Pakistan Economy - News & Updates - Archive

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94pc urban poor don’t keep savings in banks: study ​

Study funded by the United States Agency for International Development says that they keep savings either at home or in committees

Saturday, March 29, 2008

ISLAMABAD: A new microfinance research study released on Friday stated that poor people generally saved through keeping cash at home and in ‘committees’, generically known as Rotating Credit and Savings Associations.

About 94 per cent of the poor interviewed in the report entitled ‘Mobilising Savings from the Urban Poor in Pakistan: An Initial Enquiry,’ said they saved money either in cash or committees or both of these forms, but rarely in formal financial institutions including banks.

The research was conducted by ShoreBank International, a consultancy firm working with financial institutions in more than 40 countries across the globe to create access to financial services for low-income population, not served by traditional financial institutions.

The study was funded by the United States Agency for International Development (USAID) under a US$5 million project recently completed by SBI. Authored by Hussan Bano Burki and Shama Mohammed, the report aims at understanding the saving behaviour, preferences and attitudes of low-income potential savers in Pakistan and draw implications for commercial and microfinance banks regarding the design, marketing and delivery of saving products that appeal to the low-income savers, and at the same time are viable for the financial institutions to offer.

The study observed that in general, the low-income savers use multiple means of saving such as cash, prize bonds, gold and land to cater for both, predictable events requiring a large sum of cash in the future and for emergencies in the short and medium term such as illnesses. Savings through committees were also seen to range from Rs2 per week to Rs15, 000 per month by a low-income saver.

The report observes that while microfinance institutions in Pakistan have provided credit to those individuals who had no prior formal access, yet they lag behind considerably in providing access to saving opportunities to the low income population that may want to save, but do not have the access to opportunities for saving with a formal institution.

With only 7,494 branches of licensed banks operating to mobilise and intermediate deposits from the public, the infrastructural access for formal savings in Pakistan remained as low as 4.8 branches per 100,000 people in June 2006 against 6.3 in India and 8.6 in Indonesia (2004 figure), says the report’s author Hussan Bano Burki.

The 38-page study provides banks interested in tapping the savings of the poor profitably, the parameters and general guidelines regarding saving product type, marketing strategy and distribution channel options that they should consider to offer for market responsive and viable saving services to the poor.

The authors suggest that the key for banks to mobilise savings from the urban poor, may be in offering saving products that replicate those features of informal saving methods that are popular amongst them and improve upon the disadvantages of these informal saving mechanisms.

The report postulates that given the right terms and conditions of a saving product for the poor, a well thought out marketing strategy will be essential for banks to successfully mobilise savings from the low income people.

The study urges banks to introduce simple processes to open a savings account and to make transactions. Many people cited the long and complicated processes and requirements for opening bank accounts as a reason for not saving with them.

The report advised that banks which want to mobilise savings of the poor, to re-orient their staff towards servicing the low income segment. United States Agency for International Development (USAID) report points out that a number of participants in the study cited attitude of the bank staff as “disrespectful and unhelpful.”

As the microfinance sector’s active borrowers are estimated to more than double by 2010, this sector must begin to prepare to turn to savings as an alternative source of funds for growth, and should begin the groundwork right now, the report concluded.

94pc urban poor don’t keep savings in banks: study

 

[Neo]

Pakistan may face burden of external debt-servicing​

ISLAMABAD, March 27: Pakistan is likely to face a higher external debt-servicing burden as repayments of rescheduled non-ODA Paris Club stock resume in 2008 and some foreign currency bonds mature.

A sustained high current account deficit could also hurt the external debt-to-GDP ratio, which may start rising in the medium term, according to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) report released here on Thursday.

In Pakistan, debt growth during the 1990s was unprecedented.

A credible debt reduction strategy and fast growth cut the public debt burden from 84 per cent of the GDP in 2000 to 57pc in 2006.

Pakistan reduced its external debt burden through rescheduling, a debt swap for social spending, debt cancellation and prepayment of expensive debt.

The debt service ratio has substantially declined in Pakistan over 2000-2006, though about 30 per cent of government revenues remain allocated to debt-servicing.

The report says if Pakistan follows its historical growth path, its debt-to-GDP ratio will continue to decline over the next five years. But an upsurge in the primary deficit would slow the reduction.

Because of a growing budget deficit, improvement in the ratio of domestic public debt-to-GDP since 2001 appears to have bottomed out.

In Pakistan, the share of the banking sector in domestic public debt is rising, and commercial banks are becoming major players. In the year 2007, the share of commercial banks reached 65 per cent, compared with 35 per cent for the central bank.

About the over-all economic performance of Pakistan, the report says the economy of Pakistan maintained its growth momentum in 2007, growing by seven per cent, slightly more than the 6.6 per cent for 2006.

Agricultural sector growth recovered sharply, from 1.6 per cent in 2006 to five per cent in 2007.

Manufacturing sector growth continued at 8.4 per cent in 2007, slightly more moderate than the 10 per cent for 2006.

Services grew at eight per cent in 2007, down from 9.6pc in 2006.

Exports were sluggish in 2007; economic growth was driven mainly by strong domestic demand. Investment overtook consumption, helped by a surge in domestic private investment and record FDI flows. In 2007, investment in real terms increased by more than 20 per cent.

Pakistan increased its development expenditure from about two per cent of the GDP in 2001 to about five per cent of the GDP in recent years, mainly after the government reduced its debt burden, partly due to external debt relief.

A further 20 per cent decrease in the debt service ratio could increase development spending by 24 per cent.

In India, the tax-to-GDP ratio of the central government hovers around 10pc. In Bangladesh, Nepal and Pakistan, tax-to-GDP ratios are also low, ranging from nine to 11 per cent without much improvement over time.

Inflation in the developing countries of Asia and the Pacific rose from a low of three per cent a year in the 60s to more than 10 per cent in the 70s and 12 per cent in the 80s and 90s. Rates have since come down to about six per cent, they remain high in Pakistan, Sri Lanka, the Lao People’s Democratic Republic, Samoa and Tonga.

The region’s five largest recipients of remittances in 2007 were India, China, the Philippines, Bangladesh and Pakistan, with remittances totalling $82bn in 2007.

South Asia’s strong aggregate economic growth rate of 7.4 per cent for 2007 was spearheaded by India, which grew by nine per cent and appears to be moving on to a new, high-growth phase as rates of investment in the economy rise sharply.

Bangladesh, Pakistan and Sri Lanka continued their growth momentum and grew by more than 6.5 per cent for the year.

North and Central Asia will continue to benefit from consumption and construction, thanks to high energy prices. South and South-West Asia, with traditionally domestic-demand-driven economies, will benefit from strong private consumption and investment and from expansionary fiscal policy in some countries.

Pakistan may face burden of external debt-servicing -DAWN - Business; March 28, 2008

 

[Neo]

Two ADB, IFAD-funded projects in progress in Fata ​

PESHAWAR (March 29 2008): Two development projects worth Rs 4.698 billion are under implementation in the Federally Administered Tribal Areas (Fata) to raise the living standard of the people of target areas and ensure sustainable socio-economic development. These projects are being executed with the active support and participation of the Asian Development Bank and IFAD.

This was told during a presentation to NWFP Governor Owais Ahmed Ghani on the Fata Rural Development Project and South Fata Development Project, held at the Governor's House here on Friday.

Additional Chief Secretary, Fata, Habibullah Khan, besides Fata Finance Secretary, Directors of Fata line departments and officials of both the projects attended the presentation. The Fata rural development project, it was stated, was for three agencies of Bajaur, Mohmand and Khyber, aiming at poverty alleviation through assisting the communities.

Business Recorder [Pakistan's First Financial Daily]

 

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Country facing 3000-megawatts shortage: Mepco ​

MUZAFFARGARH (March 29 2008): The country is facing power shortage of 3000 mega watts, said an official of the Multan Electric Power Company (Mepco) on Friday. Executive engineer of the Mepco, Wazir Ahmed Sheikh, told APP that the country's requirement is 21,500 mega watts while the production at the moment is 19,500 mega watts.

The production is contributed as under: Hydel power from dams 6450 mega watts, thermal power plants 3900 mega watts, private power plants 5700 mega watts and KESC 2000 mega watts. The Mepco official hoped that more hydel power would be generated by existing plants with increased water levels in the rivers as temperature rises. He said that the shortfall has compelled the Mepco to resort to load shedding.

Business Recorder [Pakistan's First Financial Daily]

 

[opinion786]

MEPCO mentions above: Hydel 6450 MW + Thermal 3900 MW + Private 5700 MW + KESC 2000 MW = 18,050 MW.

But MEPCO wrote our production capacity at moment is = 19,500 MW.

Have they missed the 1450 MW Ghazi brotha Hydel Power project of 2004, in these above mentioned? Becuz they're falling short of 1450 MW in their calculations?

We have managed to increase around 5000 MW in last 8 years, keeping in mind that our requirement went up by 70% in the last 10 years!

As, in 1999 our installed capacity was merely 15,860 MW. (With Hydel 4826 + Thermal 10,897 + Nuclear 137)

 

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Tajikistan to sell cheap power to Pakistan ​

Sunday, March 30, 2008

LAHORE: Tajik Ambassador Said Saidbaig has stated that Tajikistan is constructing a high-power transmission line from Tajikistan to Afghanistan and Pakistan.

He also said that a consortium of Russia, Iran, Kazakhstan, Ukraine and Qatar is executing the construction of two huge hydropower stations.

He was speaking at the inaugural session of a seminar on National Trade Corridor, jointly organised by Lahore Chamber of Commerce and Industry (LCCI) and the Chartered Institute of Logistics and Transport (CILT) at the LCCI on Saturday.

He added that after the completion of these projects in two years, Tajikistan would be able to export cheap electricity to Pakistan and Iran.

The ambassador also said that the construction process of an international road from Tajik capital, Dushanbe to Kyrgyzstan, Uzbekistan and China is well under way. This will give an opportunity to Tajikistan to enter Pakistan and reach the Gwadar Port.

National Highway Authority (NHA) chief said that Gawadar Port is going to play a big role in National Trade Corridor Programme, because by implementing it in true letter and spirit, we would become part of the international community.

However, he stressed upon technical training to keep abreast with development taking place across the globe.

Speaking on the occasion, LCCI President Mohammad Ali Mian said that with the implementation of National Trade Corridor program declaring Karachi Port as the mother port for Afghanistan, Central Asian Republic and Western China, economic activities in the region will boost considerably.

He said that the key objective of the National Trade Corridor Programme is to reduce share of domestic transport and cost of non-service factors in the total value of commodities, along with the overall reduction in transport and transit costs for goods. It would also help enhance Railways share of long distance traffic of freight, reduce the operating deficit of railways and improve safety of transport and procurement operations.

Tajikistan to sell cheap power to Pakistan

 

[Neo]

Foreign-funded projects cost more: Hameed ​

Sunday, March 30, 2008

LAHORE: Foreign-funded projects in Pakistan tend to take more time and funds than similar projects completed through local resources. The reason for this is skewed perception of the integrity of Pakistanis.

Former federal minister for water and power Tariq Hameed stated this while speaking at a symposium on ‘Procurement and Contract Management’ organised by Pakistan Engineering Council.

He said the projects funded by foreign donors required evaluation at each stage by a local consultant which was then sent to a foreign consultant hired by the donors who would reevaluate it and give final approval at each stage of the project. “This is time-consuming and involves dual payment for the same job,” he said, adding the perception about the integrity of Pakistani engineers was not correct.

Citing a recent example, he said the National Transmission and Dispatch Company of WAPDA initiated two similar projects at Sahiwal and Ghakkar. The loan for the Sahiwal project was arranged locally while the Ghakkar project was funded by a foreign agency.

He said the Sahiwal project was completed in November 2006 at lower than projected cost, while the Ghakkar project was expected to be functional in November 2008 at a much higher cost.

Hameed said current procurement rules that forbade further negotiations with the lowest bidder needed to be changed as the national exchequer had suffered heavy losses due to those rules. In many instances, he added, the lowest bidder quoted inflated rates that could be brought down to reasonable levels through negotiations.

He said from his experience in the Water and Power Development Authority he found that implementation of thermal power projects remained in line with feasibility reports. However, in case of water projects many crucial facts were ignored in haste that resulted in higher costs and prolonged litigations.

“It is better to delay the feasibility for six months instead of facing litigation and inflated costs five years later,” he suggested.

Pakistan Engineering Council President Engineer Husnain Ahmad said Pakistan followed internationally-accepted procedures and conditions for the award of contract. He said these conditions were generally well-balanced and great care was needed while amending them to incorporate specific needs of the contract. Otherwise, he cautioned, the cost would be unavoidable.

Foreign-funded projects cost more: Hameed

 

[Neo]

Govt plans to adopt Brazilian cotton production model​

* 10.77 percent cotton crop shortfall 2007-08​

ISLAMABAD: The government is planning to adopt Brazilian cotton production model for achieving the 2008-09 propose cotton production target of 14.11 million bales over the area of 3.2 million hectares in the coming Kharif season.

Provincial wise expected cotton targets would be, Punjab 11 million bales, Sindh 0.63 million bales, NWFP 0.01 million bales and Balochistan 0.10 million bales.

Last year 2007-08 the cotton production target was fixed as 14.14 million bales that was revised twice and now is expected at 11.6 million bales. Main reasons of lower cotton production were floods, rains, mealy bug attack, Cotton Leaf Curl Virus (CLCV) and use of sub standard quality of seeds, officials in the Ministry of Food, Agriculture and Livestock told Daily Times here on Saturday.

According to the Pakistan Cotton Ginners Association current report, cotton arrivals into Ginneries as on 1 February were equivalent to 10.644 million bales as against 11.928 million bales recorded on the same date last year, thus showing a shortfall of 10.77 percent. However, the officials said cotton was still arriving into the ginneries and the final cotton arrival position would be available in April 2008.

According to the feedback received from the spinners and raw cotton exporters, the officials said there was growing concern about the quality of cotton, they maintained. Cotton prices this season in the country was observed significantly higher than last year. The seed cotton prices during the season so far have average at Rs 1453 per 40 kg as against last year’s average price of Rs 1164 per 40 kg.

About the propose cotton target of 14.1 million bales for the year 2008-09, the officials said collaborated approach needs to be pursued including improving the cotton production and its quality in the country. In this regard, a reference to the Brazilian cotton production model for learning lessons from their experiences may not be out of context. Officials said the cotton sector of Brazil has transformed itself and recovered its market position, turning the country from net importer into one of the world’s largest cotton exporters in a relatively short period of time.

According to the officials, the government has to spent more money over research and development of cotton keeping in view the Brazil as a model for improving cotton production. The present level of national average yield (719 kg as compared to 1334 kg/ha in Brazil) may however, be improved significantly by providing certified seeds of approved varieties and balance use of fertilizers (subsidy on phosphate and potash fertilizers may continue for few years so that the farmers use it).

For attaining the propose cotton target for year 2008-09, the government proposes to increase area under cultivation in NWFP and Balochistan. The government has established a proposed action plan for increasing cotton production. According to the plan, the officials said cotton area is to be increased at least to 3.20 million hectares. Others factors of the new cotton strategy include, arrangement to be made for availability of 63,000 metric tonnes of certified seeds of approved cotton varieties. Late sowing to be discouraged. Plant population to be increased to 18,000 to 20,000 plants per acre through higher seed rate and timely re-sowing, if so needed. Subsidies on phosphate and potash fertilizers to continue for encouraging the balanced use of fertilizers. Growers to be encouraged to also add micronutrients to the soil for retention of larger number of flowers and bolls. The strategy was to ensure the availability of adequate and insect specific pesticides through out the crop growth and development period, particularly for mealy bug and white fly.

About world cotton situation, the officials said, at international level production was estimated at 118.8 million bales in 2007-08, 3 percent lower than during the previous season due to decline in world area by 1.2 million hectares to 33.6 million hectares. In 2007-08, cotton production is estimated to decline in the USA by 12 percent, China by 3 percent, Pakistan by 11 percent, Turkey by 12 percent. However, production in 2007-08 estimated to increase in India to a record level by 11 percent and Brazil by 5 percent, the official maintained.

Daily Times - Leading News Resource of Pakistan

 

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Economy needs hard decisions, says Dar: Consultations started for new policy​

ISLAMABAD, March 29: It is because of the wrong policies of the previous government that several major budgetary targets will remain unmet during the current financial year, says Ishaq Dar who is likely to be inducted into the cabinet as a finance minister soon.

“The budget for 2007-08 warrants special measures and a new strategy to remove various economic distortions that were created by former rulers,” he said here on Saturday.

He said he had earlier chaired a special meeting held on the orders of the prime minister to evaluate the state of the economy and propose short- and long-term measures to rebuild it.

He said the trade deficit had increased to more than $12.5 billion in the first eight months of the financial year. Similarly, he said, the fiscal deficit target that was set at four per cent of the GDP could not be met. Food inflation, he said, had increased continuously and needed to be brought down immediately.

Mr Dar said the incoming government would be inheriting a ruined economy and it would take time to set things right.

He said that he had informed the prime minister about various measures needed to be taken urgently for improving the state of the economy.

“I have started consulting the officials concerned to firm up a new economic policy to be pursued by the new government during the next five years,” Mr Dar remarked. Mr Dar said that one of the toughest challenges the new government faced pertained to the hardships of the common man. “I am glad that the prime minister has announced a relief package for farmers and the poor on my recommendations.”

He said it would not be an easy task for the new government to deliver under the circumstances obtaining in the country. However, he said, he would seek the support of all major political parties so that the government might come up to the expectations of the people.

Mr Dar said that with the announcement of the reforms package by the premier on Saturday, it was now vital for the government to implement the same in both letter and spirit.

He said that the new government would have to carve out its policies in a very sensible way. “But we need to look after our people immediately and we would provide them certain relief,” he said.

Economy needs hard decisions, says Dar: Consultations started for new policy -DAWN - Top Stories; March 30, 2008

 

[Neo]

Punjab consumes 84pc of farm credit​

KARACHI, March 29: The Punjab has emerged as the main beneficiary of agricultural loans as the province consumed 84 per cent of entire loans disbursed by the banks during July-Dec 2007-08

According to the State Bank’s fresh data on agricultural loans, rest of the 16 per cent was consumed by Sindh, the NWFP, Balochistan, Azad Kashmir and Northern Areas.

The SBP released this kind of data for the first time.

The new study of the State Bank has been conducted to give a real picture of the agricultural loan distribution to policy makers. It carried out this study to collect data of district-wise disbursement of loans.

In the first six months of the current fiscal year, banks disbursed Rs90.3 billion to agricultural sector, while Punjab consumed Rs75.6 billion out of this total amount, which makes it 83.7 per cent.

Sindh, being the second largest province got Rs10.2 billion for agriculture sector during the period under review. The situation is pathetic for other provinces as Balochistan looks completely neglected part of the country as far as the agriculture loan is concerned.

During this stated period Balochistan received just Rs200 million, which was even less than AJK which received Rs400m.

The NWFP received only Rs3.9 billion for agricultural sector. This distribution trend shows that either the banks are not interested in areas other than Punjab, or the representatives from the respective provinces never bothered to take care of their agricultural sector. All provinces had their own governments for five years while they also had representations in the lower and upper houses including ministries in the last assembly.

The study showed that almost all districts of Punjab were active participants and all of them received agricultural loans.

The district-wise data reveals that banks disbursed agricultural loans in all 36 districts of Punjab and 23 districts of Sindh whereas the disbursement in NWFP, Balochistan and AJK, NAs and Fata restricted to 20, 22 and 7 districts, out of total districts of 24, 30 and 21, respectively.

The average disbursement per district stood at Rs2.1 billion in Punjab, Rs400 million in Sindh, Rs160 million in the NWFP and only Rs7 million and Rs29 million in Balochistan and AJK, respectively.

The district-wise average disbursement of credit shows the gap is too wide while comparing it with Punjab

Major recipients of agricultural loans were Lahore, Rawalpindi, Sheikhupura, Kasur, Multan, Muzaffargarh, Bahawalpur, Bahawalnagar, Sialkot, Khanewal, and Mianwali in Punjab; Hyderabad, Khairpur, Karachi, Sukkur, Sanghar, Ghotki and Nawabshah in Sindh; Mardan, Charsadda, D.I. Khan, Swabi, Swat, Nowshera and Mansehra in the NWFP; Quetta, Nasirabad and Jaffarabad in Balochistan; Muzaffarabad, Kotli and Bagh in AJK; and Gilgit in Northern Areas.

The data depicts that the major thrust of agricultural financing is towards farm sector. Out of total disbursements of Rs90.3 billion, an amount of Rs66.3 billion (73 per cent) was disbursed in farm sector and Rs24 billion (27 per cent) to non-farm sector

The bank-wise data reveals that the five big commercial banks and Zarai Taraqiati Bank Limited (ZTBL) extended country-wide loans. However, disbursement by other commercial banks was restricted to areas based on their branch network in respective districts.

Punjab Provincial Co-operative Bank Limited (PPCBL), being a provincial bank, has covered all districts of Punjab, while Bank of Punjab covered all districts in the province in addition to one district in Sindh and three districts in the NWFP.

With a view to analysing the current agricultural loaning at the grassroots level and to identify the gaps between demand and supply of agricultural financing, the State Bank has rationalised agricultural credit data base with effect from July 2007, whereby banks are sending agricultural credit data on size of loan, land holding-wise disbursement, and district-wise loan data, etc.

The SBP says the move is part of various initiatives, including guidelines, schemes on agricultural financing, capacity building of banks and creating awareness amongst the farming community, to continuously enhance the flow of credit to the agriculture sector.

The SBP said the data will help researchers, economists, policy-makers and other stakeholders in policy formulation.

Punjab consumes 84pc of farm credit -DAWN - Business; March 30, 2008

 

[Neo]

Pakistan gets chance to capture rice markets​

RIYADH, March 29: With India and Vietnam, the two major rice exporting countries, opting to restrain their rice exports, Pakistani rice exporters could re-enter the regional markets in a big way, experts here think.

India has been the major rice exporter to Saudi Arabia for last many years. The country has also been procuring rice from Pakistan, the United States and Thailand. Pakistani basmati is believed to be preferred in the Eastern Province. In the Western Province of the Kingdom, there is a preference for parboiled rice. The United States and Egypt are among other countries exporting rice to Saudi Arabia.

Saudi Arabian annual rice imports are in excess of one million tons. India currently holds roughly 70 per cent of this market, but this could be in for a major change in view of the recent Indian restriction on exports. Pakistan could be a major beneficiary, re-entering the lost Saudi market in a big way, if proper incentives are provided.

Pakistan’s share of the market today stands roughly at 11 per cent. A decade ago, Pakistan was holding 50 per cent rice market of Saudi Arabia. In recent years, Pakistani exporters have been endeavouring for a 25 per cent share of the Saudi rice market within the next few years, expanding it to 50pc ultimately.

Reports here indicate that India has raised the minimum sale price for rice exports by more than 50 per cent, effectively ending overseas sales of all but the highest quality grades. India has raised the minimum export price for non-basmati rice to $1,000 per ton from $650 to protect domestic supplies. It also scrapped tax incentives for exporters of non-basmati rice to tame price pressures in local markets.

India traditionally exports about 4 million tons of rice a year. “And this year they just stopped, so that 4 million tons out of a market of say 29 million tons was removed,” analysts said, adding to the tight global supply scenario of the staple grain.

A couple of days back, Hanoi confirmed also it would cut rice exports by 22 per cent this year. In Vietnam, consumer prices rose by nearly 20 per cent in March, the highest in more than 12 years, while India’s wholesale price inflation has surged to a near 14-month high, posing a major policy challenge at a time when economic growth is slowing.

Vietnam, the world’s second-biggest rice exporter, will limit shipments to 3.5 million tons; down from 4.5 million tons last year, to stabilise local prices, a government statement quoted Prime Minister Nguyen Tan Dung as saying after Hanoi imposed a limit for the first 10-month shipment last week.

Vietnam exported 859,000 tons of rice in the first three months of this year, up by 5.3 per cent from a year earlier, government figures show.

“Vietnam will save 1 million tons of rice for Northern provinces and will see prices easing following this cut,” rice traders in Ho Chi Minh City, Vietnam’s largest grain trading market, were reported as saying.

Egypt said earlier this week it would also ban rice exports from April 1 to October, so as to hold down local prices. In the meantime, owing to shortages felt in the local market, the Philippines aims to import up to 2.2 million tons this year in what could be the biggest overseas purchase in a decade.

Pakistan gets chance to capture rice markets -DAWN - Business; March 30, 2008

 

[Neo]

11.2 percent decline in textile exports ​

ISLAMABAD (March 30 2008): The share of textile exports in the overall exports of the country decreased by 11.2 percent during July-February, 2007-08 period to 56.6 percent from 63.7 percent of July-February 2006-07. Similarly, the share of textile exports in overall exports of the country in February 2008 decreased to 48.6 percent from 64.5 percent in February 2007.

This clearly reflects a decline of 24 percent. The textile exports declined by 3.44 percent during the first seven months of the current fiscal year over the same period of last year. The government's export target for 2007-08 is $19.2 billion, whereas the declining trend of the share of textile exports in the country's overall exports is indicative of the fact that the country might miss the set target.

The long looming energy crisis in the country has forced most of the textile industrialists to shift their business to Bangladesh. The high cost of production due to power interruption that includes shortage of electricity and high gas tariff has forced industrialist to entertain less foreign orders than ever before. According to a rough estimate, the cost of production is 12 percent more than the regional competitors.

For July-February 2007-08 the overall exports of the country were worth $11.7 billion, while for July-February 2006-07 these were worth $10.8 billion. Comparatively it indicates an increase of 7.2 percent, but the case is different as total textile exports of the country were taken as a whole. For July-February 2007-08 these exports are worth $6,630 million whereas in the same period of the last fiscal year these were worth $6,923 million.

Therefore, the difference of approximately 4 percent is indicative of the decline in the value of textile exports. During July-February 2007-08, the textile exports were worth $6.4 billion as compared to $6.7 billion in July-February 2006-07, showing a decrease of 4 percent. The export of synthetic fibre for July-February 2007-08 was $0.3 billion as compared to $0.2 billion during the same period of last fiscal year.

Business Recorder [Pakistan's First Financial Daily]

 

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Cheap electricity from Tajikistan likely within two years ​

LAHORE (March 30 2008): Tajikistan will be able to export cheap electricity to Pakistan and Iran, Tajik Ambassador Said Saidbaig said here on Saturday. He was speaking at the inaugural session of a seminar on "National Trade Corridor (NTC)," jointly organised by the Lahore Chamber of Commerce and Industry (LCCI) and Chartered Institute of Logistics and Transport (CILT) at the LCCI.

The Tajik Ambassador said his country was constructing a high power transmission line from Tajikistan to Afghanistan and Pakistan. He said a consortium of Russia, Iran, Kazakhastan, Ukraine and Qatar was executing the construction of the two huge hydropower stations of the size Tarbela dam at Raguon.

Within two years after the completion of these projects, Tajkistan would be able to export cheap electricity to Pakistan and Iran. The seminar, presided by National Highway Authority (NHA) Chairman Major General Imtaiz Ahmad, was also addressed by LCCI President Mohmmad Ali Mian, Ambassador of Afghanistan Anwar Anwarzai and LCCI Standing Committee on Transport and Logistics Chairman Muhammad Anwar.

The Ambassador said that the construction process of the international road from Tajikistan capital Dushanbe into the direction of Kyrgyzstan, Uzbekistan and China would give an opportunity to Tajikistan to enter Pakistan and reach Gwadar Port. This road would not only benefit Tajikistan, but would also help Pakistan get additional boost in terms of trade, he added.

NHA Chairman Major General Imtiaz Ahmad said the completion of the National Trade Corridor (NTC) would not only help bring the world resources to Pakistan, but it would also cut the cost of doing business as infrastructure played an important role in promotion of trade and industry.

The NHA chief said Gwadar Port was going to play a big role in the NTC programme because by implementing it in letter and spirit, "we would become part of the international community." He, however, stressed the need for technical training to abreast with the development-taking place across the globe.

LCCI President Mohammad Ali Mian said that with the implementation of NTC programme and declaring Karachi Port as mother port for Afghanistan, Central Asian Republic (CAR) and Western China would give considerable boost to economic activities in the region. He said that the key objective of the NTC programme was to reduce share of domestic transport and cost of non-service factors in total value of commodities.

It would also help enhance railways share of long distance traffic of freight and reduction in the operating deficit of railways and improve safety of transport and procurement operations, he said.

He said that under the NTC programme, it was proposed to set up multi-purpose parking and resting facilities for trucks and drivers at locations close to the main cities.

He said that other carrier companies along with National Logistic Cell (NLC) should be allowed to carry goods in transit to Afghanistan and Central Asian Republics as the NLC had failed to operate in these countries due to economic and political situations in Central Asian Republics and Pakistan.

Stressing the need for the modernisation of freight trucking fleet, Mian said that it was imperative as Pakistan's dependence on road freight was high and was growing fast.

The government should provide all necessary support for the modernisation of infrastructure facilities under the NTCIP, which would contribute in saving of two to 2.5 billion dollars per annum, he said, adding the modernised trucking fleets would reduce fuel import bill by 25 percent and road maintenance cost by one billion dollars. At the end, Mian distributed certificates and shields to participants.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

SPI-based inflation up by 17.35 percent ​

ISLAMABAD (March 30 2008): The SPI-based inflation increased by 17.35 percent in the week ending on March 27 2008 over the same period of last year, with prices of 22 essential commodities going up, according to Federal Bureau of Statistic on Saturday.

This is the fifth consecutive week of rising inflation since the start of March with adjustment of oil prices making life harder for everyone. A record 5.18 percent increase in SPI inflation was recorded in a month jumping from 12.16 percent on February 28 to 17.35 percent on March 27.

As a result, prices of essential commodities went up manifold denting people's purchasing power even of food items. Although, the State Bank has been pursuing tight monetary policy to curb inflation which it anticipates to persist and magnify in the months ahead, it seems insurmountable as is evident from the statistics. It remains to be seen how the new government will tackle the situation.

Global increase in food prices, the demand-supply issues and excessive borrowing by the government were major causes of inflation compressing the economy. Weekly data on SPI inflation released by the FBS showed that dearness was 19.12 percent for families grouped in Rs 3000 income, 18.54 percent for Rs 3001 to Rs 5000, 17.84 percent for Rs 5001 to Rs 12000 and 16.09 percent for families with income group of Rs 12,000 per month.

According to FBS, during the week under review, the price per kilogram of chicken went up to Rs 103.81, chicken eggs Rs 42.89, tomatoes Rs 43.16, red chillies Rs 159.72, vegetable ghee 2.5 litre Rs 383, onion per kg Rs 11.17, rice Irri Rs 28.40, rice basmati broken Rs 38.81. One wonders where Basmati rice is available at this prices, milk fresh Rs 31.46 per litre, the market price is Rs 38 per litre, kerosene oil Rs 48.56 per litre, mash pulse washed Rs 72.17, and mustard oil Rs 140.56.

The prices of 22 essential commodities increased during the week while prices of 10 commodities declined from the list of 53 essential commodities used to measure weekly inflation. The list showed that prices of 21 items remained stable during the week but were dearer as compared to the corresponding period of last year.

The SPI bulletin, based on data of 53 items collected from 17 urban centers, showed no let-up for the poor who have to spend more money to buy the same goods every week.

Business Recorder [Pakistan's First Financial Daily]

 

[mujahideen]

Economic policies will be reversed

YASIR HABIB KHAN

LAHORE - PPP Co-Chairman Asif Ali Zardari and PML-N Quaid Nawaz Sharif have reiterated their resolve to make Parliament the supreme body of the country and vowed to change the prevailing system in a way, which could be beneficial to the masses

Addressing a joint Press conference at Raiwind on Sunday, Zardari also gave the idea of declaring the judiciary and police as superior services, fully entitled to have extra benefits. He said that the officers of these services would perform very important duties.

Ishaq Dar, the Finance Minister-designate, said that all the economic policies of the previous government would be reversed. He said that the new government in 10 days would issue a balance sheet of the economy, which would provide important facts and figures about the present state of the economy.

It was the first time that Zardari has visited Raiwind, Jati Umra and also held a detailed meeting with Nawaz Sharif. PML-N President Shahbaz Sharif, Ishaq Dar, Senior Minister-designate Ch Nisar Ali Khan and other leaders of both the parties were also present on the occasion.

Prior to the Press conference, Zardari offered fateha at the grave of Mian Muhammad Sharif, father of Nawaz Sharif and prayed to Allah Almighty to grant eternal peace to the departed soul.
During the Press briefing, both the leaders showed gesture of unity and friendship towards each other, which is also hallmark of their relationship. Zardari told reporters that he had come here to seek blessings for Sharif family elders, so that our next generation should know what type of relations we had.

Both the leaders said that the pro-democratic political forces had come together to begin an unmatched era that aimed at changing the system and to put the country on the path of the development and progress. Change of system would be the revenge to the brutal assassination of Benazir Bhutto, they added.

Nawaz Sharif said that meeting would deliberate the national issues to put the country on the right path. Zardari said that the relations with Sharif family would continue upto new generations. He said that his visit to Raiwind residence of Nawaz Sharif also aimed at strengthening the relationship between the two mainstream political forces in the greater national interest.
Responding to a question regarding joining hands with the MQM, Zardari said that the political parties always had the reservations with other forces but whereas the induction of MQM in Sindh government was concerned he had yet to talk to Nawaz Sharif about this.

Nawaz Sharif said that his party still had reservations for MQM and the PML-N would continue its reservations until MQM cleared all the reservations that PML-N had. He however, said that these were not main issues and would be discussed in the meeting with, Zardari.

Mr Zardari talking about the assassination of Ms Benazir Bhutto said that it was a big conspiracy to put the national stability on stake. He said that some elements were still busy in the same conspiracy to break the country and joint efforts were needed to counter all such conspiracies.
Answering another question regarding induction of new ministers in the cabinet, Zardari said that more names were being considered for the cabinet. He said that all the decision would be made with mutual understanding keeping in mind the welfare of the people.

To another question, Nawaz Sharif said that this was the time to ensure the supremacy of the parliament and parliament never wished to develop confrontation with any one. He said that the parliament only could deliver to the masses when its supremacy would be ensured.

Without naming anyone, he said that the institutions that had never accepted the supremacy of the parliament always went for the confrontation with the parliament but on the other hand the parliament always dealt with the institutions on merit and always avoided its interference.

When asked about the judicial crises Nawaz Sharif said that this was not such a big issue and would be resolved soon with the mutual understanding and through the parliament. PML-N chief Nawaz Sharif said that parliament will now take decisions about the steps for eradication of terrorism and extremism alleging President Musharraf has used war on terror for the sake of his rule.

He opined that Pakistan of today was not what it had been on October 12, 1999. A single man trampled the independence and sovereignty of the country. He termed the present transfer of power as transfer of problems. “We are facing the problems such as emergency, 58(2) b, National Security Council, blood carnage, inflation, water and electricity crisis, foreign debts of Rs 42 billion and domestic debts of 2800 billion. We shall, however, brave these challenges”, he remarked.
All the deposed judges will soon be reinstated under Murree declaration and they will resume their duties, he hoped. Every clause of charter of democracy will be adhered to, he announced. “I advice Musharraf to respect people’s mandate and step down. He should not become burden on the shoulders of nation”, he maintained.

He said that PPP-led coalition government would lay down solid foundations for the rule of law by the following specific measures.

The Nation