Pakistan Economy - News & Updates - Archive

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By Ron Synovitz

Mottaki speaking to the press in Tehran in January(Fars)
PRAGUE, May 25, 2006 (RFE/RL) -- Iranian Foreign Minister Manuchehr Mottaki met in Islamabad today with Pakistani Prime Minister Shaukat Aziz. Mottaki said the goal of his two-day visit to Pakistan is to improve communications and bilateral relations -- particularly in the area of trade.


"We should remove all the obstacles from the legitimate point of the views -- or any other obstacles which are there -- to make the relations between our two countries transparent," he told journalists.
The Nuclear Program
The international controversy over Iran's nuclear program is one issue that complicates that relationship.
Islamabad has been under pressure from the United States and other Western governments since the UN's nuclear watchdog confirmed that a black-market network linked to Pakistan's top nuclear scientist, Abdul Qadeer Khan, provided Iran with uranium-enrichment technology.
After meeting with Mottaki today, Aziz said Iran has the right to develop nuclear technology for peaceful purposes and under the guidelines of the International Atomic Energy Agency.
Aziz added that the international dispute over Iran's nuclear program should be settled through dialogue rather than military action.
With those positions enunciated, Mottaki's talks then moved on to details about how trade relations between Iran and Pakistan can be improved.
Iran-Pakistan-India
A top item on the agenda is a proposed multibillion-dollar Iran-Pakistan natural-gas pipeline that could be extended to India. Plans call for a link from Iran's abundant gas reserves to provide India's booming economy with about 150 million cubic meters of natural gas per day for 25 years.
Energy officials from Iran, Pakistan, and India met earlier this week in Islamabad to discuss the plan.
The project is opposed by the United States.
Ahmed Waqar, the permanent secretary at Pakistan's Petroleum Ministry, says Islamabad's decision about whether to go ahead with the proposed pipeline depends upon Pakistan's own needs and interests.
"We need energy," Waqar said. "And Iran is one of [the] sources of energy. And any decision in this regard, I would repeat, has to be taken keeping in view the national interest."
Pakistan and India also have long disputes of their own to resolve before the proposed pipeline can be extended into India from a regional distribution hub in Pakistan.
Outstanding Issues
One dispute is over a coastal strip of marshland between India's Gujarat state and Pakistan's Sindh Province. The exact demarcation of the border there has been disputed by both sides since 1947 when Pakistan and India gained independence from British rule.
Talks between India and Pakistan on that border issue began today in Islamabad as part of the composite peace dialogue.

Indian Petroleum Secretary MS Srinivasan says the pipeline -- which could pass through the marshy border region -- is vital to India's national interests:
"We consider that this project is necessary and important to us in order to meet our growing energy needs and our requirements," Srinivasan said. "And our national interest will determine the progress of the project."
Another unresolved issue is how much Islamabad would charge for the transit of Iranian gas deliveries to India. Officials from all three countries plan to meet in New Delhi in July to try to reach agreement on a gas pricing mechanism.


http://www.rferl.org/featuresarticle/2006/05/82df390b-c121-4a0f-af53-59f56e1d51b4.html

 

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ISLAMABAD (updated on: June 01, 2006, 16:39 PST): Prime Minister Sahaukat Aziz has said the government is determined to secure national integrity, solidarity and people besides ensuring economic sovereignty and geo-political stability with national pride and dignity.

He said this while addressing 30th convocation of the National Defence College here on Thursday.

The Prime Minister said our vision for Pakistan is to have a developed, industrialized, just and prosperous country through accelerated and sustainable development by developing knowledge inputs.

To accomplish this vision, he said, the government is working on enhancing economic competitiveness, ensuring minimum credible deterrence capability in defence, innovations, improving peoples skills besides building their faith in government and strengthening communities and civil society.

Shaukat Aziz said the government under the leadership President Pervez Musharraf is striving hard with dedication and honesty to achieve the goals of a prosperous Pakistan and now benefits of economic successes made by the government are giving meaningful gains to all segments of the society.

He said we believe in development in dignity and development in equity.

He said the government is pursuing on a policy to accelerate development in all fields and for this purpose a development programme of four hundred fifteen billion rupees will be launched during the next financial year with major thrust on infrastructure to ensure energy, water and food security and improve social sector.

Turning to national defence he said Pakistan has not any ambition to have the status of great power nor wish to engage in arms race with any other country but it cannot ignore its defence requirements which is vital for peace and stability in the region.

He said besides ensuring minimum credible deterrence Pakistan is also in favour of regional strategic restraint regime in strategic and conventional weapons. At the same time he said Pakistan also believes in use of nuclear technology for peaceful purpose and meet energy requirement through it under IAEA safeguards.

On foreign relations, Shaukat Aziz said Pakistan is keen to promote peace and cooperation with its neighbours by resolving all outstanding issues. For this purpose, he said, Pakistan is engaged with India in composite dialogue process with a particular focus to resolve the core issue of Kashmir according to the wishes of the Kashmiri people.

He said with Afghanistan we share ties of history, culture and religion and we are committed for promoting peace and security in that country as peace and stability in that country is in the strategic interest of Pakistan.

He said Pakistan's position on Iranian nuclear issue is very clear that it should be resolved only through diplomacy.

Shaukat Aziz said Pakistan enjoys very close and friendly ties with China and we are proud on our relations with that country. He said we intend to provide energy and trade corridor to China and India to meet their energy requirements.

He also expressed satisfaction over Pakistan's relations with the United States, European Union as well as Russia and Japan and said these relations are beneficial bilaterally and are contributing towards ensuring regional stability and security.

Congratulating the passing out graduates, Shaukat Aziz described participation of the foreign military officers as a good omen and a source of strength for promoting interfaith and inter-culture harmony the world over.

In his welcome address Commandant National Defence College Lt. General Raza Muhammad Khan highlighted the activities of the College regarding training facilities to the higher leadership of military, civil bureaucracy and politicians besides officers of the friendly countries.

Overall one hundred and forty one graduates from Pakistan and friendly countries including Bangladesh, China, Germany, Saudi Arabia, United States, UK and Middle East were awarded Master's degrees in defence and strategic studies and war studies.

 

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ISLAMABAD (June 01 2006): The National Economic Council (NEC) on Wednesday approved provision of Rs 415 billion for Public Sector Development Programme (PSDP) for 2006-07, which would include Rs 270 billion federal and Rs 115 billion provincial PSDP and Rs 50 billion to be spent on reconstruction and rehabilitation of earthquake-hit areas of NWFP and Azad Kashmir. The NEC meeting was presided over by Prime Minister Shaukat Aziz.

The federal PSDP has an operational shortfall of Rs 20 billion. Prime Minister's advisor on Finance, Dr Salman Shah, State Minister for Finance Omer Ayub Khan, Planning Commission Deputy Chairman Dr Akram Shaikh, provincial chief ministers, finance ministers and federal and provincial finance secretaries attended the meeting.

Dr Akram Shaikh, briefed the media men about NEC's decisions. He said the government has introduced a new concept of development with dignity and equity and it would increase dependence on local resources for financing the developmental projects.

He said that Rs 132.5 billion has been allocated for infrastructure; Rs 130.8 billion for social sector; and Rs 6.7 billion for other areas. He said that the NEC has allocated Rs 10 billion for initial work on five dams announced by President Pervez Musharraf. These are Munda, Basha, Kalabagh, Akhori and Sakurdu Katzara dams.

Akram said that the 2005-06 PSDP utilisation was around Rs 193 billion, and the government was now strengthening its system to even better PSDP utilisation in the future. According to the PC deputy chairman, 260 of 1512 projects and schemes were completed during the outgoing fiscal year. He said with Rs 115 billion PSDP provinces would have more resources to undertake developmental projects and schemes in 2006-07.

The overall size of the proposed PSDP is 35.6 percent higher than the current year and the federal PSDP reflects an increase of 29 percent in education, 20 percent in health, 25 percent in IT, 39 percent in Science and Technology, 15 percent for special areas and 100 percent in Khushhal Pakistan Fund (KPF).

He said that economic growth consecutively for the fourth year has reduced poverty from 34.46 percent in 2000-01, to 23.9 percent in 2004-05; urban poverty declined from 22.7 to 14.9 percent and rural poverty from 39.26 to 28.1 percent.

Dr Akram said that per capita income has risen to $847, registering a growth of 14.1 percent. He said the government spent Rs 1332 billion on poverty related sectors over the past five years and 5.82 million new jobs were created in the past 18 months, which brought unemployment rate down from 8.3 percent in 2001-02 to 6.5 percent in 2005.

He said that government policies in livestock sector registered a healthy growth of 8 percent, growth in large scale manufacturing showed an increase at 9 percent, services sector showed at 8.8 percent with major contribution from finance and insurance (23 percent), private sector investment grew by 31.6 percent and public sector investment by 46.7 percent. Exports increased by 17.8 percent and imports by 40.4 percent during 10 months of the current fiscal year. Foreign private investment reached $3.376 billion which was the highest ever in Pakistan's history so far.

According to Dr Shaikh, inflation was slightly below 8 percent as on April 30; public debt as percentage of GDP declined from 100 percent in 1999-2000 to 54.7 percent in 2005-06, well below the target set in the Fiscal Responsibility Law. Workers remittances stood at $3.63 billion, showing an increase of 5.2 percent over last year corresponding period and foreign exchange reserves at $13.1 billion as on May 13.

 

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ISLAMABAD (June 01 2006): Pakistan's budget deficit has expanded to Rs 201.35 billion (2.70 percent of GDP), up by 0.60 percentage point, in the third quarter (July-March) as compared to Rs 131 billion (2.1 percent) in the corresponding period of last fiscal year.

This big increase in the budget deficit in absolute and percentage terms would leave little room to allocate enough resources for public welfare programs in the budget for 2006-07 to be announced on Monday. It would also force the government to expand its external and domestic borrowing to bridge the deficit.

According to the latest data released by the Ministry of Finance on 'Consolidated federal and provincial budgetary operations' for July-March 2005-06, the government's total expenditures stood at Rs 935.66 billion, including unidentified expenses of Rs 55.72 billion, whereas its revenue receipts totalled at Rs 734.30 billion.

It is pertinent to note that out of the total expenses, the government spent only Rs 204.15 billion or 21.82 percent for the Public Sector Development Programme (PSDP). A huge sum of Rs 787.295 billion, or more than 84 percent was consumed by current expenditures. The Defence expenditures were Rs 175.82 billion during this period.

After analysing and comparing the fiscal data of three quarters with that of a year ago, two important things emerged. First, the budget deficit is higher than what it was-2.7 percent--against 2.1 percent of the GDP. Secondly, the amount of unidentified expense is much larger than what it was--Rs 55.72 billion--against Rs 23 billion.

On the positive side, the expenditure on 9-month PSDP during the period of this fiscal year is higher than the same period of last fiscal year. This indicates a change for better in the government's policies but much depends on actual utilisation of PSDP allocations. The actual utilisation of the PSDP in the first ten months of this fiscal year was about only 73 per cent.

CURRENT EXPENSES: Of the current expenses of Rs 787.295 billion in July-March 2005-06, Rs 314.25 billion went to general public services of the federal government, including Rs 139.58 billion on domestic debt servicing and Rs29.21 billion on foreign debt servicing.

The defence sector devoured Rs 175.82 billion, expenses on public order and safety affairs ate up Rs 13.93 billion, and economic affairs consumed Rs 41.46 billion. The government somehow managed to spend Rs 11.67 billion on education affairs and services, but the most vital health sector received only Rs 3.33 billion. Worse still, the government spent only Rs 1.204 billion on social protections (direct relief to the poor) and a negligible sum of Rs 73 million on environmental protection. The Rs 3.33 billion spending on the health sector meant that this sector's share in the overall current expenses was 0.4 percent in the first three-quarters of this fiscal year. Similarly, Rs 73 million spending on environmental protection comes to 0.009 percent of total current expenses.

According to the data the federal revenue collection during nine months was Rs 734.30 billion. Rs 518.38 billion was tax collection and Rs 31.58 billion were collected in lieu of petroleum and gas surcharges that include Rs 15.88 billion as petroleum development surcharge and Rs 15.70 billion from gas development surcharge. The non-tax revenues stood at Rs 184.34 billion during the July-March period of current fiscal.

The data further say that the federal government had transferred Rs 198.03 billion to the four federating units (Punjab, Sindh, NWFP and Balochistan) as provincial share in federal revenues under the 5th National Finance Commission (NFC) Award, during the first nine months of the current fiscal.

The provincial revenues of the government of Punjab amounted to Rs 144.15 billion against the expenditures of Rs 156.1 billion during the first nine months (July-December period) of the current fiscal year. Punjab received Rs 97.89 billion as revenue share from federal taxes as NFC Award share during these three-quarters of 2005-06.

The total revenue of the government of Sindh stood at Rs 84.61 billion and the total expenditures of the province remained at Rs 79.71 billion during the period. It received Rs 63.60 billion as NFC Award share in the federal taxes from the federal government.

The total revenues of the NWFP amounted to Rs 42.49 billion and total expenditures of the province stood at Rs 52.88 billion. The NWFP government received Rs 21.45 billion from the federal government during the said period.

The total revenue of the government of Balochistan stood at Rs 23.38 billion and the total expenditure of the province remained at Rs 27.1 billion during this period of the current fiscal year. The provincial government received a sum of Rs 15.093 billion from the federal government.

 

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ISLAMABAD (June 01 2006): The Central Board of Revenue (CBR) has collected Rs 600.63 billion in 11 months from July to May 2005-06, against Rs 500.54 billion collected in the same period of last fiscal year, reflecting an increase of 20 percent.

According to the provisional figures issued on Wednesday, direct tax collection was Rs 178.125 billion, against Rs 146.409 billion of last year, showing an increase of 21.7 percent. The indirect taxes stood at Rs 422.509 billion, against Rs 354.135 billion of last year, showing an increase of 19.3 percent.

As a result of the collection made so far, the CBR now has to collect Rs 89.37 billion in June, the last month of the current fiscal year to achieve the target of Rs 690 billion. Sales tax collection has been Rs 256.1 billion against Rs 207.8 billion of last year, showing a growth of 23.2 percent.

The GST collection at the import stage is Rs 150.75 billion against Rs 131.5 billion, showing increase of Rs 19.25 billion. The sales tax collection on domestic consumption is Rs 105.3 billion against Rs 76.3 billion with a growth of 38 percent.

The collection of customs duty is Rs 116.734 billion in July-May 2005-06 against Rs 99.329 billion of last year, depicting a growth of 17.5 percent. The collection of federal excise duty (FED) is Rs 49.74 billion against Rs 47.05 billion, showing an improvement of 5.7 percent.

Latest tax-wise details show Rs 75.77 billion paid as refund/rebate to exporters during this period, against Rs 92.45 billion of last year, showing a decrease of Rs 16.68 billion.

The Board paid Rs 30.36 billion as GST refund in July-May 2005-06 against Rs 53.11 billion of last fiscal year, showing a decrease of Rs 22.75 billion. The payment of sales tax refund at the import stage was Rs 89 million against Rs 50 million reflecting an increase of Rs 39 million. The domestic refund stood at Rs 30.26 billion against Rs 53.06 billion paid in the same period last fiscal year, showing a decrease of Rs 22.8 billion. The customs department paid Rs 17.11 billion as rebate/duty drawback against Rs 14.56 billion showing an increase of Rs 2.55 billion.

Direct taxes refund totalled Rs 28.07 billion during eleven months against Rs 24.72 billion in the same period of 2004-05, reflecting a growth of Rs 3.35 billion.

The collection during May was Rs 53.655 billion. Following is the monthly break-up of individual taxes: Sales tax collection Rs 27.49 billion; customs duty Rs 11.23 billion; direct taxes Rs 10.54; and FED Rs 4.4 billion. During this month, CBR paid refund/rebates of Rs 3.92 billion, including Rs 1.14 billion as sales tax refund.

 

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WASHINGTON (June 01 2006): Moody's has upgraded Pakistan's foreign currency ceiling by two notches from B2 to Ba3, which experts interpret as an acknowledgement of Pakistan's improved economic parameters.

This is in the light of new methodology adopted by Moody's in its ratings procedure.

The new rating for Pakistan is above average. It has not only been raised but the new outlook on Pakistan's Ba3 foreign currency debt is described as 'stable'.

Moody's has implemented a new approach to foreign currency country ceilings for bonds and notes that better reflects the risk that a foreign-currency government bond default would be accompanied by a moratorium on foreign currency external payments.

In respect of foreign currency bonds, the rating reflects positively on the prudent economic policy of Pakistan in choosing to honour domestic savers.

On Pakistan's moratorium risk, the Moody's report talks of traditional "interventionist nature" of policies pursued by Pakistan in the matter of economy. It is appreciative of the present government, saying, "We believe that the risk of imposing a moratorium is lower than such a policy tradition would indicate."

http://www.brecorder.com/index.php?...&term=&supDate=

 

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ISLAMABAD (June 01 2006): Two public sector corporations suffered losses or failed to meet their revenue targets because of higher oil prices at international level while Pakistan Steel Mills registered profit during the third quarter (January-March) of the current financial year.

This is the gist of quarterly statistics released by the Ministry of Finance on Wednesday on three major corporations, namely, Pakistan International Airlines, Pakistan Railways, and Pakistan Steel Mills. It did not include the financial operations of Wapda, or Karachi Electric Supply Corporation (KESC), which has been privatised.

The data suggest that actual deficit of Pakistan Railways increased by Rs 1,236 million due to decrease in operating revenue by Rs 832 million and increase in expenditure by Rs 404 million.

Railway revenue receipts were less Rs 832 million than the projected targets, mainly because of Rs 68 million and Rs 465 million decrease in earnings from passengers and cargo, respectively, and decrease in military traffic and sundry earnings by Rs 34 million and Rs 286 million, respectively.

The shortfall in freight earning was due to less offering of oil traffic. As far as sundry earning is concerned, various agreements are in the pipeline and the expected earning in this regard has not yet been finalised.

Revenue expenditure was more than the target by Rs 404 million due to increase in fuel prices since July, 2005 and revision of pay scales of government employees from July 2005.

The increase in fuel cost also adversely affected the profitability of PIA, as against the target of Rs 207 million, the airline sustained a huge loss of Rs 2.09 billion. PIA generated Rs 16,840 million revenue against the target of Rs 18,550 million. PIA is making efforts to achieve the target in future.

The airline's expenditure was Rs 19,836 million against the target of Rs 18,757 million, showing an increase of 5.75 percent, which was mainly due to upward trend in fuel prices. The increase in expenditure was due to sharp increase in fuel cost, increase in traffic/ramp handling, catering, cockpit crew salaries, crew layover, aircraft rental and interest payments.

The Pakistan Steel Mills had projected a net profit of Rs 531 million for the third quarter of 2005-06. However, it earned only an amount of Rs 18 million, which was much less than Rs 531 million projected profit.

The PSM set a target at 90 percent capacity utilisation during the 3rd quarter (January-March, 2006), but it attained 68 percent utilisation, which was 22 percent less than the projected capacity utilisation.

The company said that capital repair for various operational units of the Mills, including coke oven batteries, has not yet been completed. Therefore, the targets set for the production during the quarter had not been achieved.

Total sales and the other income were projected at Rs 8264 million for the quarter January to March, 2006, whereas the mills sold its items valued Rs 6978 million, which is Rs 1286 million, less than that of its target.

The cost of production for the 3rd quarter was projected at Rs 7446 million, and the mills incurred the expenditure of Rs 7438 million, which is slightly less than that of the target fixed for this purpose.

The major variations appear in the spending on purchase of raw material, which is 40 percent less than that of the projected amount, and other spending, regarding the making of adjustments of Rs 1505 million, against the projected amount of Rs 195 million.

 

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KARACHI (June 01 2006): Pakistan is an exciting strategic new market for The Body Shop and offers us a great opportunity to enter the Indian Subcontinent. In a statement issued here on Wednesday, the regional director of 'The Body Shop' for Europe, Middle East and Africa, Alastair Kerr said.

"We believe our unique combination of naturally inspired products and commitment to our five core Values will prove compelling for Pakistan consumers, while our newly branded shop look will create a fresh and inspiring shopping environment".

"Furthermore we believe the successful existing partnership between The Body Shop and Cosmetics Trading LLC in the United Arab Emirates provides a strong foundation for developing The Body Shop brand in Pakistan. Cosmetics Trading LLC has the expertise, infrastructure and resources to allow us to establish our brand in this part of the world". Managing Director, of Cosmetics Trading Company Pvt Ltd, Andrew Knappett said "We believe The Body Shop will stand out from other cosmetics brands and retailers in Pakistan and will secure a strong profile in this developing cosmetics market".

"We are very pleased to have the opportunity to work with The Body Shop in such a promising market", he added. Director, of The Forum Shopping Mall, Yameen Sheikh said, "We are always looking to offer our customers the best shopping experience possible and we believe 'The Body Shop' store exceeds this".

The Body Shop International Plc. has launch its unique skincare and cosmetics brand in Pakistan. The Body Shop brand in Pakistan under the name Cosmetics Trading Company Private Limited.

 

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ISLAMABAD (May 31 2006): Pakistan and the United Arab Emirates on Tuesday vowed to further strengthen ties in all spheres with particular focus on boosting relations in economy and trade, and defence and security, besides investing in mega infrastructure development projects.

The two countries also signed three Memorandums of Understanding (MoUs) for co-operation in development of mega infrastructure projects and permission to the Dubai Islamic Bank to operate 50 branches in Pakistan.

The signing of the MoUs was witnessed by Vice President and Prime Minister of United Arab Emirates Sheikh Mohammad Bin Rashid Al-Maktoum and Prime Minister Shaukat Aziz here at Prime Minister House. The two leaders earlier had an exclusive meeting.

It was followed by a second round, in which their aides joined and discussed wide-ranging issues. The first MOU was signed between the Ministry of Ports and Shipping and Emmar Properties for development, improvement and modernisation of infrastructure here.

Under the agreement, Emmar Properties would participate in joint ventures for development of mega residential, commercial, leisure and real estate projects, industrial parks, free zones and port terminals. The MoU was signed by Minister for Ports and Shipping Babar Khan Ghauri and Emmar Properties Chairman Muhammad Ali Abbar.

The second MOU was signed for development of Karachi Beach Front and was signed by Minister for Ports and Shipping Babar Khan Ghauri and Sultan Ahmed Bin Sulayem of 'Dubai World'.

The third MCJU pertained to investment in mega infrastructure projects, and was signed by Umar Ahmed Ghuman, Minister of State for Privatisation and Investment, and Sultan Ahmed Bin Sulayem of 'Dubai World'.

The UAE ruler, who was on a day-long visit, discussed the whole gamut of their relations and decided to further strengthen co-operation in diplomatic, economic, political, defence and security fields.

The Prime Minister invited the investors and businessmen from the UAE to tap the tremendous real estate potential in Pakistan and bid for various infrastructure projects in Pakistan including roads, rail and ports.

UAE is the largest investor in Pakistan and has shares in Pakistan Telecommunication Company Ltd (PTCL), airlines, financial business, real estate and tractors. It has invested over $2.5 billion in different projects in the country.

The UAE side expressed desire to further increase its investments in the country to build a world-class infrastructure.

The Prime Minister said that Pakistan was "delighted" that Dubai Islamic Bank was expanding its operations in Pakistan, and said that it would further strengthen business ties between the two countries.

Trade between the two countries totalled $2.76 billion last year, with the balance in "favour of the UAE' due to Pakistan's import of oil and oil products.

Vice President and Prime Minister of United Arab Emirates Sheikh Mohammad Bin Rashid Al-Maktoum and Prime Minister Shaukat Aziz earlier also had an exclusive meeting where they discussed the situation in the region, challenges "facing the Ummah and bilateral relations".

Prime Minister Aziz said the two countries enjoyed common faith, culture and history and expressed resolve to further strengthen ties between the two countries.

The two leaders also agreed that the OIC provides an ideal platform to project the true image of Islam and also to promote its message of interfaith, inter cultural and inter civilisation harmony.

They underscored the need to dispel the misgivings and misperception about Islam through concerted and united efforts by the Ummah. Shaukat apprised the Ruler of Dubai of the regional situation in the context of Pakistan's relations with India, Afghanistan and Iran.

He said that the composite dialogue with India was going apace and added that Pakistan wants the process of dispute management to move to dispute resolution to arrive at an early settlement of the Kashmir dispute.

He said that Pakistan desired a resolution in keeping with the wishes of the Kashmiri people to establish sustainable peace in South Asia.

The Prime Minister said that Pakistan is a peaceful country, committed to promoting peace and prosperity in the region by maintaining minimum credible deterrence.

About Iran's nuclear issue, the Prime Minister said Pakistan desires a settlement through dialogue and is against use of force. He said Pakistan recognises Iran's right to use nuclear technology for power generation under IAEA's safeguards, but made it clear that Pakistan was opposed to its acquisition of nuclear weapons. The Prime Minister said Pakistan would continue to support the Afghan government and believes in a strong and stable Afghanistan. He said Pakistan is keen to expand its trade and economic ties with Afghanistan and countries of Central Asia. He said Pakistan's trade with Afghanistan was growing rapidly and has risen to $1.5 billion.

The Prime Minister said Pakistan's energy requirements were growing and it was exploring the possibility of constructing gas pipelines from Iran to Pakistan and onward to India besides one from Turkmenistan via Afghanistan, Pakistan and India.

The Prime Minister congratulated Sheikh Mohammad Bin Rashid Al Mukhtoum on his assumption of the office of the Prime Minister and ruler of Dubai.

He also paid tributes to late Sheikh Makhtoum Bin Rashid Al Makhtoum and said that people of Pakistan look with admiration the tremendous progress made by Dubai under his wise leadership.

The UAE Prime Minister said that Pakistan, its leadership and the people of Pakistan were held in high esteem in the UAE and that Pakistan was the first country outside the GOD to be visited by him.

The UAE Prime Minister said the large numbers of Pakistanis working in Dubai were hardworking and making useful contribution to "the growth and development of Dubai.

Shaukat Aziz also hosted a banquet for the UAE Prime Minister.

The UAE leader said he had useful discussions both with President General Pervez Musharraf and the Prime Minister, and there was commonality of views on several matters.

He said Pakistan was open for investment and appreciated the investment friendly policies of the country. He said this would create more employment opportunities for Pakistanis.

Prime Minister Aziz said the signing of the MoUs would go a long way in strengthening economies of the two countries and said closer ties between the two private sectors would generate economic activity and create more jobs.

The UAE Prime Minister was given a warm welcome, when he arrived here at the PM House. National anthems of the two countries were played and a contingent of the armed forces presented him a guard of honour. The UAE dignitary also planted a sapling at Shakarparian.

 

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KARACHI, May 31: Mobile users are likely to have many more choices in near future as some new foreign players are planning to enter the rapidly growing Pakistan mobile market shortly.

The local mobile phone industry is abuzz with reports that China Mobile is locked in talks with the parent company of Paktel while an unidentified foreign investor is said to be negotiating with Arfeen Group, the operator of Instaphone.

China Mobile Communications is close to finalise $5 billion deal to acquire Millicom International Cellular SA of Luxembourg, which is the parent company of Paktel.

Sources in the telecom industry said that the management of Instaphone was now searching for new investors so that the service could be re-launched with renewed vigour in next few months.

The Pakistan Telecommunication Authority (PTA), the watchdog of the telecom sector, was reported to have approved the deal between Arfeen Group and Millicom under which Arfeen Group had become 100 per cent owner of Instaphone by acquiring remaining 65 per cent share.

Sources said that the group was in talks with various foreign companies and it is likely to strike a deal with investors this month. However, sources added that Instaphone was likely to be re-launched in September or October this year.

Instaphone will shift from Time Division Multiple Access (TDMA), almost equal to Global System Mobile (GSM) or second generation (2G) mobile technology to third generation mobile technology (3G) or Code Division Multiple Access (CDMA), the sources said.

They said that the aggressive media campaign of Instaphone had already been suspended for the last few months as the management had seized the marketing budget.

Besides, the company faced severe competition coupled with declining profits with the entry of Telenor and Warid Telecom besides Mobilink and Ufone as many customers had shifted to these companies.

However, Instaphone still has around 40,000 retail outlets all over the country but the number of new phone subscribers has definitely shrunk owing to frequent changes in the package, calls rates and various deals being offered by new and old mobile phone operators.

The real decline in Instaphone service users had started in 2004 owing to obsolete technology being used by the operator. It was the first cellular company which entered the Pakistani market in 1990s, but now has the lowest customer-base around 500,000 users and of these 50 per cent belong to Karachi only.

Millicom had entered Pakistan in early 1990s. It had owned two cell phone operators — Paktel and Instaphone — with local telecom partners but it had offloaded its share of Instaphone to Arfeen Group.

Reports say that talks are still going on for buying Millicom by China Mobile, which would be biggest overseas acquisition by a Chinese company.

According to reports available here the state-run China Mobile has built one of the most extensive national cellular networks in the world, covering all of mainland China. With more than 250m wireless customer accounts, the company is by far the world’s biggest wireless carrier and controls about two-thirds of the mobile market in China. Millicom has nine million customers in 16 countries of Asia, Latin America and Africa.

Pakistanis are well of aware of Chinese electrical and electronic equipments, toys, motorcycles, computers, stationary items, children garments, etc. A year back Chinese mobile phones have caught the attention of price conscious customers owing to their cheaper prices. Pakistani market has already leading players like Nokia, Sony Ericcson, Samsung, Motorola, LG, Siemens, etc.

It may be noted that Paktel has slowed down its media campaign about its product and packages which had gained momentum few months back probably due to the upcoming change in the ownership.

Commenting on the upcoming changes in the mobile market, Warid Telecom CEO Hamid Farooq said Paktel may get a new life with the takeover of Millicom by China Mobile.

He said that the new player from Asia would think of injecting new capital ranging between $200-300 million in upgrading its existing network and infrastructural setup. “I think China Mobile will take at least one year to compete with existing and new players in the local market,” Hamid said.

He said that the 2007 would be a tough year for the mobile phone operators as there was a possibility that the new player with new market sentiments would further offer price cuts to lure customers.

However he said that price drop from a certain level would prove counter- productive to the health and growth of the industry. He was of the view that five operators were enough to handle the situation in view of the market size.

Out of 150-160 million Pakistan populations, only 27 million people have mobile phones and by 2008 the number of subscribers will touch 50 million.

 

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Emaar to put Dh79b in Pakistan


Dubai: 06/01/2006

Dubai: Emaar Properties, the Dubai-based real estate developer, yesterday announced four major projects involving a Dh78.86 billion ($20.39 billion) investment in Pakistan, making it the largest UAE investor in South Asia.

These include a Dh66 billion ($18 billion) mixed use development in Karachi as well as three real estate developments in Islamabad and Karachi, involving Dh8.8 billion ($2.4 billion) in investment.

The projects will include master-planned communities that will set new benchmarks in commercial, residential and retail property within Pakistan.

It is the largest influx of foreign money into Pakistan and makes the company the largest UAE investor in the country.

An Etisalat-Dubai Islamic Bank consortium is investing $2.59 billion for a 26 per cent stake in PTCL, Pakistan's largest telecom service provider.

Emaar yesterday signed a memorandum of understanding with Pakistan's Port Qasim Authority for the $18 billion mixed-use development in Karachi. It was signed by Emaar Chairman Mohammad Ali Al Abbar and Senator Babar Khan Ghauri, Minister for Ports and Shipping, in Islamabad in the presence of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, and Pakistan President Pervez Musharraf and Prime Minister Shaukat Aziz.

This is Emaar's largest investment outside the UAE. The company is also involved in masterplanning the Dh100 billion King Abdullah City in Jeddah, being developed by Saudi government's investment arm Saudi Arabian General Investment Authority.

It has also made considerable investments in Morocco, India, Syria, Jordan, Turkey and Tunisia.

Pakistan's capital, Islamabad, is home to two Emaar Pakistan projects the Highlands and Canyon Views.

With 1,500 acres between them, the Islamabad communities offer 9,000 luxury single-family town homes and villas in a range of architectural styles with easy access to amenities including retail centres, community club houses, parks, lakes, schools and mosques.

The Highlands development is located in the Defence Housing Authority Islamabad (DHAI) Phase 1 extension and Canyon Views is in the DHAI Phase 2 extension.

Offering approximately 50 separate community districts with own identities, a spectrum of architectural styles ranging from Mediterranean, Tuscan, Mughal, Arabic and Spanish, will be available for buyers to select from.

"These current projects are only a small and initial part of our commitment to providing world-class living and infrastructure in Pakistan," Al Abbar said in a statement.

"Pakistan will play an important role in the development of Emaar's reputation in Asia, and remains one of our most significant commitments outside the UAE."

Karachi will be home to Crescent Bay, a 75-acre development featuring high- and mid-rise towers for residential and commercial use, a shopping centre and five-star beachfront hotel. The towers will contain approximately 4,000 residential apartments.

All three projects are expected to be completed in four to five years.

http://www.gulfnews.com/business/Re...y/10043951.html

 

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Wednesday 31 May 2006

DUBAI, May 31 (Reuters) - United Arab Emirates firm Emaar Properties (EMAR.DU: Quote, Profile, Research) has signed an $18 billion deal with Pakistan's Port Qasim Authority to develop land in Karachi.

A Emaar statement on the Dubai bourse Web site said on Wednesday that the development would include apartments, commercial and retail space as well as hotels and other leisure facilities.

An Emaar official said the deal was signed in Pakistan.

http://today.reuters.com/business/n...ryID=nL31559572

 

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ISLAMABAD, May 31: The National Economic Council (NEC) on Wednesday set seven per cent economic growth rate target and an estimated Rs435 billion development expenditure for the next financial year.

On a traditional basis, the size of the Public Sector Development Programme was approved at Rs385 billion, including Rs270 billion for federal programme and Rs115 billion for provincially self-financed projects.

However, the gross PSDP size was jacked up to Rs435 by including Rs50 billion for earthquake rehabilitation, instead of placing it in the non-development budget. The Rs270 billion federal programme would have “an operational shortfall of Rs20 billion”, said Dr Akram Sheikh, deputy chairman of the planning commission, after the NEC meeting.

Thus, the next year’s PSDP would be Rs365 billion compared with current year’s Rs272 billion, showing an increase of over 34 per cent. In addition to this, Rs180 billion would be invested from their own resources by public sector corporations, including those having government’s majority shareholding like the PTCL, he said.

Briefing journalists along with secretary for planning Akram Malik, the planning commission deputy chairman said the development strategy for the next year would be food security, energy security and water security, enabling environment for investment and human resource and skill development by taking advantage of Pakistan’s strategic geo-political situation.

He said the challenges would be to sustain the development and growth momentum, stabilise prices, generate employments and remove mismatch between skills and growing needs of a knowledge-based economy.

He said the infrastructure sector would be provided highest share of Rs132.5 billion (49.1 per cent) in the federal PSDP, followed by Rs130.8 billion (48.4 per cent) for social sectors and Rs6.7 billion (2.5 peer cent) for other sectors.

Dr Sheikh said water security had been given top priority and allocation for the sector had been increased by 32 per cent to ensure completion of projects on schedule such as raising the Mangla dam, Kachhi, greater Thal and Rainee canals, lining of irrigation channels and the National Drainage Programme.

Moreover, Rs10 billion had been allocated for land acquisition for five mega dams, including the Kalabagh dam, as announced by the president, he said.

He said adequate funds had been included in the PSDP for providing air and rail links of Gwadar with up-country, Iran and with corridors leading towards Central Asian states to leverage Pakistan’s strategic location. Intensive work on the National Trade Corridor would also be initiated during 2006-07 to facilitate trade flows and help reduce the cost of doing business.

He said the NEC had directed relevant authorities, including the planning commission, to further improve implementation of development projects within approved cost and on time so that objectives could be achieved.

Dr Sheikh said the size of the Khushal Pakistan Fund established in 2005-06 with Rs5 billion had been increased to Rs10 billion. This will be in addition to Rs24.4 billion allocation for the Khushal Pakistan Programme I & II.

He said the next year’s growth target had been set at seven per cent against current year’s provisional estimates of 6.6 per cent. This will be achieved through a 4.5 per cent growth in agriculture, 10.9 per cent in industry, including 13 per cent large-scale manufacturing, and about 7.1 per cent of services sector growth.

He said the GNP per capita income would increase to $935 next year compared with current year’s $847. A total of 1,885 projects are part of the next year’s PSDP against current year’s 1,512 projects, of which 302 projects have been completed during the year.

He said the total expenditure during the first 10 months (July-April) of the current year under the PSDP stood at Rs149 billion or 73 per cent of the Rs204 billion federal programme and by the end of the year Rs194 billion or 95 per cent would be utilised.

 

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Thursday June 01, 2006

ISLAMABAD: The government on Wednesday granted four exploration licences and petroleum concessions agreement to Oil and Gas development Company Limited (OGDCL) to explore oil and gas in Punjab and NWFP. The company will carry out work on these blocks to the tune of US $ 5.805 million.
In this regard, a signing ceremony was held here in the ministry of Petroleum and natural resources offices, which was witnessed by Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon.

The Licences and Petroleum concession Agreement was signed by Secretary Petroleum Ahmed Waqar on behalf of the President of Islamic Republic of Pakistan, Muhammad Naeem Malik, Director General Petroleum Concessions and Arshad Nisar, Chairman/Chief Executive Officer of OGDCL.

OGDCL will explore oil and gas in Block No. 3371-8 Soghri, comprising District Kohat NWFP and District Attock Punjab; Block No. 3271-3, Mianwali, comprising District Mianwali, Chakwal, Khushab, and Lakki Marwat NWFP; Block No. 3270-6 Wali, comprising South Waziristan Agency, Bannu and Lakki Marwat in NWFP and Block No. 3272-13 Chakral, comprising Rawalpindi, Jhelum and Chakwal in Punjab.

OGDCL is currently operator of 36 exploration licences and 39 leases besides having interest in 32 non-operated leases. Currently they are producing 32,323 barrels of oil, 857 million cubic feet of gas, 268 million tones of LPG and 68 million tones of Sulphur per day.

 

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Thursday June 01, 2006

ISLAMABAD: CBR has surpassed the revenue target of the first eleven months of FY 2005-06, it is claimed in a statement issued here Wednesday.
The provisional collection so far has been Rs. 600.6 billion which indicates an overall growth of 20.0% over July-May 2004-05. It is expected that this collection will increase further when the revenue figures for the month of May 2006, are finalized in the next few days.

The tax-wise details confirm that direct tax revenue has increased by 21.7% during the period reaching Rs. 178.1 billion against Rs. 146.4 billion last year. The growth of sales tax has been 23.2%. The overall sales tax collection, during the first eleven months has reached Rs. 256 billion as against Rs. 207.8 billion last year.

During this period the sales tax at import stage has increased from Rs. 131.5 billion to Rs. 150.7 billion, showing an increase of 14.7%. Similarly, the sales tax on domestic production and sales has gone up from Rs. 76.3 billion to Rs. 105.3 billion, indicating a growth of 38%. The collection on account of customs duties has reached Rs. 116.7 billion against Rs. 99.3 billion during last year, indicating a growth of 17.5%. Finally, the federal excise duty collection has increased by 5.7% during July- May, 2006 and reached Rs. 49.7 billion.

The provisional collection of May, 2006 (excluding the collection of last day) stands at Rs. 53.6 billion; with the break up of Rs. 27.5 billion as sales tax, Rs. 11.2 billion as customs, Rs. 4.4 billion as federal excise, and Rs. 10.5 billion as direct taxes.