the same period last year.

The fiscal deficit for the first half of the financial year, to the end of December, was 3.6 percent of gross domestic product compared with 1.9 percent in the same period the previous year.

The consumer price index, a key indicator of inflation, rose 11.25 percent in February from a year ago.

"Pakistan will need the international community's support over the coming months," Patel said.

"If action is not taken, the economy will start to falter but with the right policies and strong support from multilateral and bilateral partners, we believe the high growth and poverty reduction path can be maintained."

Despite the looming problems, Pakistan's main stocks index, one of the best performing in Asia last year, has gained 8.5 percent since the beginning of the year and 6.4 percent since a Feb. 18 general election.

Pakistan must act to avert economic crisis - W.Bank - Yahoo! Singapore News

 

[Neo]

UN report says Pakistan's economic growth to remain at 6.5 percent ​

Islamabad, March 27, IRNA

Pakistan's economy is expected to remain strong growing at 6.5 percent supported by all sectors during the current year despite many challenges, according to a UN report released on Thursday.

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its Economic and Social survey appreciated Pakistan's macroeconomic policies of the last few years saying these helped increase the inflow of domestic and foreign investments and sustain a strong economic growth.

The survey says that sound policies have transformed Pakistan's consumption led growth impetus to the one in which investment led growth can assume a more important role.

It says Pakistan's economy remained strong during the last six years.

The agriculture sector grew by five percent during the last year while the manufacturing sector's growth continued at 8.4 percent.

It further says that record inflow of foreign direct investment amounting to 8.4 billion dollars last year also boosted performance of the economy.

It says that a credible debt reduction strategy and fast economic growth drastically cut the public debt burden, besides the country successfully reduced its external debt burden, through rescheduling, debt cancellation and prepayment of expensive debt.

Referring to the higher inflation level in the country, the survey says global increases in some commodity prices, higher utility tariffs and some other factors fuelled the inflation level in Pakistan.

However, the government made efforts to stem price rises through extension of public sector utility store network and extending subsidies on essential edibles.

The survey also highlights the government's expansionary fiscal stance to promote investment for growth and increase pro poor spending.

It also recognizes that development expenditure has increased in recent years.

However it expressed concern over sharp slowing in the growth of Pakistan's exports and imports during the last year.

The ESCAP survey predicts that like many other South Asian Countries, the current account deficit is to remain an issue for Pakistan due to higher oil prices and the impact on the garment and textiles trade.

The report suggests export diversification besides reducing the risk of depending too much on a single sector to meet the challenge.

UN report says Pakistan's economic growth to remain at 6.5 percent - Irna

 

[Neo]

Pakistan envoy supports U.S. economic initiative​

By Haley Edwards
Seattle Times staff reporter

Pakistan's ambassador to the U.S. on Wednesday endorsed U.S. Sen. Maria Cantwell's proposal to jump-start the economy in the war-ravaged border region between Pakistan and Afghanistan.

Ambassador Mahmud Ali Durrani, speaking at a news conference in Seattle, called the bill sponsored by Cantwell "an effective weapon against extremism and poverty."

The bill, which Cantwell and four other senators introduced earlier this month, proposes to create special zones where Pakistani and Afghan citizens could trade certain products — such as textiles, gemstones and handicrafts — duty-free with the U.S.

These Reconstruction Opportunity Zones, or ROZs, would provide a chance for people in the region, most of whom are impoverished tribal members, to start their own businesses and begin to make money, Cantwell said.

"The idea is increase entrepreneurial opportunities so [local people] don't have to turn to illegal activities to put food on the table," she said.

The border region between Afghanistan and Pakistan has been a hotbed of Taliban violence and recruitment since the war in Afghanistan began in 2001. It also is a thoroughfare for illegal drug trafficking between the two countries.

Sens. Orrin Hatch, R-Utah; Kit Bond, R-Mo.; Joe Lieberman, I-Conn.; and Chuck Hagel, R-Neb., have signed on to the bill. Leaders from the Washington Council on International Trade and the Initiative for Global Development also announced their support on Wednesday.

Both Cantwell, a Democrat from Washington, and Durrani stressed that economic development must come hand-in-hand with improved security and infrastructure in the region.

Durrani called the ROZ bill a "key first step."

"You can't wait for stability to begin development. Neither one comes first. It's a chicken-and-egg thing," Durrani said. "Even when there are security challenges, you have to invest in infrastructure and job development."

The entire nation of Afghanistan and certain parts of Pakistan's border region would be eligible for ROZ designation if the bill passes. Each region would have to demonstrate efforts to establish a market-based economy, eliminate poverty and increase the availability of schools and hospitals, among other criteria, in order to qualify.

The Afghan ambassador to the U.S., Said T. Jawad, expressed "full support" of the bill in a statement issued earlier this month.


Durrani dismissed suggestions that Yousaf Raza Gilani, who was sworn in as prime minister of Pakistan on Tuesday, would be less committed to the plan than his predecessor. Gilani is considered less accommodating of American interests than the current president, Pervez Musharraf.

"Musharraf is still the president. Gilani is a good leader with a lot of experience," Durrani said.

"Americans care too much about the personality of leaders. Personality doesn't matter. What matters is that Pakistan and the U.S. are friends, and this would be good for both countries."

The ROZ bill is loosely modeled after the existing Qualified Industrial Zones plan that was established in Jordan in 1996 and in Egypt in 2004. Cantwell called both programs a "success."

Cantwell said she hopes Congress will approve the bill quickly and have it "waiting on the president's desk by the end of the year."

Nation & World | Pakistan envoy supports U.S. economic initiative | Seattle Times Newspaper