Pakistan Economy - News & Updates - Archive

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Textile industry grossly misused R&D funds: SBP governor tells ECC ​

ISLAMABAD (May 06 2008): State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar has informed the Economic Coordination Committee (ECC) of the Cabinet that the textile industry was grossly misusing the research and development (R&D) fund, and the government should review its policy of injecting billions of rupees for protecting this inefficient sector of the economy.

Sources said that while giving a report to the ECC on textile industry's performance during first 9 months of the current fiscal year in its last meeting, Dr Akhtar said that the government had provided the textile industry Rs 40 billion up to April 15 for R&D with a view to help it compete in the global market, and get more export share for the country. But its performance remained dismal during this period.

She presented Federal Bureau of Statistics (FBS) figures on exports, indicating over 3 percent negative growth, in support of her claim. The report indicated that Pakistan textile exports dipped by 3.14 percent in nine months to $7.765 billion from $8.017 billion for the same period of last year. Such a huge drop in textile exports resulted in serious repercussion on balance of payments as this sector traditionally contributes 67 percent to total exports.

Previously, the textile industry was enjoying refund and rebate facility on exports. However, this policy was discontinued in 2006-07 on reports that a number of inefficient textile units were getting huge fake refunds, misusing the facility.

The ECC took SBP Governor's views very seriously and asked the Ministry of Finance (MoF) to come up with some other strategy to help the textile industry to become more result-oriented to compete with other players in the world market in the future.

The textile industry's performance is a big question mark. Despite huge financial support from the government in different forms over years it has failed to deliver. Its share in exports is continuously declining. Many special packages granted for it, by the government, have simply gone waste.

However, the SBP Governor's activism on this industry seemed a new phenomenon. Being SBP Governor, she was an important member of Shaukat Aziz team and by opposing the idea in the beginning she could have helped in saving billions of tax payers' money spent on R&D of the textile industry.

Business Recorder [Pakistan's First Financial Daily]

 

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'Foreign investment to be encouraged in Sindh' ​

KARACHI (May 06 2008): The Sindh Minister for Information, Shazia Marri has said the Government will make all out efforts to encourage automobile, IT and Energy sectors of Pakistan. She was talking to a delegation of Japanese businessmen on Monday. The delegation informed the Minister that Japan was the second biggest economy of the world and around 10,000 people from Pakistan were engaged in the business sector of Japan.

They said the Japanese businessmen were eager interested in investment in various sectors of Pakistan and a Japanese company was already willing to establish a Automobile City either at Gawadar or in Karachi Port with an investment of dollars50 million.

Business Recorder [Pakistan's First Financial Daily]

 

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Korean team visits ID & BoI ​

ISLAMABAD (May 06 2008): A four-member Korean delegation visited Investment Division and Board of Investment (ID & BoI). Kim Kil Hwan, General Manager Sambu Pakistan (Pvt) Ltd; Erica Owen, In-House Lawyer; Choe Eyi Kyoung, Country Manager PDI and World Group LLC are the members of the delegation.

Ahmed Waqar, Secretary ID & BOI welcomed the Korean entourage and highlighted the policy parameters of investment in Pakistan. He underlined the policy which allows 100 percent foreign equity in the major sectors and full repatriation of profits and dividends in all the sectors.

Ahmed Waqar further explained that the average rate of return is almost 30 percent and in some cases up to 50 percent. The concept of SEZs and special incentives being offered was also projected with the emphasis on the Korean delegates to capitalise on this opportunity.

The delegation was explained that since the visit is on the short notice, it would be more fruitful when the Korean side may work out some specific sectors. So that in the next formal meeting Pakistani entrepreneurs and businessmen may also be invited for interaction and participation so as to generate investment and joint ventures between the two countries.-PR

Business Recorder [Pakistan's First Financial Daily]

 

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Dar briefs S&P about efforts to streamline economy ​

ISLAMABAD (May 06 2008): Finance Minister Muhammad Ishaq Dar has told the Standard and Poors, the credit rating agency, that Pakistan is making all efforrts to streamline the economy David T. Beers of Standard and Poors called on Ishaq Dar in Madrid on Monday, and discussed the macro-economic situation in the country, especially imbalances caused by food and oil prices, according to a message received here.

The Finance Minister apprised the credit rating agency of the government's efforts to streamline the economy. He said the next finance bill would definitely focus more on revenue generation, targeting subsidies for the poor and bringing the central bank borrowing in its place.

Ishaq Dar said: "We are focusing on credible database. Our special stress will be on agriculture and manufacturing sectors". He added that credit would be made available to these sectors with a view not to subsidising but for efficient management of these sectors.

For agency: "We are preparing an energy plan, but we need infrastructure support", he added. Dar stated that "our budget was doubly hit; one by increase in prices and the other by price adjustments." The subsidies were not budgeted properly in the past, he observed.

On the bond issue, the Finance Minister stated that "we still have appetite for the sovereign bond but the question is of the pricing. "Price has improved and we are considering the issue. We are not interested in exchangeable bonds", he remarked.

The Finance Minister also spoke about the current prices shocks being faced by the developing countries in general and the South Asian countries in particular. He stated that the achievements made so far by developing countries for MDGs might be eroded due to price increase in food and oil, and proposed the Saarc should discuss the issue in the forum to find out solutions.

On Pakistan's intervention, the Saarc forum was moved to consider the proposal, which was approved to become part of agenda of the next Saarc Finance Minister's meeting. Heads of the Nordic Investment Bank (NIB) and European Investment Bank (EIB) also held separate meetings with Ishaq Dar separately. Both the leading banks showed their keen interest in extending financial assistance to Pakistan.

The NIB showed its interest in providing financial support in power sector. Ishaq Dar welcomed the NIB's offer and invited them to finance hydel projects. To facilitate their investment, a financing framework agreement will be concluded between the NIB and Pakistan.

The EIB, which is a European Union investment institution, also expressed their desire to the possibilities of financing projects in Pakistan in viable public and private sector projects in infrastructure, industry, agro-industry, mining and services.

They expressed their keenness for partnership with other multilateral development banks, especially ADB with focus on electricity generation projects as co-financier in joint venture projects. Dar asked the EIB to finance hydel projects, especially Basha Dam, in a consortium with other banks and financial institutions.

He also asked the bank to help Pakistan in energy management, ie energy conservation and efficiency. A team, of HSBC also met the Finance Minister and discussed the possibility of HSBC's participation in the government bond issue and operations of HSBC in Pakistan.

State Bank of Pakistan Governor Dr Shamshad Akhtar also joined the meeting. The Finance Minister also appreciated the keenness of HSBC for the future government issues and their operation in the banking sector in Pakistan. He stated that the new government was making a policy review to avoid pressure on foreign exchange reserves in future.

"We are keen in medium to long term gains instead of short term benefits", he remarked. The HSBC team showed keenness in expansion of their operations in Pakistan. The SBP Governor stated that HSBC should also come into the small and medium enterprises (SME) sector.

She said that Pakistan was the most liberal regime in banking sector policy and regulations in the whole of Asia. The HSBC acknowledged that Pakistan was a great potential market for investment. Director General of Asian Development Bank Juan Miranda and his team also met the Finance Minister.

Miranda confirmed that ADB had already disbursed 300 million dollars and by June 2008, another up to 650 million dollars would be disbursed. The SBP Governor, who also attended the meeting, asked the ADB to provide 500 million dollars on Fast Track Basis for strengthening of the State Bank of Pakistan The Finance Minister ensured the ADB team that the reforms in the financial sector would be implemented as agreed with a the ADB.

Dr Shamshad Akhtar, Executive Director Sibtain Fazle Haleem, Ambassador Pakistan in Spain Humour Hasan, Joint Secretary of EAD Zafar Hasan Reza and Commercial Councillor in Pakistan Embassy in Madrid Basat Hayat Tarar also accompanied Ishaq Dar. The Finance Minister also attended a meeting of the Finance Ministers of the member countries of the South Asian Association for Regional Cooperation (Saarc) in Madrid on April 4.

He is currently in Madrid to attend the 41st annual meeting of the Asian Development Bank (ADB), which started on May 3. The meeting, to be concluded on Tuesday (May 6) was held on the sideline of the ADB annual meeting. Earlier two meetings were held in India in 2006 and Japan in 2007.

Business Recorder [Pakistan's First Financial Daily]

 

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Increase in exports government's top priority: Naveed ​

KARACHI (May 06 2008): Federal Industries and Production Minister Syed Naveed Qamar said here on Monday said that boosting exports is one of the prime objectives of the new government, as we have to work towards narrowing of the wide trade imbalance, said a press release of the Export Processing Zone Authority (EPZA).

He said: "I believe that we not only have to create new zones but also have to market the existing as well as the upcoming zones on the local and international horizon in an effective manner so that we may achieve our objectives." He emphasised that new zone should be built to meet the cut-throat competition in the global export industry. He said: "We not only need quality exports zones but we also require diversification in our exports and market them locally and internationally."

Naveed Qamar said that EPZs are the need of the hour to boost our exports and consecutively the economic development of Pakistan. "EPZA can help the government in achieving its exports targets, however, the overall potential of nearly all the EPZ's has not been utilised properly. On the issue exports targets, the minister said that there should be no compromise on this issue and these units should be given to all the owners of the non-operating units should meet all the commitments made by him.

He said that although the figures provided by the Authority are impressive, however there is tremendous room for improvement. Qamar said that the Authority has informed me that they have received a proposal to build IT Tower in Karachi, which is a very good idea as our neighbouring countries already have it. He assured the EPZA management that the ministry would support all measures taken up by the Authority to increase exports and investment in the country.

EPZA Chairman Kamran Y. Mirza briefed the minister that exports by the EPZA units increased by 18 percent in the first 10 months of the current fiscal year as compared to the same period last year.

He elaborated that in the current 10 months, the Karachi Export Processing Zone (KEPZ) export has registered an increase of 19 percent; Saindak EPZ 17 percent; Sailkot EPZ 43 percent and Risalpur EPZ 133 percent. The increase in exports by EPZ's units in Pakistan is partly attributed to a number of measures taken by EPZA to boost exports by stimulating the units located at the zones. Of the EPZA exports 71 percent was contributed by the garment industry followed by worn clothing, exports of trading goods, chemicals and allied products, PVC plastic/paper and machinery and engineering was 29 percent.-PR

Business Recorder [Pakistan's First Financial Daily]

 

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'$100 billion needed for infrastructure-related projects' ​

ISLAMABAD (May 06 2008): Pakistan needs around $100 billion for meeting infrastructure-related challenges, said Ijaz Ahmed Khan, CEO of Infrastructure Project Development Facility (IPDF), an agency working under Finance Ministry to look for public-private partnership in infrastructure development.

The country needs $22 billion for multipurpose water reservoirs, $20 billion for throw forward of infrastructure projects, $10 billion for maintenance of available resources, $18 billion for energy projects, $16 billion for transport and communication, $4 billion for urban mass transit (Karachi and Lahore metro), $2.5 billion for municipal services and $4 to 5 billion for health and education, physical planning etc, he said.

He was speaking at a workshop on public-private partnership (PPP) and municipal services, organised by IPDF here on Monday. The World Bank infrastructure specialist, Mihaly Kopanyi, said that Pakistan would have to spend 5 to 10 billion dollars to improve supply of drinking water, sanitation and solid waste management in cities. "This is a huge amount, and the government can manage it to a large extent by involving private sector in the development projects," he added.

"Our bank is ready to provide financing, but it will be the private sector investment, which will bail out the government to give better services in urban centers." He said that the WB was working with Pakistani authorities to devise institutional mechanism to improve infrastructure in five major urban centres of Punjab including Lahore, Gujranwala, Multan, Rawalpindi and Faisalabad, with a financial package of $300 million. The institutional mechanism will be put in place by September, 2008.

He said that on the basis of his research done in selected districts of Punjab no reliable data was available to analyse the provision of water, sanitation and solid waste management standards. He criticised the PC-1 exercise, saying that it did not provide complete details about the project.

Ghafoor Mirza, adviser to ministry of finance, said that the government realised the need to fill gaps between the demand and supply in infrastructure projects by involving the private sector.

He said that the government had established IPDF to develop a comprehensive public-private partnership (PPP) program, an important economic reform policy tool, for generating growth and closing gaps between the supply and demand of infrastructure requirements of the country. The main focus of the program is to financially assist and promote sustainable and viable projects by using the potential market forces that deliver critical goods and services to the people at affordable prices, he added.

Earlier, the World Bank's Operations Advisor, Said Al-Hasby, highlighted the importance of public-private partnerships as an integral reform policy tool to fund future infrastructure investment in the country.

Business Recorder [Pakistan's First Financial Daily]

 

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Turkish investment in power sector likely ​

PESHAWAR (May 06 2008): Turkish investors are likely to invest in the power sector in NWFP, said President of Sarhad Chamber of Commerce and Industry (SCCI), Haji Mohammad Asaf here on Monday. Addressing a press conference here after attending Euro-Asia investment summit at Istanbul, Turkey, he said a Turkish delegation was due to visit the province on May 8.

Which would be followed by a meeting of the Turkish Ambassador in Islamabad with the senior officials of the NWFP government. The SCCI chief was flanked by Senior Vice- President Inayat Khan, Vice-President Mohammad Nawaz Khan and former president Liaquat Ahmad Khan.

He said that the investment summit was attended by 22 countries, including five former presidents, three former prime ministers and representatives of the trade and industries ministers of the member countries. During the summit, Haji Mohammad Asaf said that he briefed the investors of the participating countries on the potential of investment in NWFP, particularly in the hydel power generation, marble, gems and jewellery and other sectors and invited them for investments in these sectors.

He said that a number of investors held meetings with him, and expressed interest in making investments in these sectors through joint ventures with the local businessmen. A delegation of the Turkish investors, he said, was due on May 8, which would be followed by the visit to Turkish Ambassador in Islamabad to the provincial metropolis. During the visit, he said the Turkish diplomat would hold meetings with both the Governor and Chief Minister of the province.

He announced that the chamber was going to celebrate its golden jubilee in a befitting manner from May 5 to 7. The Chief Minister Ameer Haider Khan Hoti would the chief guest at the golden jubilee function. The purpose of the function was to honour the founding presidents and their predecessors for their services for the business community of the province, he said.

Besides, the services of founding members of SCCI, including the Gul Muhammad Khan, Syed Phool Badshah, Syed Taj Mir Shah, Qazi Inayatullah, Haji Noor Elahi, Khwaja Muhammad Asif and Yousaf Ali Shah, who were no more with us, would also be recalled. He said he wanted to highlight the services of those who worked for the promotion of business and trade in the province and for the prosperity of people of the area.

Sarhad Chamber, fourth premier trade body of the country, established in 1958. During the ceremony, gold medals would also be awarded to all the former presidents of chamber, Asaf said. On the occasion, the SCCI will publish a special bulletin, containing complete life sketches of all those businessmen, who worked for the promotion of industry and trade in the province.

Business Recorder [Pakistan's First Financial Daily]

 

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'Talks on power import from Iran this month' ​

ISLAMABAD (May 06 2008): Minister for Water and Power, Raja Pervez Ashraf on Monday said negotiations between Pakistan and Iran for import of 1,000 MW electricity will be started this month. Talking to journalists here after attending the energy conservation walk, the minister said that Iranian Energy Minister will visit Pakistan on May 13 to discuss the technicalities and other aspects of power import.

He said that during recent visit of Iranian President to Pakistan, the issue was also discussed and it was agreed that the negotiation process will be completed as early as possible.

"We are also planning to get electricity from Central Asian States through Afghanistan to overcome the increasing power demand and supply gap," the minister said adding that several other proposals are also under consideration to improve power situation in the country.

Earlier, addressing the participants of power conservation walk, the minister said the present government will be in a position to control load shedding problem within three years while the government will try to improve the power situation within one and half year.

He said that the government has prepared long-term and short-term plans to generate power in the country including running power plants on rent and inviting private sector to invest in power sector. Raja Ashraf said, "we need some time to have efficient power generation system and for this present government is taking all possible steps."

He said that the past government didn't make any plan to generate electricity due to which the gap between demand and supply is continuously increasing. He directed the Pakistan Electric Power Company (Pepco) not to provide extra electricity to those wedding halls, which are not following the energy conservation plan and misusing the electricity in the name of decoration.

The minister announced that the ministry will provide scholarships for those school children who will play their role regarding energy conservation. He also appealed to the citizens to help government by playing their role in its energy conservation plan. Managing Director Pepco, Manawar Baseer directed all power distribution companies to follow ministry's energy conservation plan to overcome power crisis.

Business Recorder [Pakistan's First Financial Daily]

 

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Export of labour to Qatar ​

EDITORIAL (May 06 2008): The Federal Minister for Labour and Manpower, Khurshid Ahmed Shah, and his counterpart from Qatar currently on a visit to Pakistan, signed an additional protocol to the 1987 agreement between the two countries to regulate export of manpower to Qatar.

The additional protocol envisages the establishment of a joint committee which will undertake an annual review to facilitate Pakistani workers, increase the export of more people, skilled and unskilled, and rehabilitate those Pakistanis whose contracts have expired as well as to assist them to get their full benefits in terms of social security, wages and other emoluments.

Remittance income is a major component of our foreign exchange reserves and its contribution to provide balance of payments support is considerable. In 2006-07 the July-April figure for remittances was a hefty 4.4 billion dollars. Interestingly, the largest remittances are sent from the United States, accounting for 26.44 percent of Pakistan's total remittance income, followed by Saudi Arabia with a percentage share of 18.61 percent and United Arab Emirates is in third place accounting for 11.15 percent. Qatar in contrast accounted for 136.79 million dollars and its percentage share was 0.37 percent.

While comparatively speaking, Qatar's share is considerably less than that of other countries yet there is potential to improve in this regard. Hence there is need for the government to provide all-out assistance to the Qatar government to use Pakistani labour. That this new agreement is a reflection of that initiative must, therefore, be lauded. However while such agreements are demand driven and the actual supply of labour will be a function of what Qatar demands, yet from our end we can do a lot to ensure that we export more skilled labour relative to unskilled so that we can expand our remittance income from Qatar.

Pakistan remains largely an exporter of unskilled labour and, therefore, there is an urgent need for the government to ensure that vocational institutes that encourage the development of skills are set up with the objective of increasing our remittance income. In this context it is relevant to note that the government is planning to set up vocational institutes throughout the country in an effort to meet the demand for skilled labour internationally.

Two elements that may act as a deterrent need to be mentioned in this context: first and foremost, there is a need to carefully look at skills required by any country and the skills of the applicant. In many instances the applicant claims a skill set that he/she does not possess. This has led to many a foreign country reluctant to accept skilled labour from Pakistan. There is therefore a need for the government to make vigorous checks on the skills of each applicant.

And, second, the government has not really facilitated our overseas workers in spite of the fact that they contribute significantly to the country's foreign exchange reserves. In the Philippine, for example, the overseas Filipino workers are given special treatment at all airports and sea ports. It is imperative for the government of Pakistan to take similar measures in an effort to ensure that the overseas workers feel that they are valuable assets to this country.

Business Recorder [Pakistan's First Financial Daily]

 

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Switzerland to increase investment​

KARACHI: Swiss-Asia Chamber of Commerce, Switzerland expressed positive views on Pakistan as an area of investment, stressing on Pakistan’s geo-strategic location in Asia as one of Pakistan’s key assets.

According to a press release on Monday, Peter Zuellig, president, Swiss-Asia Chamber of Commerce along with Martin Benz, Swiss Consul General held a meeting with Waqar Malik, president Overseas Investors Chamber of Commerce and Industry OICCI.

They identified and discussed several other matters that would affect foreign investment in Pakistan, such as the overseas perception of Pakistan as constructed by the local and international media. They said in the coming years, their office would be looking towards encouraging more companies from Switzerland to invest in Pakistan and acting as a significant proponent of Pakistan as an emerging market for foreign investors.

Waqar Malik, accompanied by Secretary General OICCI, Ms Unjela Siddiqi briefed Zuellig and Benz on the role and ongoing activities of the chamber, contribution of OICCI members to the Pakistan economy and the role of Switzerland based companies amongst overseas investors.

There are about 15 Swiss OICCI member companies operating in Pakistan, representing a wide range of sectors, including pharmaceuticals oil, gas and energy. Switzerland contributes approximately 4.2 percent of FDI in Pakistan according to figures for the first nine months of the current fiscal year. Malik said the overall business climate in Pakistan is positive for foreign investors. However, Pakistan’s current law and order situation requires improvement.

He emphasized Pakistan has immense potential for growth and incentives to promote several area such as food processing, infrastructural development, engineering, information technology.

He stressed on the importance of perceiving low performing sectors and those areas with low investment as avenues for future business and development.

Daily Times - Leading News Resource of Pakistan

 

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ADB’s $214m for quake reconstruction​

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

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 Earthquake Reconstruction and Reconstruction Authority (ERRA) and will help expedite disbursement of housing compensation to the earthquake affected families. “This will enable people to complete reconstruction of their damaged and destroyed houses during the summer” said Peter Fedon, country Director of ADB in Pakistan. “We are committed to support 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.

ADB pledged $1 billion for reconstruction and rehabilitation, mainly in the housing, power, health, education, transport, and social protection sectors. 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 Rs 150,000 housing grant to each affected family has been a successful initiative. “The decision to let people take charge and build their own houses has been extremely useful in terms of assisting people rebuild their houses based on their own needs and time frame, using seismically compliant designs approved by ERRA” says Shaukat Shafi, senior ADB project implementation officer.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive and environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 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.

Daily Times - Leading News Resource of Pakistan

 

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‘World Bank to give $350m for development of 24 Punjab cities’​

ISLAMABAD: The World Bank will provide $350 million for the development of five large and 19 small cities of Punjab and a loan agreement is expected to be signed in September, World Bank Senior Infrastructure Specialist Mihaly Kopanyi said on Monday.

He said the bank would provide $300 million for the development of Lahore, Multan, Rawalpindi, Gujranwala and Faisalabad, and another $50 million for the development of 19 small cities of the province.

Kopanyi was talking to Daily Times at a two-day workshop on Public-Private Partnerships and Municipal Services organised by the Infrastructure Project Development Facility (IPDF) in collaboration with the World Bank. Kopanyi said the funds would be spent for the provision of basic services such as sanitation, solid waste management and water supply. He said the World Bank had finalised the policy and institutional framework for executing the programme and the implementation phase would start after the signing of the loan agreement with the Pakistani government.

Kopanyi said that $5-10 billion were required to develop all the big and small cities of the country, but a single institution or government could not provide such a huge amount. Finance Ministry Adviser Ghafoor Mirza told the workshop participants that effective policies were needed for the sustainable development of Pakistan’s infrastructure facilities.

Mirza said the government had set up the IPDF under the Finance Ministry in order to develop a public-private partnership programme for promoting growth and closing gaps between the supply and demand of infrastructure requirements of the country. IPDF Chief Executive Officer Ajaz Ahmed said that Pakistan immediately needed a $100 billion investment in physical infrastructure to improve the delivery of services and to enhance its internal and global competitiveness.

Earlier, World Bank Operations Adviser Said al-Hasby in his welcome address highlighted the importance of public-private partnerships in funding future infrastructure investments in the country.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan, Yemen to ink agreement on fisheries trade​

ISLAMABAD: Pakistan and Yemen are likely to sign an agreement, at Marine Fisheries department Karachi, for improving fisheries trade and quality.

The agreements will be signed Tuesday (today) at the concluding of 5th Pak-Yemen Joint Ministerial Commission (JMC). Officials who attended the meeting told Daily Times that Yemen asked for providing proper training to its people in Pakistan. During the technical session held here Monday between the two countries, it was decided to ink agreement in this regard. Both the countries are likely to sign several agreements in bilateral trade, labour and manpower, food and agriculture and many others after the conclusion of the two-day JMC today.

During the inaugural session of the JMC, Federal Minister for Privatisation and Investment, Syed Naveed Qamar stressed for diversifying two-way trade because significant opportunities existed for expansion of bilateral trade. “Our bilateral trade is about $80 million mark and has shown upward trend,” he maintained. The minister said Pakistan would increase cooperation with Yemen in the fields of education, science and technology, energy, transport, banking, labour and manpower.

The minister claimed that Pakistan had gained technical experiences in variety of fields that could be shared with the. Minister of Industries and Trade of Yemen Dr Yahya Y. Almutawakel represented the other side of the JMC meeting. The minister said there was a growing realisation on both sides for the need of increased cooperation for the mutual benefit of people of both countries.

He added that the visits of president and prime ministers of Pakistan to Yemen and President of Yemen to Pakistan in recent years have given opportunity to move forward in this direction. “Signing of a number of agreements between the two governments had provided a platform for meaningful cooperation between the two countries in the coming years,” he maintained.

About the JMC, the minister said it would provide an institutional framework to adequately address those obstacles, which impede economic and commercial ties between the two countries. “For further fostering the economic and technical relations between our two brotherly countries, it would be necessary that the JMC meets regularly and that its recommendations are followed through”, he remarked.

Pakistan, he said that over the years, has successfully produced highly competitive and value added products, such as garments, pharmaceuticals, engineering goods, agricultural machinery and electronic equipment. “ We would be happy to meet Yemeni requirements in these fields. Pakistan is today being rated as a country most conducive for foreign investment”, he added.

The minister said that in the present scenario of market based and deregulated global economy, the private sector’s role in boosting bilateral trade relations was crucial.

“It is imperative that our governments facilitate interaction and collaboration between the private sectors of the two countries. Regular exchange of information on the facilities and incentives provided by each side would be an important first step in this direction”, he remarked.

Almutawakel said bilateral trade between Pakistan and Yemen in the year 2006-07 was $77 million and Yemen would welcome the imports from Pakistan for further enhancing the trade between the two countries.

Daily Times - Leading News Resource of Pakistan

 

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Maybank Banking On Pakistan Expansion

HONG KONG - While most Western banks are taking a pause from expansion to solve their credit problems at home, Malayan Banking is accelerating its acquisition ambitions, in an attempt to strengthen its regional footprint. Malaysia's biggest lender said Monday it would buy up to 20% of Pakistan's MCB Bank for $933 million, its third takeover in the region in two months.

Malayan Banking (other-otc: MLYBY - news - people ), widely known as Maybank, said in a filing with the stock exchange in Kuala Lumpur on Monday that it had agreed to buy 15% of MCB Bank, Pakistan's fourth-largest bank by asset value, for 2.17 billion ringgit ($685.5 million). Maybank also has secured the right to buy an additional 5% stake in MCB Bank for a maximum of $247 million from three other institutional investors, potentially bringing its ownership up to 20%.

"It is an attractive opportunity for us to enter a high growth and profitable market. It is extending Maybank's reach in South Asia," in line with its plan to become a key regional player, Chief Executive Abdul Wahid Omar of Maybank told reporters. Volatility in the global financial markets notwithstanding, Pakistan's economic outlook remains steady, and there is "limited execution risk," he added.

The deal, which will be completed by the end of June, is expected to provide an opening for Maybank to expand into Islamic banking, retail services, credit cards and small-to-medium enterprise banking in Pakistan. MCB Bank has 1,026 branches, including eight Islamic banking branches within Pakistan and six branches outside the country, with a deposit base of about. 280 billion Pakistani rupees ($4.3 billion) and total assets of around 300 billion Pakistani rupees ($4.6 billion), according to the bank's Web site.

Seeking prospects beyond its maturing home market, Maybank recently stepped up the pace of regional acquisitions. It announced last month it had agreed to acquire a 56% stake in Bank Internasional Indonesia, that nation's sixth-largest bank, from Singapore's state-directed Temasek Holdings and South Korea's Kookmin Bank (nyse: KB - news - people ) for 4.8 billion ringgit ($1.5 billion). The bank will also make a tender offer for the remaining 44.3% shares of Bank Internasional Indonesia (other-otc: PKIDF - news - people ) for approximately 3.8 billion ringgit ($1.2 billion), bringing the total value of the potential acquisition to about 8.6 billion ringgit ($2.7 billion).

Shortly before the Indonesian acquisition, Maybank bought a 15% stake in Vietnam's An Binh Commercial Joint Stock Bank for cash considerations of approximately 430 million ringgit ($136.1 million). Maybank said it might take up an additional 5% equity stake in the near future, pending approval by the Vietnamese government

Maybank Banking On Pakistan Expansion - Forbes.com

 

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KARACHI: EIA of Karachi circular railway being planned

KARACHI, May 5: The Karachi Urban Transport Corporation has initiated the process of carrying out the Environment Impact Assessment of the Karachi Circular Railway project, it has been reliably learnt.

The KUTC, which is the executing agency of the KCR, has invited organizations with the relevant experience to submit proposals so that they could be entrusted with the task of carrying out the EIA.

Sources told Dawn that a team of Japanese experts was in the city, carrying out a study on the projected number of passengers who would be using the KCR in the future.

They said the KCR was being revived with Japanese technical as well as financial assistance and the project work on the ground was expected to be started in June 2009.

They added that the project was expected to be completed in three years, give or take a few months.

Under the project, a 50-kilometre-long dual track would be laid and all the 18 level crossings would be replaced either with overhead bridges or underpasses so that electric trains running at around 100 kilometres per hour, with an interval of five minutes between two trains, could complete their journey without any hindrance, the sources said.

They added that the KCR was expected to require around 45 megawatts for its train operations.

The sources said that the project was being financed by Japanese assistance of over $ 870 million, with an interest rate of 0.2 per cent a year. The amount is payable in 40 years, with a grace period of 10 years.

The sources said that besides the 44-kilometre-long old route of the circular railway that connected Karachi City station with Drigh Road and passed through Lyari, SITE, Nazimabad, Manghopir, Gulshan-i-Iqbal and also ran parallel to the main line from Karachi City to Landhi, a six-kilometre-long new underground track would also be laid to connect the Jinnah Terminal with the Drigh Road station.

They said that since the KCR passed through the congested and thickly populated areas of the city, the entire track would be fenced so that people living near the track were not harmed by the fast-moving trains.

They said that more than 240 eight-coach trains would be transporting around 700,000 passengers from early morning to midnight daily between the 26 stations, which would be connected by the buses so that people could easily get to the station from their homes or places of work.

The fare would be fixed in accordance with the prevailing bus fare and was expected to be around Rs15, they said.

The sources said that the city’s population, which at the time of independence had been around 300,000, was, according to some estimates, now touching the 15-million mark and while the number of passengers was increasing at a rate of seven per cent, vehicles on the roads were increasing at the rate around 17 per cent, choking the already over-burdened road network.

Tracing the history of the KCR, they said that the system had been conceived in the late 1950s and was started in 1964. It touched its peak in 1984 when over 104 trains operated daily, carrying over six million passengers annually.

The so-called transport mafia was said to have manipulated the government or decision-makers in such a way that less and less resources were allocated for its infrastructure improvement, with the result that the system collapsed in 1999 when only two trains were being operated, leaving the commuters at the mercy of the transport mafia.

The sources said that another mass transit system of trams, which had transported a large number of commuters in the congested areas since pre-partition days, also succumbed to the onslaught of the transporters and collapsed in the early 1970s.

Following squeals of protests by commuters, the government reactivated the main-line portion of the KCR in 2005 with just 10 trains. However, the number of trains dropped over the years and at present around four trains were being operated.

Representatives of the Sindh government, the city government and the Pakistan Railways are on the board of the directors of the KUTC, which would be run by a managing director on a day-to-day basis.

Responding to Dawn queries, KUTC managing director Nasreen Haque said that the government was giving the KCR its due priority and things had started to move. She said the road network was already choking and with the number of vehicles growing fast it would be almost impossible to move around the city in the next few years without a rail-based mass transit system.

KARACHI: EIA of Karachi circular railway being planned -DAWN - Local; May 06, 2008