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Basic accord for Turkmen gas project signed

ISLAMABAD, April 24: Pakistan, India and Afghanistan on Thursday signed a framework agreement to buy natural gas from Turkmenistan, despite the cost of laying a pipeline from the Central Asian state having increased to $7.6 billion from the earlier estimate of $3.3 billion.

The original agreement signed by three countries in December 2002 was revised to allow India to join the US-backed gas pipeline project for importing gas from Turkmenistan by 2015 to meet its growing energy needs.

Thursday’s agreement came amid uncertainties surrounding the Iran-Pakistan-India (IPI) pipeline project.

Indian oil minister Murli Deora who attended the meeting here on Thursday, will hold a meeting on the unresolved issues of transit fees and transportation tariff for the IPI project with his Pakistani counterpart on Friday.

The United States is discouraging Pakistan and India from importing gas from Iran through the $7 billion pipeline and has been backing the Turkmenistan project as an alternative.

Ministers from Turkmenistan, Afghanistan, Pakistan and India agreed in their 10th steering committee meeting held over the past two days to start work on the much delayed TAPI project in 2010.

The project will supply 3.2 billion cubic feet of gas per day through the 56-inch diameter pipeline starting from the Dauletabad field in Turkmenistan to Fazilka at the Pakistan-India border, passing through Herat and Kandahar in Afghanistan and Multan.

Addressing a joint press conference, Minister for Petroleum and Natural Resources Khwaja Mohammad Asif said that despite the significant increase in project cost estimates it was considered economically and financially viable.

Turkmen Minister for Oil and Gas Industry Dr Baymurad Hojamuhamedov said huge new gas reserves had been found in his country and it would award the contract for certification of reserves of various fields to a British consultant by the end of the current month.

He said the total gas reserves in Turkmenistan were about eight trillion cubic metres.

Mr Asif said the countries had agreed to formulate a long-term pricing mechanism which would be attractive to the buyers as well as the seller, and reflect the new market trends.

Indian Minister Murli Deora confirmed that talks were being held on the IPI pipeline plan with his Pakistani counterpart.

Asian development Bank’s country director Peter Fedon said the bank had facilitated the signing of the TAPI agreement. However, he evaded answering a question about possible assistance for the IPI project.

Turkmenistan informed the meeting that the audit report on certification of its reserves would be available by Sept 30.

The parties agreed that a technical working group would prepare a draft of the gas sales and purchase agreement by Dec 31. The next meeting of the group will be held in New Delhi by October.

The ADB agreed to take up the issue of a comprehensive review of the feasibility study in order to move forward to the next phase of inviting investors’ interest in the project.

The parties agreed to form a consortium of investors to undertake the detailed feasibility study and further actions.

Afghanistan proposed to take up to five million cubic metres per day in the first two years after implementation of the agreement and up to 14 million cubic metres of the 90 million cubic metres allocated to the project from the third year. Pakistan and India agreed to equally share the remaining volume.

The member countries will discuss the issues of payment of transit fees to Afghanistan and Pakistan, taxation structure and consortium procedures by 2009.

Basic accord for Turkmen gas project signed -DAWN - Top Stories; April 25, 2008
 
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Rethinking Development Strategy: ‘Pakistan can take advantage of world commodity crisis’

LAHORE: The state’s role in facilitating development in countries such as Pakistan through technical advice and financial support is very important, while the policies based on the ‘Washington Consensus’ may not necessarily be ideal for the developing countries and thereby should be taken ‘with a pinch of salt’.

Participants expressed these views at the second day of the Fourth Annual Conference on the Management of the Pakistan Economy, held at Lahore School of Economics (LSE) on Friday.

The day started with the session on ‘Rethinking Development Strategy’. Dr Shahid Javed Burki chaired the session.

Dr Naved Hamid, former Senior Economist, Asian Development Bank, said that unlike the development trajectory followed by the newly industrialised countries, growth prospects could no longer remain dependent on manufacturing and export orientation.

“The change can essentially be attributed to an in exhaustive labour supply in China due to which it is attracting high FDI flows,” he said adding that the new path is that of outsourcing tradable services encapsulating both high and low skill jobs.

The acceleration of globalisation has been made possible through the Information and Communication technology sector, which has resulted in the death of distance. Further propounding on the benefits of services led growth strategy, he said that the balance of payments constraint would be relaxed in addition to greater employment generation.

A key role must also be played by regional cooperation through which market access can be widened and higher investment levels can be achieved. However, to exploit this opportunity Pakistan must invest in expanding its knowledge economy.

The second sector deserving attention is the agricultural sector, as Pakistan can benefit from the rise in the international price of food commodities if it chooses to remove widespread distortions in the system. Dr Rajiv Kumar, Director and Chief Executive, Indian Council for Research on International economic relations, highlighted the problems being faced by the Indian economy with regards to the services sector development. He referred to it as unsustainable and conducive to the development of a dualistic society. This assertion was based on the fact that more than 50 percent of the Indian population is employed in the agriculture sector, which is only about 18 percent of the GDP.

He further briefed on the performance of the Indian economy and stressed on the need to revise prices upwards given the rising global prices scenario.

His participation was much appreciated due to the insight he provided on the various constraints that the Indian policy makers are faced with and their similarities with problems in Pakistan. The fifth session of the conference was a panel discussion on Inflation, Macroeconomic Stability and Growth. This session was aimed at delineating different perspectives on why inflation, global and domestic is rising, and what is the new route to be taken to minimise the impact of the crisis. The panellists were Dr Azam Chaudhry, Dean of Economics Department, LSE, Riaz Riazuddin, Economic Advisor, SBP and Sakib Sherani, Chief Economist, ABN Amro Bank.

The discussion in this session took into account both the monetarist and structuralist point of view with regards to the causative factors of inflation. The main conclusions pointed towards the need to remove distortions in the agriculture and oil sector in Pakistan so that the impact of rising food and oil prices can be dampened. It was also highlighted that the impact of food inflation is higher on poverty in rural areas as compared to rising fuel costs. However, in the longer-term rising food prices will benefit the rural poor engaged in farming of food crops, as the price of their produce will rise. Another interesting point raised in the session highlighted how rigorous monetary tightening can control food inflation. The adequacy of monetary tightening was also questioned, as peaks in reserve money have not been lowered in the contractionary phase post financial year 2005.

The effort made by the Lahore School in organising such an event must be lauded, given the urgent need to resolve economic issues impacting political stability in the country. It can be further said that such an event has not been organised before considering the quality of the papers presented by prominent policy makers and academicians.

Daily Times - Leading News Resource of Pakistan
 
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SPI weekly inflation surges by 24 percent

KARACHI: The Sensitive Price Index (SPI) based weekly inflation surged sharply by 23.71 percent during the week ended April 24, 2008 over the corresponding period of previous year.

“Weekly inflation also increased by 1.13 percent during the week under review compared to preceding week”, official data indicated on Friday.

The big jump in the weekly inflation was caused by major increase in the prices of kitchen items, triggered by raise in the prices of domestic oil prices.

The steep rise in the inflation has burdened the poor segments of the society more because the low-income group was hit hard by the inflationary trends during the week.

The households in the two lower income brackets of upto Rs 3000 and Rs 3001-5000 felt the pinch of this weekly inflation surge more as it shoot up by 26.65 and 26.15 percent respectively.

SPI increases by 24.32 percent for the households in the income group of Rs 5001-12000 and was up by 21.16 percent for income group above Rs 12,000.

The SPI basket is consisted of 53 essential items for all income groups in 17 urban centers of the country. During the week, prices of 29 items increased and only four items registered decline whereas as prices of 22 items remained unchanged over the previous week. Prices of 27 items went up as compared to the previous week. The prices of red chillies went up by 26.42 percent to Rs 218.14 per kg as against Rs 172.55, rice Irri-6 up by 8.01 percent to Rs 37.61 from Rs 34.82, rice Basmati broken up by 6.86 percent to Rs 45.30 against Rs 42.39.

Price of diesel increased by 6.85 percent to Rs 47.28 over Rs 44.25, gram pulse washed up by 6.40 percent to Rs 50.54 over Rs 47.50, petrol up by 4.79 percent to Rs 66.03 against Rs 63.01.

An increase of 4.61 percent was seen in the price of potatoes to Rs 13.17 against Rs 12.59, 3.06 percent in price of bananas to Rs 37.40 per dozen against Rs 36.29, 2.89 percent in price of egg to Rs 55.13 per dozen against Rs 53.58, 2.21 percent in price of onion to Rs 12.02 per kg against Rs 11.76. The prices of wheat flour, masoor pulse washed, wheat average also witnessed visible upward change during the week.

Daily Times - Leading News Resource of Pakistan
 
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Pak-Thai bilateral trade to grow: Abbasi

KARACHI: Federal Minister for Commerce, Trade and Industry, Shahid Khaqan Abbasi Friday hoped bilateral trade volume between Pakistan and Thailand would grow manifold with the regular holding of trade exhibition.

At the inaugural ceremony of the 4th Thailand Exhibition, the minister said holding of such exhibitions on regular basis, would go a long highlighting Karachi worldwide as a normal city where trade activities were continuing without any fear of violence.

He hoped Pakistani exporters would also display their products in Thailand to draw attention of their buyers, which would ultimately help boosting country’s export in diversified field.

Thai Consul-General to Karachi, Joompol Manaschuang said we have full confidence in the economic potential of Pakistan as hub of trade activities of the region and this consecutive trade exhibition bears testimony to this fact.

He said by the end of the current year or beginning of the next year, Thailand would open permanent commercial office in Islamabad, which would help strengthen trade ties between both the countries.

He said during the tenure of the present government, bilateral trade relations between Pakistan and Thailand would grow with leaps and bounds. He said there were many potential sectors in which Pakistan and Thailand could mutually benefit which includes hotel and tourism, construction, leather, agro-based industries and fisheries, power generation and infrastructure development.

Department of Export Promotion, Ministry of Commerce Royal Thai Government and managed by the Thai Trade Center in association with the Royal Thai Consulate-General Karachi organised the event.

Daily Times - Leading News Resource of Pakistan
 
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Pakistan, Japan hold talks on bilateral co-operation, investment

ISLAMABAD: Japan and Pakistan held in-depth deliberations to increase bilateral cooperation, especially Japanese financial assistance to Pakistan. The two sides also discussed ways and means to encourage Japanese investment in the country.

Seiji Kojima, Ambassador of Japan meeting with Senator Ishaq Dar, Finance Minister on Friday reviewed overall economic cooperation, discussed ODA assistance, grant assistance, non-project grant assistance and the role of JICA for bridging the gap between the two peoples. The two sides also discussed high-level policy dialogue 2008 in Tokyo and forthcoming deliberation on aid and its effectiveness at Accra Forum and Japan ’s role as a leading development partner of Asian countries.

Pakistan appreciated Japan’s non-project grant assistance of $6 million for the development of FATA. Japan has indicated ODA assistance of $478 million for the year 2007-08.

The two sides agreed that at mutually convenient dates both would sign and exchange the notes and identify projects to be financed under this facility. Finalization of $92.6 million grant assistance for seven new projects was also discussed.

The role of JICA in promoting cooperation to engage Japanese experts and volunteers was emphasized. JICA has played an important role in human resource development through capacity building courses. It was hoped that the JICA would help Pakistan to meet its training needs for capacity building, research to increase out put in agriculture, livestock, fisheries, biotechnology, horticulture and seafood.

Pakistan sought Japanese assistance to increase ODA volume over the medium term, diversify economic assistance and explore new areas of cooperation including renewable energy. Pakistan also evinced interest in charting new country assistance strategy and enhanced Japanese support for human development projects.

Since 1961, cumulative Japanese assistance to Pakistan comes to around $5.7 billion. Its annual assistance averages to $200 million inclusive of grant and loans.

Senator Dar emphasised the need for economic dialogue between the private sectors of the two countries and hoped that bilateral trade would increase. He shared Pakistan’s financial and economic performance and his deliberations with IMF and World Bank during the recent Spring Meetings in Washington. He hoped Japan as one of the major development partners would increase its bilateral assistance to facilitate its economic growth.

Daily Times - Leading News Resource of Pakistan
 
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Acer announces 51.4% sales growth in 2007

KARACHI: Acer Computer, the world’s Third largest IT vendor, has announced a 51.4 percent year-on-year growth in 2007 for sales in the Middle East, and Africa (MEA) region, said Jacob Varghese, Regional Sales Manager of Acer Computer Middle East.

Pakistan also falls in the same region. Acer’s consolidated revenue in 2006 rose 16 percent to $14 billion. In the MEA region Acer holds the top position in the supply of Notebooks, backed by a 73.1 percent year-on-year growth.

In the Kingdom of Saudi Arabia it holds the same position with a 26.8 percent market share in Notebooks.

It commands an overall market share of 20.1 percent in UAE, which has also seen a 73.1 percent year-on-year growth in the supply of Notebooks, and in Turkey it holds the number two spot with a market share of 13 percent.

Daily Times - Leading News Resource of Pakistan
 
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Pak engineering products attract foreign attention

ISLAMABAD: Engineering Development Board (EDB), Ministry of Industries and Production organised participation of 55 engineering companies in Hannover Messe, a leading technology exhibition in Germany from April 21 to April 25, 2008.

Pakistan pavilions at subcontracting and Energy/Power Transmission Technology categories attracted the customers due to the quality of products and the décor of the pavilion.

The Ambassador of Pakistan to Germany, Shahid Kamal, accompanied by the commercial counsellors of Germany and Netherlands visited pavilion.

The exhibitors praised the efforts of EDB for organising participation of Pakistani engineering industry in the world-class events and stressed the continuity of participation in Hannover Messe in upcoming years. Due to the repeated participation since 2005, each exhibitor has received more business queries in comparison to the previous years, which will result in increase of exports of engineering goods and services.

The representatives from various international chambers of commerce, business support organisations, western organizations for import promotion from Asian region and European research organizations visited Pakistan pavilion to witness technologies including castings, forgings, precision machined components, electrical goods, plastic, rubber and sheet metal parts displayed by engineering sector of Pakistan at the event.

The representatives from CBI, Import Promotion Organisation of the Netherlands, SIPPO-Swiss Import Promotion Organisation, Turkish Chamber of Commerce and Industry, Spanish, Italian, French and various German chambers and trade associations met Pakistani delegation to discuss possibilities to boost trade of engineering goods and services with Pakistan.

Daily Times - Leading News Resource of Pakistan
 
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How can TAPI and IPI save Pakistan?

Pakistan, Afghanistan and India have signed a “Government Framework Agreement” in Islamabad to initiate the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project to supply gas to the three “downstream” countries. India has formally joined a project that was earlier called TAP without India. The Asian Development Bank (ADB) is pushing the project whose feasibility was already approved in 2003. Later, it was discovered that the project would be profitable to Turkmenistan only if India joined to take 60 percent of the supply. India wanted to join the project but was sitting on a see-saw about actually formalising its entry into the deal.

Are we out of the wilderness on a plan that was set on foot in the early 1990s and got snagged in global politics? The Taliban decided to take on the world instead of taking the American bait on the Turkmen pipeline, and the project was laid off after a “hopeful” American company left Kabul. An alternative emerged in the shape of the Iran-Pakistan-India (IPI) pipeline, but once again got snagged in international politics. Iran decided to take on the world on its nuclear programme, which scared India off and left Pakistan alone carrying the bag while Tehran played tough on price-fixing. Fear of American sanctions scared off prospective financiers like the ADB and suddenly IPI began to slip and TAP came on line again as TAPI.

The TAPI pipeline will run from the Daulatabad gasfield to Afghanistan, from there it will go alongside the highway running from Herat to Kandahar, and then via Quetta and Multan in Pakistan to India. The final destination will be the Indian town of Fazilka. It will supply 33 billion cubic meters (bcm) of natural gas annually, its major customer being India. There will be six compressor stations along the entire length of the pipeline and it will have to be guarded by the states they pass through, apart from the pipeline. The largest stretch will fall to the share of Pakistan, between Quetta and Multan and the Indian border. The cost of the project was just over $3 billion in 2003; today it is $7.6 billion. The supply is to begin in 2015 if TAPI too is not sabotaged.

The Indian press says that IPI is as good as dead and that TAPI is on. Most officials get riled at the idea that the states have backed off because of the American threat to apply sanctions to whosoever helps in building the IPI, but the ADB is clear in its mind that the IPI is not feasible in the current circumstances. And it is feasible only if India joins it. This applies to TAPI as well. After India dilly-dallied, Pakistan tried to revive the IPI by getting China in on the pipeline at the cost of creating an eighth wonder of the world in the shape of a high-altitude pipeline into Sinkiang, once called High Asia.

India and Pakistan need gas to survive. India is actually more desperate because of its steady high growth rate but its efforts to get gas from the east from Bangladesh and Burma have not brought fruit. When it glanced towards the West it saw Pakistan sitting athwart a geo-strategic terrain demanding a solution to Kashmir as a pre-condition. So it decided to build a fleet of carrier ships for Liquefied Natural Gas (LNG) from Iran and Central Asia via Iran. But developments inside Pakistan have damaged Pakistan’s geopolitical importance. And both Iran (on price) and India (on transit fee) have pointedly negated Pakistan’s geopolitical advantage of being in the middle. The military textbooks on geopolitics therefore need to be revised.

The IPI has also become subject to non-credibility because of the depredations of the Balochistan Liberation Army (BLA) which blows up pipelines that already exist in the province. The last time the federal government talked to the political parties in Balochistan through two senate committees, the consensus was that there should be no new cantonments built in the province, a prospect without which the IPI would have been jeopardised. Now the new chief minister of Balochistan wants his province to be given sovereignty under the 1940 Lahore Resolution which means he wants the “sovereign” right to decide the IPI and the not the federation. This is easier said than done.

The TAPI pipeline too will come from Kandahar and enter Balochistan to reach Quetta from where it will proceed towards Multan. So once again the BLA will target it, and without proper military supervision, the pipeline will not be safe. The fact to be kept in mind is that both Afghanistan and Pakistan are domains of disorder lying between two economically upward-mobile regions. Both are “proud”, which means inclined to isolationism and deaf to pragmatic advice from outside. Afghanistan is only reluctantly better controlled because of foreign occupation, but Pakistan is fractured in opinion and the writ of the state. Therefore one conclusion is inescapable: unless both IPI and TAPI become good devices of leverage on, and self-realisation in, Pakistan to set its house in order and become a normal state, the projects are doomed. *

Daily Times - Leading News Resource of Pakistan
 
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Pakistan, India agree on basics to finalise IPI gasline project

* Petroleum ministers say US has no reservations about project​

ISLAMABAD: Terming the Iran-Pakistan-India (IPI) gas pipeline project a “peace and prosperity project”, Pakistan and India on Friday agreed on basic principles to finalise the bilateral agreement of the project within the next few weeks.

Addressing a joint press conference at the conclusion of a bilateral ministerial level meeting, Petroleum Minister Khawaja Asif and Indian Petroleum Minister Shri Murli Deora said that three bilateral issues pertaining to the project were discussed during the meeting — the structure of the pipeline company that would execute and manage the project, transportation tariff and the transit fee that Pakistan would charge from India..

No reservations: The two ministers said that they would consult their respective governments during the next two weeks for an early conclusion of the agreement. To questioning, they said that the United States had not conveyed any reservations about the project to them, adding, “We are only dictated by our energy needs for economic development and prosperity.”

Khawaja Asif told the conference that the recommencement of talks with India would help the project complete according to schedule. He said the construction of the pipeline would start by 2009 and would be completed by September 2012.

Elaborating on the proposed route of the pipeline, Asif said it would start from Iran and enter Indian state Jaisalmir via Gwadar and Nawabshah. He said Pakistan’s pipeline component would cost $3 billion.

The Indian minister said that consensus between the two governments on bilateral issues relating to the IPI project would help them finalise the agreement within days or weeks. He said the Indian government believed the project to be of immense economic and strategic value for both countries, adding that it would add a new dimension to the bilateral relationship.

Daily Times - Leading News Resource of Pakistan
 
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Islamabad and Delhi agree on IPI deadline: project completion by 2013

ISLAMABAD (April 26 2008): While calling it a project of peace and progress, Pakistan and India on Friday declared that they have made substantial progress on controversial issues regarding $7.5 billion Iran-Pakistan-India (IPI) gas line project and a formal agreement to commence practical work was now only a matter of days.

Petroleum ministers of both countries held a crucial round of talks here and discussed three outstanding issues. These included the structure of pipeline company, which will execute and mange the project, transportation tariff and transit fee.

At a joint press conference, Petroleum Minister Khawaja Asif and his Indian counterpart Murli Deora sounded confident over reaching a formal agreement on IPI project timeframe and completion of the gas line by 2013. They also had identical approaches on the issue of US pressure for blocking IPI.

They ruled out any such possibility and said India and Pakistan were badly in need of the project to meet their growing energy demand and none of them could succumb to external pressure. They said their own countries' economics will dictate priorities for IPI gas line project.

Khawaja Asif and Murli Deora said they will present the report on the outcome of Islamabad meeting to their respective governments and this would be followed by formal signing of the agreement on execution of the project.

On the question of Pakistan's invitation to China to join IPI project, Deora said Pakistan side did not convey any such thing during the talks and he has nothing to say on it. He also did not divulge on the details of transit fee and security cover to be given to IPI gas line. He said these issues were discussed at the meeting and their outcome will be announced at an appropriate time.

Khawaja Asif denied any change in the gas line route and said the initial route was intact and gas line will pass through Pakistan along coastal highway in Balochistan and then from southern Punjab to reach the Indian part from Wagha, Lahore. He said that financial support will be sought from international donors once the project reaches that stage.

A joint written statement issued after the meeting said the petroleum ministers of Pakistan and India met on Friday in Islamabad with their respective delegations to discuss bilateral issues pertaining to IPI gas line project.

It added the meeting was held in a cordial atmosphere and both sides had complete mutual understanding on key issues relating to the structure of the pipeline company, which will execute and manage the project. Other issues which were discussed during the meeting were transportation tariff and transit fee. It maintained that consensus was reached in principle and this will be followed by a bilateral agreement between the two sides.

Business Recorder [Pakistan's First Financial Daily]
 
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'We're working with Tajikistan to help bring electricity to Pakistan'

KARACHI (April 26 2008): US Assistant Secretary of State for South and Central Asia Richard Boucher has said his country is working with Tajikistan to help bring electricity south to Pakistan, where Pakistan really needs the electricity.

In the State Department Foreign Press Center briefing, the senior official also speaks at length about Pakistan government's approach of negotiating with the tribes. According to him: "It [negotiating with tribes] is not something new in this area. President Musharraf's government [PML(Q)-led coalition] did it, previous Pakistani governments did it and British governments did it."

"Go back as far as you can and you find out that there has always been an element of negotiation, an element of force, an element of development. In a way, that's Basic Counterinsurgency 101. If you look at how anybody's operating in those kind of situations, you see that you have to talk to people," he says.

The US State Department official also says that his country is working with Tajikistan, Uzbekistan and Turkmenistan to develop electricity lines and supply for Afghanistan, because Afghanistan needs electricity and they can generate it. We're working with Tajikistan to help bring electricity south to Pakistan, where Pakistan really needs the electricity. The following are excerpts from State Department Foreign Press Center briefing on "the years ahead in South and Central Asia" by Richard Boucher in Washington on Wednesday:

BOUCHER: But I wanted to make a few comments in the beginning. And you know, in a way it's good that it took me so long to get over here because a lot of what we're going to do this year, what we're dealing with this year has to do with what's happened in the last few months.

And I think there's a new sense of momentum, a new sense of energy in a lot of parts of this region of South and Central Asia. And a lot of new opportunities have opened up, particularly because some of the things that happened in the early part of this year.

We've had an election in Pakistan. It's a successful transition to democratic government. As we'd said before the election - we hoped the election would produce a democratic government with a strong moderate center - and indeed they formed a coalition of centrist parties. And everybody there, I think, is looking at how to move forward as a modern society and to encourage moderation and have a stable basis themselves to fight the extremism and the terrorism that afflicts Pakistan as well the neighbourhood and the world beyond.

I think one of the most key things that I keep hearing, from Pakistanis in the new government, is they understand this is their struggle, this is their war, and that they want to approach it using all possible means, which means providing people with better opportunity and education but also using force when necessary.

The democratic transformation in Pakistan offers us, I think, a clear opportunity. And we ourselves in the United States government are talking to the new government and looking ourselves at how we can be more engaged in this sort of broad-based approach to, you might say, modernising Pakistan, stabilising Pakistan.

We've also had a very significant meeting on Afghanistan, with our Nato and ISAF partners, in Bucharest where you heard, from the international community, a strong long-term commitment, again broad-based, using all available tools and means to bring stability to Afghanistan.

And we've had one of the appointments that I think sort of reflects where I'd like to see the effort concentrate this year. And that's the appointment of Kai Eide as the new special representative for the UN secretary-general for Afghanistan. He's already been out in Afghanistan. He'll be visiting Washington next week. You'll have a chance to talk to him further.

But one of the really important efforts this year is to better co-ordinate all aspects of the effort in Afghanistan, is to improve the co-ordination and concentrate the effort, so that particularly when you get down to district level in Afghanistan, if you can bring in military forces necessary to deal with the bad guys, the insurgents, then you need to bring in good governance; you need to bring in police; you need to bring in small projects; you need to talk to the people and the tribes who are there; you need to start connecting them to the national grid, electronics, the electrical system, connecting them to the road system.

And so a real opportunity there, I think, if we can co-ordinate well, that's what brings stability. Extending the government, extending the capabilities of the government, into the districts, is what brings real stability in Afghanistan.

And so the appointment of Kai Eide, as a better co-ordinator for the international community, I think, is also a sign of our intention to co-ordinate all these efforts, between ISAF, between the UN, between the donors and between the Afghan government.

Q: Let me just read you this - oh, I'm sorry. Barry Schweid, Associated Press. For clarity, I might as well read you the AP lead here: "Pakistan freed a pro-Taliban cleric and quickly signed an accord with his hard-line group Monday, the first major step by the new government to talk peace with militants and break with President Pervez Musharraf's policy of using force."

You spoke positively of developments in Pakistan. You, I think, described them as on a path of democracy. Is this an isolated case, do you think? Or can we now expect democracy to represent itself by making deals with Taliban fighters and other hard-liners. Is that what the US wants?

BOUCHER: You want me to rewrite the lead for you? (Laughter.) Or you just want a general comment?

Q: I wanted a general - he's an elderly guy, say, and maybe it's a hard case.

BOUCHER: I'm happy to rewrite the lead for you if you want me to make it more accurate.

Q: All right.

BOUCHER: But let's not do that here. I think we understand, the Pakistani government has always understood, that there is an element of force; there is an element of negotiation. I mean, negotiating with the tribes in this area is not something new. President Musharraf's government did it. Previous Pakistani governments did it. British governments did it.

Go back as far as you can and you find out that there has always been an element of negotiation, an element of force, an element of development. In a way, that's Basic Counterinsurgency 101. If you look at how anybody's operating in those kind of situations, you see that you have to talk to people.

I just spent an hour, probably an hour-and-a-half with about 10 representatives of - various tribal elders and representatives of tribes from the border areas, both the Pakistan side and the Afghan side. And the message I got from them is, work with us; support the Jirga process; we can talk these things out; we can bring people over and we can work with you as necessary where there are violent elements that have to be dealt with.

So I think that is the approach that all of us share. The Pakistani government is engaged in a number of discussions and negotiations right now. The release of Sufi Muhammad came as a result of one of those agreements. As far as we understand it, the agreement says that they - his group will not resort to violence. They will abandon violence. They will stop supporting violent elements. And whatever they want to advocate, they will advocate peacefully.

That's important. Getting the tribes on your side is important. Getting people who have been involved in violence, in the past, to abandon violence and take on a peaceful path is important. Now, what's been the problem? The problem has been that many times, those deals are reached and they're not enforced; that if one side - the other side violates the agreements, the other side, as in the past, has said there will be no Taliban, there will be no al Qaeda activity around here, and then that activity starts up again, who's going to deal with it?

So I think to us, negotiations are a tactic. They're a part of the whole picture. One of the keys is to have enforceable agreements, enforceable negotiations and a willingness to make sure these things are followed. So I don't think there's - you know, it's not the negotiation per se. It's not a new tactic but it's got to be done with a way to make sure it produces results. The results are what matter. The outcome is what matters.

There has to be less violent activity. There has to be an end to the al Qaeda elements, who are very dangerous, who are up there plotting and planning, not so much in this case in the Swat Valley but certainly in the cases of Waziristan, where there's negotiations going on. And that's the outcome that matters, and everybody has to be focused on that.

Q: (Name inaudible) - from Pakistan's Dawn Newspaper.Two things. This is about the peace deal between Pakistan and the militants. Did they take you into confidence before they started the negotiations? And did you give some sort of a sketch or an outline, what you expect from these talks and how you want Pakistan to deal with it if the militants break their promise and go back to violence?

And also, there was a statement today - it's attributed to one of your senior officials who visited Islamabad - saying that the United States does not want to impose its views on Pakistan on the judicial issue and that they will have no problem with the reinstatement either way; they're not for it or against it. So is it some bit of a change in US attitude on this issue?

BOUCHER: No. And the answer to the first part is, a little bit. We've had - I guess the subject of negotiations, the subject of approaches to the tribal areas, whether it's the economic development of these areas, tribal area strategic development plan, whether it's a question of security transformation and dealing with the security problem, or whether it's the issue of the political context of negotiations, it's a matter of these are all things we discuss very frequently with Pakistani officials.

During Under - Deputy secretary Negroponte's trip, in some of the meetings I had afterwards, we talked about all these issues with the new political leaders, the prime minister and others, talked about them with people in the military and people we knew who had been in the government for a while.

So to that extent, yes, this is a regular subject of conversation with members of the Pakistani government. We've heard a lot of their views and will continue to listen to their views and discuss these issues with them.

As far as a particular deal having been discussed with us, frankly I haven't had any conversations about Sufi Muhammad or some of the things going on in Waziristan. But I'm sure our embassy has. I just don't know. I mean, I think we generally kind of know what's going on. We probably read your newspaper every morning to find out. But we also have our own conversations.

So I'd just say generally we're pretty much aware of the ideas and plans the Pakistani government makes, to try to solve the problems in the tribal areas. We're supportive. That's, I think, our main role, is to support these things; support the transformation of the Frontier Corps into a capable security organisation; support the sustainable development plan so that people can get an education, can get jobs instead of having to take up a gun in those areas; and support the political context, which is really mostly a Pakistani effort of the new government, to change the political context for those areas as well.

Q: (Name and affiliation inaudible.)In relation to Afghanistan, given the developments in Afghanistan and problems, especially the security one, does it have any bad impact on Central Asian countries, given the fact that they can use Afghanistan as their trade route with other countries? If you can, comment on that. Thank you.

BOUCHER: I think Afghanistan is vital to the Central Asian countries, for good and for bad, that what's happening now in Afghanistan, stabilising Afghanistan as an open economy, as a friendly nation for everyone, is really not just necessary to fight the terrorism that we're all concerned about, but it's a strategic and historic shift. I mean, for several hundred years - some would say for thousand years - Afghanistan has been a barrier between Central Asia and South Asia.

It's prevented, largely prevented people from moving across. Certainly for the last couple hundred years, it's been the barrier between empires. Now for Afghanistan to open up - as an open nation, a trading nation, a nation with good relations all around - really presents everybody in the region with a new strategic opportunity - everybody from India, with a potential new source of energy and a place to export to; to Pakistan, which becomes a logical port and hub for a lot of this trade; Afghanistan, which becomes a transit point and contributor to the trade; or Central Asia which, in addition to their ties to Russia, China, Europe, gets to open up another set of export routes and avenues.

So we do believe that the development in Afghanistan is vital to these countries and presents a tremendous opportunity. At the same time, the problems of Afghanistan, the problems of terrorism and narcotics are very much of concern to the countries of Central Asia. So we're working with them on how to control the problems, how to deal with terrorism, how to deal with better control of borders, how to deal with narcotics flow, working together at the center that is being organised in Almaty on sharing information on narcotics trafficking so we can stop it better.

But we're also working with them on the opportunities we opened last August. Secretary Gutierrez and I opened a bridge between Afghanistan and Tajikistan. And if you look at what's going on in the region, there's enough roads being built by us and Japan and the Asian Development Bank and the Chinese and others that there's really coming together an Almaty-to-Karachi highway that this bridge is part of.

That's new, that's different, that's good, and that's an opportunity. Customs revenues across that bridge have already increased 10 times since last August across that crossing point. So there's definitely an opportunity there.

We're working with all the countries, all the neighbouring countries of the North - Tajikistan, Uzbekistan and Turkmenistan - to develop electricity lines and supply for Afghanistan, because Afghanistan needs electricity and they can generate it. We're working with Tajikistan to help bring electricity south to Pakistan, where Pakistan really needs the electricity.

So all these things are happening. So I think, yes, the problems of Afghanistan are problems for the region, but the opportunities of Afghanistan are strategic and historic opportunities for the region as well, and we work on it all.

Q: Thank you. Good afternoon, I'm Meredith Buel with Voice of America. To follow up on Barry's question and the correspondent from Dawn's question, to be clear, Dawn has on the front page today that Pakistan's new government has drafted a peace agreement with Taliban militants in the tribal belt. And it quotes both Taliban spokesmen by name and Pakistani officials unnamed as confirming this.

In the past, the United States has said it was very concerned about this sort of an agreement, that these agreements have not worked in the past and have only allowed the Taliban to regroup and al Qaeda to regroup in an environment under which they are under no military pressure. This would also appear to be a major change in Pakistan's policy on how to deal with militants, certainly from the time before this election.

Has the United States changed its approach or policy or feeling about this type of negotiations and peace deal, or are you still concerned that it could allow the militants in the tribal areas to regroup, to plan attacks against the West, and some of the other concerns that you've had in the past?

BOUCHER: I guess - I'm happy to give you the same answer I gave to your colleagues. And I don't understand a question that says, gosh, this is new and it hasn't worked in the past; because it's either not new or it has no history to it. So let's deal with the issue of, you know, previous agreements have put on paper things like -

Q: (Off mike) - what?

BOUCHER: Previous agreements in these areas have put on paper things like no Taliban activity, no "Talibanization," no al Qaeda activity, no cross-border activity. Where these agreements have failed is not in what they put on the piece of paper, not the understandings reached with the militants or the tribes. It was the understandings were not kept and that there was no - no one made clear that they had to be enforced.

And so if you look back at what we said, say, in September 2006 when they reached the deal, we said maybe it will work; and by the end of the year, we say, hey, this is not working because it wasn't enforced. And it was the lack of enforcement that I think was the real problem there.

So, everybody involved in doing this again - and it has happened many more times in various places. Sometimes I supposed it's worked. But in reaching those agreements now, we just have to keep that experience in mind and make sure that everybody understands that it is important to work with the tribal leaders.

And some of those involved in these discussions already make the distinctions that these are understandings being reached with the tribes, not with the militant organisations. We'll see. That may be a better formula.

But in the end, it's the outcome that matters; are these agreements going to produce an end to the cross-border infiltration, an end to the suicide bombers that head into other parts of Pakistan as well as into Pakistan, an end to the plotting and planning of al Qaeda from this area?

The gentlemen that I talked to today, the tribal leaders - tribal elders from both sides of the border, said they can; that given the right agreements and the right support, they can make sure it results in that kind of outcome. But we all understand, you know, it's the outcome that matters, and we all have to be careful to make sure it achieves that outcome.

Q: Can I follow up?

BOUCHER: Sure.

Q: Thank you. So is the United States supporting Pakistan's effort to negotiate with the Taliban and reach a peace agreement with the Taliban and al Qaeda-supporting groups in the tribal areas of Pakistan?

BOUCHER: We understand that negotiating with the tribes - I make a distinction between the tribes and the Taliban and al Qaeda - but negotiating with the tribes especially is one of the tactics that needs to be used along with other measures. But in the end, any particular agreement can only be judged by whether it stops militant activity and produces the safest situation for all.

Business Recorder [Pakistan's First Financial Daily]
 
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1.5 million tons wheat import to cost around $1 billion

KARACHI (April 26 2008): The national exchequer has to bear around one billion dollar burden following the federal government's decision to import 1.5 million tons of wheat to arrest the swelling wheat flour crisis in the country.

Prime Minister Syed Yousuf Raza Gilani has instructed the concerned ministry to import 1.5 million tons of wheat to fulfil the local demand besides arresting the swelling flour crisis.

Whereas, traders and economists firmly believe that the government's move will put further burden on the national exchequer as prices of the commodity in world markets are on the rise due to global food crisis. Wheat in the world's many countries is short of demand, they said.

"If now Pakistan imports wheat from world markets, the commodity will be costlier and its prices will be ranging approximately 640-660 dollar per ton," said a leading wheat trader.

Analysts estimate that the government will spend one billion dollar to import wheat. They held the previous government responsible for the rising wheat crisis in the country. They linked the commodity shortage with its unabated smuggling to Afghanistan and huge hoarding mainly by exporters.

Pakistan being an agricultural state, mainly depends on its agri products, which not only fulfil local demand but also earn huge national exchequer through exports, they observed. However, smuggling and illegally hoarding of commodities besides unabated exports are the major reasons behind price hike of commodities and their shortage in the local markets, they said.

Apart from one billion dollar, the government will also have to pay billions of rupees on account of taxes and duties, which have been so far imposed on the import of wheat.

The federal government has already spent some $900 million on import of 1.7 million tons of wheat, while some $600 million have been paid as subsidy to maintain prices of wheat at Rs 1,225 per 100-kg bag.

Earlier, last September, the federal government had taken a decision for import of one million tonnes of wheat after two years gap following the soaring prices of wheat and flour in the domestic markets. Later, Trading Corporation of Pakistan (TCP) was given a task to import wheat from Australia, USA, Canada, Russia and Ukraine on emergency basis to fulfil the local demand.

Following the federal government instruction, TCP so far has imported around 1.7 million tons of wheat from USA, Ukraine, Russia and Australia. However, the commodity's import made from Russia arrived in Karachi port on December 2007 failed to rein in the flour prices in the local market, which persistently continued to rise.

Wheat crisis is still looming large on the local markets of the country. Commodity crisis has largely been linked by the sources in Minfal to some internal elements. They said that presently wheat in the world markets is not available due to its insufficiency, while prices of the available stocks are higher than the previously imported wheat.

"The white wheat is also not available in the international markets, making the country import only red variety of wheat for local consumption on higher rates," they added. They said that the task for the import of 1.5 million tons will also be assigned to TCP, which is already monitoring the international market closely.

Business Recorder [Pakistan's First Financial Daily]
 
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$15 billion Pak-China trade target to be achieved, hopes Chinese foreign minister

BEIJING (April 26 2008): Chinese Foreign Minister, Yang Jiechi has expressed the hope that with the joint efforts of Pakistan and China, the goal of increasing trade volume to over US $15 billion would be achieved and the business ties would continue to grow.

In an interview with APP ahead of his visit to Islamabad that started on Friday, the Foreign Minister said that China and Pakistan "are partners for mutually beneficial economic co-operation." China, he said, greatly values its business co-operation with Pakistan and in recent years, continuous progress has been made in business and investment co-operation.

"Pakistan is the first country in South Asia that signed a Free Trade Agreement with China," he pointed out. The China-Pakistan Joint Investment Company, China's first overseas financial co-operation institution, has also started operation.

"I believe that with our joint efforts, the goal of increasing our trade volume to over US $15 billion will be achieved and our business ties will continue to forge ahead." Jiechi said: "Over the years, Pakistan has given firm support to China on Taiwan, Tibet, human rights and other issues that are crucial to China's core interests."

He said the Olympic torch relay that took place in Islamabad was a "great success." The event not only promoted the Olympic spirit, but also showed to the world the all-weather friendship between China and Pakistan, Jiechi said. "I am convinced that with the support of Pakistan and the entire international community, the Beijing Olympic Games will be a crowning success," he said.

He said that Pakistan had also played "a major and constructive role" in advancing the peace process with India and promoting regional co-operation in South Asia, thus making positive contribution to peace and development in the sub-region.

Regarding Pakistan's role in Shanghai Co-operation Organisation (SCO), the Chinese Foreign Minister said that as an observer in the SCO, Pakistan has actively participated in its activities in all fields.

"As an all-weather friend of Pakistan, we welcome Pakistan's desire to play a bigger role in the SCO," he said. Jiechi said that the admission of new members needs to be discussed and decided by all SCO members.

About China's contribution in South Asian Association for Regional Co-operation (Saarc), Jiechi said: "As a friendly neighbour of South Asian countries, China is ready to have dialogue and practical co-operation with Saarc on the basis of respect for the aspirations of Saarc members, equality, mutual trust and co-operation for win-win results, and play a constructive role in promoting Saarc co-operation."

The Chinese Foreign Minister said he would hold meetings with President Pervez Musharraf, Prime Minister Syed Yousuf Raza Gilani, Foreign Minister Shah Mehmood Qureshi and leaders of Pakistan's major political parties.

"We will exchange views on how to strengthen the China-Pakistan strategic partnership and promote the friendly co-operation between the two countries in various areas," he said. He said the visit was part of the friendly exchanges between China and Pakistan since the new government of the two countries took office.

Referring to the recent visit of President Pervez Musharraf to China, Jiechi said the visit added new dimensions to China-Pakistan co-operation and deepened the strategic partnership between the two countries. "China applauds the results of the visit," he observed.

Business Recorder [Pakistan's First Financial Daily]
 
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US officials review investment potential in Punjab

LAHORE (April 26 2008): The Economic Affairs Officer, State Department of United States, Shamila N Chaudhry and Antone C Greubel of the United States Consulate met with Punjab Commerce and Investment Secretary, Tahir Raza Naqvi on Friday to get a closer visual of Punjab govt's policy and investment potential in the province.

The secretary apprised the US officials of how the Commerce and Investment Department was working as a facilitator in tapping investment potential and working of various projects that were helping to materialise the government's vision of a prosperous Punjab.

Chaudhry said these projects and business avenues in Punjab could attract more investors from the US. Greubel said many companies from the US had already established their business in Punjab and more were joining in.

Business Recorder [Pakistan's First Financial Daily]
 
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LCCI and China Hardware Centre join hands

LAHORE (April 26 2008): The Lahore Chamber of Commerce & Industry (LCCI) and the China Hardware Centre (CHC) have mutually agreed to cooperate in promoting electrical and mechanical hardware and machinery. The agreement came between LCCI and the CHC at the sidelines of China Tools and Hardware Show in Jiangsu province where LCCI President Muhammad Ali Mian and Managing Director Zhou Caibing represented their respective organisations.

The Chinese also offered the chamber a free-of-cost venue for office use for two years and the latter agreed to forward the former with prompt, accurate and reliable purchasing information and trading service and investment opportunities available in Pakistan.

Business Recorder [Pakistan's First Financial Daily]
 
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