Pakistan Economy - News & Updates - Archive

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Squeeze in spending to contain fiscal deficit​

A MAJOR cut in the development spending and $3 billion capital inflows including quick loan disbursements by international financial institutions is expected to help contain the surging fiscal deficit.

Sources said that a further Rs40-50 billion cut is envisaged in the Public Sector Development Programme (PSDP), which earlier was slashed by Rs70 billion by the PML (Q) government.

Talking to Dawn Federal Finance Minister Ishaq Dar said that $1.5 billion was expected from the World Bank (WB), Asian Development Bank (ADB) and the Islamic Development Bank (IDB). Another $1 billion will come as foreign direct investment (FDI) and rest will be secured from international financial markets.

“This funding will help us maintain our fiscal deficit at 6.5 per cent of the GDP against the original target of four per cent set for 2007-08”.

Mr Dar said the World Bank had frozen its assistance during the PML(Q) government for presenting unreliable economic data and various other budgetary figures In the joint World Bank/IMF annual meetings held last month, he was told to stick to four per cent fiscal deficit target. “But I informed them it was not possible and that they should not expect fudging of figures from us as was done by the Shukat Aziz government”.

Eventually, Mr Dar said he convinced particularly the World Bank officials on the issue. I am glad to tell you that the World Bank has now decided to resume its usual annual assistance to Pakistan”.

He, however, said that new resources would have to be mobilized for the budget 2008-09 through rationalisation of existing taxes and widening the narrow tax base. He regretted that the tax-to-GDP ratio was currently less than 10 per cent of the GDP. Untaxed sectors would have to be brought under the tax net to improve country’s financial health.

Taxing agriculture income and the services sector were important issues which would be decided with mutual understanding of the coalition partners, he said while responding to a question.

The finance minister also hinted at the possibility of withdrawing various subsidies and exemptions in the next budget. He said only targeted subsidy would be offered to the poor.

“We are identifying five million poor families i.e. around 30 million people to be offered certain relief in the next budget”, Mr Dar said.

Only the deserving people will get the targeted subsidy particularly on food items. This could also include food stamps. He said adding some credible method would be adopted to identify vulnerable groups to be offered some specific relief in the budget.

Mr Dar said he would not rely on Zakat Committees, and would collect data about the poor from the credible sources all political parties trust.

Attracting investment was another important area which would get due importance in the next budget. The government would look into extending necessary incentives to attract increased investment particularly foreign investment

Chief economist of the ABN Amro Bank Saqib Sherani, when approached, said the conventional wisdom demanded that the current fiscal crisis should be tackled by taking timely decisions. The new government needed to first rationalise its expenditures and take sufficient revenue raising measures in the next budge..

He was of the view that economic stability was equally important like political stability and, therefore, it must get full attention of the new coalition government.

To a question, he said IFIs’ timely support could help solve some of the pressing financial problems of the government during the current financial year. But for 2008-09, the government should introduce new taxes to improve its revenue collection.

He said capital gain tax on stock exchanges and equities must be levied in the next budget and that the issue must not go unnoticed by the coalition government if it was serious at all in solving the financial problems. “Then tax on real estate transactions, should be introduced besides bringing services sector into the formal tax net”, he said.

Mr Sherani also called for announcing tax on agriculture income in the budget. He did not believe that all the segments of society deserved subsidies including on oil consumption. Only the targeted subsidies should be given to the poor.

A senior economist in the Policy Planning Cell of the ministry of labour and manpower, Dr Zafar Moeen Nasir, was of the view that the government should revamp its taxation system to plug leakages and levy tax on farm incomes..

Squeeze in spending to contain fiscal deficit -DAWN - Business; May 05, 2008

 

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Rs140 billion capital eroded over political concerns​

AFTER having jealously guarded the index level above the barrier of 15,000 points for the last several months, the KSE 100-share index broke through it last week as investors were not sure about the political scenario amid conflicting legal interpretations of the judges’ issue. The index quoted at 14,956.82 point last week, eroding 140 billion from the market capital and 478 points from it.

Stocks, therefore, fell throughout the week but erosion were generally creeping and seldom attained proportion of panic or hasty selling, analysts said and added that bulk of the selling was from foreign investors who wanted to get out of the market fearing confrontations between the power contenders.

However, most of the overvalued shares did pass through successive lower locks on selling without finding many buyers. The market showed guarded optimism to the reported break-though in Dubai talks on the issue of judges.

Earlier, the deadlock on judges’ issue between the PPP and PML-N adversely affected the trading and share values fell like the house of cards on selling triggered by fears of collapse of the coalition government at the centre.

The KSE 100-share index breached through the barrier of 15,000 after several months and was last quoted at 14,956.82 points, off 478 points or 4.5 per cent, eroding well over Rs140 billion from the market capital. The KSE 30-share index also shed 636 points at 18,011 points.

The market passed through another lean week as pruning operations were well sustained on the overvalued counters despite higher corporate earnings and payouts by most of the leading companies. Even sharp recovery staged by MCB, the market continued to erode ground in the absence of fresh support.

Some technical factors and negative reports from the political front contributed to the extension of the sell-off, although it was well-absorbed on certain leading counters.

The weakness of the rupee has a close relationship with the share business as both provide safe haven to each other at the time of an impending crisis, but when both are under pressure the weaker link suffers the most, said a leading analyst Hasnain Asghar Ali.

That was why the market failed to extend the early run-up as unofficial devaluation of the rupee against the dollar by about Rs5 inspired both the local and foreign investors to sell off their shares.

“We are trapped by the double-edged weapon of declining share values and depreciating rupee and the continuous erosion in the value of our savings compels us to sell”, said a leading stock analyst Faisal A.Rajabali.

The opening, however, was on the higher side on active follow-up support aided partly by higher dividend and partly to active foreign buying in the leading oil shares, reflecting that investors had ignored the reports of fresh probe into the market crash of March 2005.

An idea of strong early buying euphoria may well be had from the fact that the KSE index crossed the barrier of 15,500 and was close to breach through the next barrier of 15,600 at 15,595.13 before bears fought back.

The interesting feature was that unlike the price movements in normal trading, there were odd changes in some of the leading shares, mainly in Indus Motors which witnessed a rise of Rs16.59, PPL Rs.6.07 and BOC Pakistan Rs5.98.

The fact that the index had earlier sustained over the last couple of weeks, its newly established base above 15,000 points reflected that it could rise further to its new target supported by positive news from political and corporate fronts, but news from Dubai worked against it and it fell below the barrier.

“The budget is still five weeks away possibly in the first week of June, most of the feelings originating from the relevant quarters about taxing the share business, the investors’ morale was high”, said a leading stock analyst Ashraf Zakaria said.

The firm opening despite negative news including reopening of investigation into the March 2005 market crash, which wiped out Rs700 billion from the savings of small investors, by the finance committee, and delay in the announcement of restoration of superior judiciary to the Nov 3 position, investors seem to be inclined to go by the market fundamentals at least for the time rather than any other immediate depressant, analysts said.

Higher interim dividend by OGDC and Fauji Fertiliser at 22.5 per cent and 35 percent respectively and some others did encourage fresh buying, keeping the market in a good shape.

Working results and EPS of some leading banks including Askari, Allied and United Bank were on the lower side of the analysts, but they failed to have a negative impact on the overall market trend perhaps owing to higher return to its shareholders by Bank Alfalah.

Positive earning reports from some other leading companies are due and indications are that the market could sustain the current levels.

Forward counter: Barring MCB, Engro Chemical and others, which managed to on-balance higher, other leading shares on the cleared generally fell under the lead of Bank of Punjab, Nishat Mills, OGDC, Pakistan Oilseeds, and some others amid active two-way activity. –Muhammad Aslam

Rs140 billion capital eroded over political concerns -DAWN - Business; May 05, 2008

 

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Qatar to hire 30,000 Pakistani workers ​

ISLAMABAD (May 05 2008): The Gulf state of Qatar would hire 30,000 skilled and semi-skilled workers from Pakistan this year. In this regard, an additional protocol has been signed pertaining to the existing labour agreement, which was inked between the two countries in 1987 to regulate export of manpower to Qatar.

The agreement was signed by Federal Minister for Labour and Manpower Khursheed Ahmed Shah and the visiting Qatar Minister for Labour and Social Affairs, Dr Sultan Bin Hassan al Dhabit al Dousari. This agreement will provide an opportunity for more people to be accommodated in Qatar and also in rehabilitating those Pakistanis whose contracts expire subsequently.

It will also help those workers who, after the expiry of their contract, or otherwise, will be able to get their full benefits in terms of social security, wages or any other emoluments being their legal dues.

Under the articles of the additional protocol, it will be a step forward to ensure additional employment opportunities in Qatar, and it will be reviewed once a year through a joint committee to facilitate Pakistani workers.

Talking to media, the Minister said that around 75,000 Pakistanis are working in Qatar so far. Under this agreement, he said, 'We would send 30,000 workers to Qatar in 2008". Khursheed said that HE would soon visit Qatar to discuss matters relating to export of IT experts, doctors and engineers.

He said that Qatar has been demanding skilled manpower, "but we are facing a shortage of trained workers due to discontinuation in policies during last many years".

However, the government is making a plan to set up more vocational institutes countrywide to train workers to meet requirements of international labour markets, he added. He said that the government was also making a comprehensive plan to curb child labour through education and financial aid.

The Minister said that he would visit Saudi Arabia on Monday to discuss the Haj policy with the Saudi government. The new Haj policy would be announced in near future, he added. He said that Haj would be expensive this year due to growing oil prices in the international market.

The Qatar government is committed to invest more than $2 billion in Pakistan. It is now the fastest growing economy in the world, and is in the process of building up its infrastructure. The major sources of Qatar are liquefied natural gas (LNG) and oil.

Business Recorder [Pakistan's First Financial Daily]

 

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SMEs seek incentives to increase exports ​

SIALKOT (May 05 2008): World trotters have introduced Sialkot as total export-oriented city of Pakistan. Since this place possesses century old industrial heritage. It has developed a remarkable export culture over the period and contributing more than 900 million dollars to the national exchequer annually.

Still the exporter community is trying its utmost for doubling the export volume despite of tough competition in the world market for fetching valuable foreign exchange for the country.

Undoubtedly, the Small and Medium Enterprise (SMEs) were playing a significant role not only in strengthening the national exchequer but also providing employment to thousands workers in Sialkot.

In order to develop true and secure "Small and Medium Culture" of Sialkot the government should formulate a special package of incentives and concessions for SMEs of the area for increasing the export volume to many folds and to redress their problems.

The development of cottage industries in Sialkot has assumed a model status for the developing world. The city is sprinkled with thousands of small and medium enterprises, which are engaged in honouring their global commitments for export of valve-added quality goods such as sports goods, surgical instruments, leather goods, gloves, badges and musical instruments etc.

Business Recorder [Pakistan's First Financial Daily]

 

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Foreign investors remit $580m profit, dividends ​

Tuesday, May 06, 2008

ISLAMABAD: Foreign investors remitted $580 million profit and dividends during the first nine months of the current fiscal with the biggest outflow of $126.5 million from the power sector followed by communications ($88.2 million) and oil and gas exploration sector with $60.5 million.

During July-March 2007-08, total outflows of $580.1 million were about 5.1 per cent more than what it was recorded in the corresponding period of the last fiscal ($551.8 million), the State Bank of Pakistan (SBP) said on Monday.

Independent economists believe that for a country like Pakistan, huge drain of foreign exchange looks very disturbing as it has already been facing a potential threat of burgeoning current account deficit (CAD) continuously for the last couple of years.

During the period under review, the CAD jumped to an alarming $10.26 billion which is about 60 per cent more than the corresponding period of the last fiscal ($6.41 billion). They question whether an investment is coming for a manufacturing unit which will create jobs, increase production and augment exports or a service unit with limited options like mobile telephones that have to be imported in large numbers along with supportive equipment.

The answer to the question is to be found that whether investment will promote exports or help in import substitution as the country needs more exports and greater import substitution so that the import bill could be reduced.

If it is a manufacturing unit, will it depend on imported raw materials or use the local raw materials? the country has already a huge raw materials import bill, which it cannot afford to expand unless the exports increase.

At the moment, these outflows are overshadowed by huge quantum of inflows but, in the long-run, the quantum of outflows could exacerbate balance of payments. Can the government be able to sustain inflows in the shape of privatization proceeds about which the government is very confident and how long it would keep on privatizing its state-run entities?

There would be one point where all these inflows would dry then what would be the alternate source to finance current account deficit. However, now the government had inclined to receive proceeds through Global Depository Receipts (GDR) which is not a true

http://www.thenews.com.pk/daily_detail.asp?id=110775

 

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privatization because it not is even qualifying the definition of privatization. ​

Tuesday, May 06, 2008

Interestingly, foreign investors find the country an attractive destination, as they are allowed to invest in any sector and bid for any privatized enterprise. Besides, there is no limit to the profit they can make and they can repatriate 100 per cent of the capital anytime and remit their total profits to their countries.

Though, it is very pleasing for the country to receive large foreign direct investment (FDI), but painful aspect of this growth is raising outflow of profits/dividends in foreign exchange.

As during the FY2006-07, such outflows on account of remittance of profits and dividends to foreign investors’ countries of origin amounted to $804.2 million against $504.4 million in FY2005-06.

Power sector, especially thermal stood at the top of the list with highest profit and dividend remitted by the foreign investors to their countries was $126.5 million last year during the same period it was $102 million.

Communication and financial business sectors which due to high profit ratio have proved as a magnet for foreign investors form these sectors; investors remitted about $88.2 million and $52.1 million respectively.

Unfortunately, these sectors create not sizeable jobs or help in incensing country’s exports. Outflow in terms of profit and dividend during the period under review from oil and gas exploration sector was $60.5 million, petroleum refining ($48.2 million), chemicals ($29.4 million), tobacco and cigarette ($27.3 million), food ($21.69 million), pharmaceuticals and OTC products ($19 million), transport ($15 million), trade ($14.4 million), transport equipment (automobiles) ($13.8 million), food packaging ($5.8 million), cement ($5.6 million), storage facilities ($5.1 million), personnel services ($2.5 million), tourism ($2.4 million) and from textiles sector these investors remitted $1.4 million during the period under review.

According to economic experts, due to outflows, the current account deficit and fiscal deficit (twin deficits) may have a significant impact on the value of the rupee, a matter attracting keen attention around the country.

http://www.thenews.com.pk/daily_detail.asp?id=110776

 

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Pak citiesneed $10bn for infrastructure: WB ​

Tuesday, May 06, 2008

ISLAMABAD: The World Bank (WB) has estimated that Pakistan’s cities require $5 to $10 billion for improving water, sanitation and solid waste management facilities in order to meet its future challenges.

“The World Bank is ready to provide financing on the basis of demand, but the private sector will have to be involved to improve municipal services in major urban centers,” Mihaly Kopanyi, Senior Infrastructure Specialist, the World Bank said while talking to selected group of journalists after attending a workshop on Public Private Partnership (PPP) and Municipal Services. The workshop was organised by the Infrastructure Development Financing Facility (IPDF) at the WB office here on Monday.

He said that the WB was working along with Pakistani authorities to devise an institutional mechanism to improve infrastructure in five major urban centers of Punjab including Lahore, Gujranwala, Multan, Rawalpindi and Faisalabad.

“The institutional mechanism will be in place by September 2008,” he hoped and added that the World Bank had committed $300 million for improvements in Punjab. Earlier, during his presentation in the workshop, he criticised the PC-1 exercise, saying that it did not provide complete details about the project.

On the basis of his research done in a few districts of Punjab, the WB official said no reliable data is available to analyse the situation that exists on the ground related to provision of water, sanitation and solid management.

The IPDF CEO, Ijaz Ahmed Khan said that Pakistan requires $100 billion for meeting infrastructure related challenges in the future.

Elaborating on the $100 billion need, IPDF CEO said that the country requires $22 billion for multipurpose water reservoirs, throw forward of infrastructure projects which are $20 billion, maintenance backlog $10 billion, other energy projects $18 billion, transport and communication (National Trade Corridor, shipyards, NHA, Railway) $16 billion, urban mass transit (Karachi and Lahore metro) $4 billion, municipal services $2.5 billion and health and education (physical infrastructure) $4 to $5 billion.

“The Government of Pakistan realises the need to fill gaps between the demand and supply of infrastructure in a manner that leverages private resources as far as possible and yields optimum benefits for every rupee that the government spends,” stated Advisor, Ministry of Finance, Ghafoor Mirza, in his opening remarks at the inaugural session of the workshop.

Ghafoor Mirza said that the Government of Pakistan has established IPDF under the umbrella of the Ministry of Finance, in order to develop a comprehensive PPP programme, an important economic reform policy tool, for generating growth and closing gaps between the supply and demand of the infrastructure requirements of the country.

Pak citiesneed $10bn for infrastructure: WB

 

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SACC terms Pakistan area of investment ​

Tuesday, May 06, 2008

KARACHI: Swiss-Asia Chamber of Commerce President Peter Zuellig and Swiss Consul General Martin Bienz have described Pakistan as an area of investment due to its geo-strategic location in Asia.

The dignitaries held a meeting with Waqar Malik, President of Overseas Investors Chamber of Commerce & Industry (OICCI) they identified and discussed issues of mutual interest that will positively affect foreign investment in the country.

They said in the coming years their office will look towards encouraging more companies from Switzerland to invest in the country and acting as a significant proponent of Pakistan as an emerging market for foreign investors.

Malik emphasized Pakistan has immense potential for growth and incentives to promote several areas such as food processing, infrastructural development, engineering, and information technology. He stressed he importance of perceiving low performing sectors and those areas with low investment as avenues for future business and development.

SACC terms Pakistan area of investment

 

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ADB releases $214m for reconstruction ​

Tuesday, May 06, 2008

ISLAMABAD: The Asian Development Bank (ADB) on Monday released $214 million to the Government of Pakistan under the Earthquake Displaced People Livelihood Restoration Programme.

The ADB said the amount is the second tranche of a $400 million loan aimed at helping Pakistan meet the rebuilding cost of about 585,000 rural houses damaged or destroyed in the earthquake.

“The funds being provided to the ERRA will help expedite disbursement of housing compensation to the earthquake-affected families and will enable people to complete reconstruction of their damaged and destroyed houses during summer,” said Peter Fedon, Country Director of ADB in Pakistan on Monday.

“We are committed to supporting the government’s efforts in meeting the reconstruction challenge all the way through, building on the strong momentum in the reconstruction process and we will continue to assist ERRA until the job is done,” he added.

The ADB pledged $1 billion for reconstruction and rehabilitation, mainly in the housing, power, health, education, transport and social protection sector. To date, ADB has committed about $820 million in loans and grants and leveraged another $100 million in the form of bilateral grant funds from its co-financing partners Australia, Belgium, the European Union, Finland, and Norway.

Rebuilding of over half a million destroyed or badly damaged rural houses was a phenomenal challenge, however, the decision by the Government to provide a Rs150,000 housing grant to each affected family has been a major successful initiative. “The decision to let people take charge and build their own houses has been extremely useful in terms of assisting people in rebuilding their houses based on their own needs and time frame and using seismically compliant designs approved by ERRA” says Shaukat Shafi, senior ADB project implementation officer.

ADB, based in Manila, is trying to reduce poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members ñ 48 from the region. In 2007, it approved $10.1 billion of loans, $673 million of grant projects, and technical assistance amounting to $243 million.

ADB releases $214m for reconstruction

 

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Cement sales increase by 24pc ​

Tuesday, May 06, 2008

KARACHI: Cement sales during the first 10 months (July-April) of fiscal year 2008 depicted an increase of 24 per cent to stand at 24.5 million tonnes due to growing local demand and increasing cement shortage in the region leading to higher exports.

Export sales have shown a commendable increase of 142 per cent while local dispatches saw a rise of 8 per cent during the period. Similarly, a 23 per cent growth was witnessed in April 2008 on a year-on-year (YoY) basis, mainly driven by a 157 per cent surge in exports and 1 per cent increase in local cement sales, JS research reported.

Cement exports are expected to remain buoyant as significant cement shortage exists in regional countries like India and the UAE, while South Africa is looking to import cement in order to meet its demand and to check rising cement prices. Local cement sales are also likely to pick up due to private sector projects and infrastructure development.

On the contrary, on a month-on-month (MoM) basis (Apr 2008 over Mar 2008), total cement sales have shown a decline of 16 per cent in Apr 2008. Exports have decreased by 11 per cent and local sales have shown a dip of 17 per cent. This considerable decline in cement dispatches during Apr 2008 is attributed to the seasonal slow down in construction activities during the harvesting season. Labor force as well as transportation is not available in the harvesting period that causes construction activities to decline, negatively impacting the cement demand.

Cement sales increase by 24pc

 

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Pak Suzuki plans to assemble Euro-II cars​

KARACHI, May 5: A leading auto assembler is lobbying ahead of the new budget for the permission to import Euro-II compliant auto parts from India at zero rated duty for manufacturing cars with Euro-II engine locally.

However, the local auto vendor industry has strongly opposed the assembler’s move in a meeting of the sub committee of the Auto Industry Development Committee (AIDC) held last week in Islamabad at the Engineering Development Board (EDB).

Sources in the auto sector said that Pak Suzuki Motor Company Limited (PSMCL) has floated this proposal because India’s Maruti Suzuki also produces the same model with Euro II engines.

Despite the fact that trade with India is not allowed in the auto sector, the local company is looking forward for the approval ahead of the next budget.

An official in the EDB, who asked not to be named, also said that the PSMCL had taken up this issue but the decision cannot be taken overnight.

The matter would again be discussed in the high-level meeting of the AIDC but it will not be an easy decision because it is a major shift from one technology to another.

He added that the local vendors had been strongly resisting this proposal.

Members of Pakistan Association of Automotive Parts and Accessories Manufacturers, on condition of anonymity, said that the Euro was an advance technology and environmental friendly but the models especially produced by Suzuki in Pakistan are decades old.

They said that a vending base had developed but it cannot be transformed abruptly without taking the local vendor industry into confidence.

They said that they would not tolerate the import of Indian auto parts. If the PSMCL is interested in bringing Indian parts they can procure it from other sources at the 35 per cent duty rate for completely knocked down kits (CKD) under the Tariff Based System (TBS).

Vendors said that the PSMCL knows that the Suzuki car prices would shoot up in case Euro-II parts are imported at 35 per cent duty, that’s why they are keen for import from India at zero rated duty because Japan does not produce Euro-II compliant parts.

They said Pakistan did not have the infrastructure like green fuel for Euro-II compliant cars. They added that the Japanese manufacturer should think of a joint venture between the local vendors and the Indian vendors in producing Euro-II engines and its parts rather than directly importing them from India. Vendors also said that other Japanese manufacturers had opposed the Pak Suzuki’s proposal.

Besides, assemblers of bikes and a local tractor manufacturer have also sought permission to import of Euro II compliant parts from different sources.

Meanwhile, a car spare parts maker said that the vendors of Honda were already perturbed after the launching of new Honda VTI last year in which most of the parts are imported.

“In the previous model I was supplying 15 auto parts but in the new model the company is taking only one part,” he said.

Pak Suzuki plans to assemble Euro-II cars -DAWN - Business; May 06, 2008

 

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Pakistan’s economic growth hailed​

DUBAI, May 5: His Highness Sheikh Nahyan Bin Mubarak Al Nahyan, chairman of the Abu Dhabi Group, hailed Pakistan’s economy for growing steadily at an impressive rate. A wide range of reforms enacted in the country helped it to achieve high levels of economic growth.

“The confidence of the private sector is high and international investments are increasing,” he said.

He was addressing at the first Middle East-Pakistan Agriculture and Dairy Investment Forum held at Madinat Jumeirah on April 29 where investors, institutions and entrepreneurs gathered with high expectations of billions of dollars in new investments in Pakistan’s agriculture and dairy sectors.

He said aagriculture is crucial to Pakistan’s economic prosperity and Investment opportunities in this sector are attractive, says a press release.

Federal Minister for Investment Naveed Qamar said that the government was willing to facilitate investments and remove any bottlenecks that investors might encounter.

Pakistan’s economic growth hailed -DAWN - Business; May 06, 2008

 

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Rs1.2trn revenue target in new budget​

ISLAMABAD, May 5: The Ministry of Finance has given a revenue collection target of Rs1.2 trillion to the Federal Bureau of Revenue (FBR) for the fiscal year 2008-09 and asked it to identify new sectors for taxation, including the levy of capital gains tax on property and stock markets.

Informed sources told Dawn on Monday that a 15 per cent increase in revenue was being projected in the next budget. A relief package for the poor will also be announced in the budget. The coalition government has failed to announce the package before the budget because of the precarious financial position.

The sources said the government had suffered a revenue shortfall of Rs35 billion and had to revise the annual collection target from Rs1.025 trillion to Rs990 billion for the fiscal year 2007-08.

“The government plans to collect Rs210 billion more in the next financial year to achieve the 15 per cent growth in revenue,” the sources said.

Representatives of stock markets on Monday met officials of the Ministry of Finance and FBR and opposed the levy of capital gains tax. They said that except for India, no country in South Asia and South East Asia had ever imposed such a levy on bourses.

The sources said that the current two per cent Capital Value Tax on property was likely to be increased in the budget to improve government’s weak funding position.

The ministry has also asked the FBR to finalise its exercise of determining the total wealth of the country with a view to taking into account the revival of wealth tax.

However, the government had no plans to revise upward the income tax exemption of Rs150,000, the sources said. Some officials in the ministry believe that it is on the higher side and needs to be revised downward to increase the revenue during the next financial year.

FBR chief Abdullah Yousuf confirmed to Dawn that a 15 per cent growth in revenue was being projected in the budget. He said a number of new areas would have to be explored to increase the revenue collection.

He expressed the hope that the government would succeed in achieving the new resource mobilisation in 2008-09.

Rs1.2trn revenue target in new budget -DAWN - Top Stories; May 06, 2008

 

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Kamal says he is in US to seek investment​

WASHINGTON, May 5: Karachi City Nazim Mustafa Kamal said on Monday that he had come to the United States to urge American businessmen to invest in his city.

“We have built the infrastructure. We have created facilities. Now we need investment,” the mayor told Dawn. “Yes, there is a risk factor but we are here to convince the businessmen that it is a risk worth taking.”

The mayor’s visit to Washington led to widespread speculations in the media, particularly in Pakistan, that he is here on a mission to strengthen President Pervez Musharraf.

Some reports also claimed that the US was trying to put together an alliance of like-minded parties to back the next political set-up in Pakistan should the PML-N quit the government.

Even CNN -- in a brief interview with Mr Kamal -- noted that the MQM leader had come to the United States at a time when America’s friendship with Pakistan ‘isn’t exactly what it was’. A power shift and Pakistan’s new relationship with extremists is testing that bond. So the State Department was working to build bridges with Pakistan’s future, the report added.

CNN’s State Department correspondent Zain Verjee noted that Mr Kamal had received star treatment at the State Department and that “the mayor of Karachi is a guest with a mission”.

“It is not my domain,” said Mr Kamal when asked if he was here for talks aimed at strengthening President Musharraf. “I was not here to discuss this sort of things. My role remains confined to Karachi. I had no political talks.”

A State Department spokesman, when asked to comment on Mr Kamal’s meetings with officials at the department, said: “If you are looking for an ulterior motive, there’s none.”

The mayor’s 40-minute meeting with Assistant Secretary Richard Boucher was his only at the State, said the official.

“Mr Boucher talks to a lot of people,” said the official. “They had met in Pakistan a month ago when Mr Boucher visited Karachi. We got word that he was in town, wanted to come by, say hello to Mr Boucher and present an album of his trip to Karachi.”

Mr Kamal also denied having a hidden agenda. “All I can say is that Karachi is a very important city and has a very strategic role to play in Pakistan,” said the mayor. “People are realising Karachi’s importance. We have developed that city and now we are seeking investment.”

He said that the US State Department had helped arrange his meetings with the American business community and officials in various cities. He has already met the mayors of Chicago and Houston and the deputy mayor in Washington. In New York, he has a series of meetings with potential investors and is also meeting the board of directors of the world’s largest stock exchange.

Kamal says he is in US to seek investment -DAWN - Top Stories; May 06, 2008

 

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Cement exports rise to record six million tons ​

KARACHI (May 06 2008): The cement sector has marked another record of exports, which showed a healthy growth of 142 percent to the level of around 6 million tons due to rising international demand for the commodity, industry sources said. They said that it is expected that by the end of the current fiscal year cement exports would exceed 7 million tons.

Business Recorder [Pakistan's First Financial Daily]