Pakistan Economy - News & Updates - Archive

[Neo]

S. Arabia to give $300m to offset deficit​

RAWALPINDI, June 4: Saudi Arabia is expected to provide Pakistan with a grant of $300 million to offset the burden on country’s economy in the wake of rising fuel prices.

This indication was given by the Saudi Ambassador in Pakistan Ali S. Awadh Asseri, while speaking to newsmen in Rawalpindi on Wednesday. He said Saudi Arabia fully realised the difficulties being faced by Pakistan following rising fuel prices and food crisis, and during the upcoming visit of Prime Minister Yousuf Raza Gilani to the kingdom, several matters will be discussed to further improve economic relations between the two brotherly countries.

Ambassador Asseri said the Saudi Embassy in Islamabad and its consulate was issuing work visas to approximately 1,200 Pakistanis every day, which reflects kingdom’s close relationship with Pakistan.

Earlier addressing the members of Rawalpindi Chamber of Commerce and Industry (RCCI), the Saudi envoy called for greater partnership between private sectors of the two countries. There is enormous scope for expanding trade and economic relations.

“Given political and investment security, Pakistan remains a good place for investment, he added.” Saudi investors have made huge investments in countries that ensure political and investment security, he said.

At the same time, Pakistani businessmen should also take steps to invest in Saudi Arabia where unprecedented liberalisation of policies has contributed to facilitate foreign investment.

S. Arabia to give $300m to offset deficit -DAWN - Business; June 05, 2008

 

[Neo]

Agricultural and industrial growth focus of budget: Dar ​

ISLAMABAD (June 05 2008): Former minister for finance Ishaq Dar said the government will focus on growth of agriculture and industrial sector to strengthen the fundamentals of the economy. Talking to private news channel, he said mismanagement and external economic pressures were the major causes of the economic crises.

He said it was unfortunate that the previous government had not started work on any reservoir during last eight years. He said the proposals to end subsidy on petroleum products would create problems for the masses. He said the oil prices rose from 60 to 132 dollars per barrel in the international market during the last few months.

Before the elections this year the previous government made decisions on expediency ignoring economic issues, he added. He said the tax collection of the country during the current fiscal year is expected to be around Rs one trillion, which is less than the projections.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Traders demand additional 200MW for Karachi​

KARACHI: Sindh government will approach the federal authorities to seek additional 200MW electricity supply for Karachi to overcome the power shortage in the metropolis.

Also, the government would be asked to consider the proposal of traders of Karachi to extend the closure of shops by one hour from 9:00 pm to 10:00 pm to facilitate the small traders of the city.

According to sources, this along with other issues was discussed in a meeting between Sindh Home Minister, Zulfiqar Mirza and representatives of small traders at Karachi Chamber of Commerce & Industry (KCCI) Thursday. This was the follow-up meeting held couple of days back, which took up the issues of power crisis and closures of shops by 9:00 pm.

A participant of the meeting told Daily Times that provincial home minister would proceed to Islamabad to discuss these issues and proposals at the top level of the government. Additional power supply from WAPDA would be most important issue in his meeting with higher authorities in federal government.

The meeting, which was also attended by representative of Karachi Electric Supply Corporation (KESC) held extensive deliberations on the issue of power shortage and decided to take up the issue at the highest level. Currently WAPDA is supplying 500MW electricity and if the additional 200MW is added the power system of the city, the power woes could be alleviated, traders told the minister.

Sources said that it was also decided during the meeting that there would not be any loadshedding in the residential areas from 12:00 in night to 8:00 in the morning whereas during these hours, loadshedding would be done in industrial areas, which have been divided in two groups.

Sources said that minister was informed that Karachi is paying Rs 600 billion in national kitty whereas rest of the country’s share is Rs 400 billion, but it is getting expensive electricity. “The hydel power is far cheaper compared to thermal and Karachi should also be given its share in this cheap electricity by providing more supply from WAPDA”, sources quoting the participants’ views said.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

PSDP 2008-09: Industrial infrastructure to get Rs 11.218 billion​

ISLAMABAD: The federal government has earmarked Rs 11.218 billion in Public Sector Development Programme (PSDP) 2008-09 for the development of industrial infrastructure.

It will also to facilitate the country to meet local demand for various goods and create surplus.

Such huge spending would help the government to increase production besides to stimulate country's export. It would also help in improving efficiency and competitiveness of the local industrial sectors.

Out of the total allocation, Rs10.448 billion be given to the projects related to the ministry of industry, production and special initiatives for 19 ongoing projects with allocation Rs.4.503 billion, 15 new development schemes with Rs.5.945 billion and Rs769.578 million for textile related on-going six projects.

The new projects would greatly helps in improving industrial production of the country. These development schemes and there allocation in the PSDP 2008-09 are: 'Sialkot Business and Commerce Center (CBCC) worth Rs.161 million', 'China-Pak: Economic Zone Hattar, NWFP worth Rs.75 million', 'Establishment of Industrial Estate Khushhal Ghar, NWFP worth Rs.10 million', 'Area Development and EPZ in Balochistan worth Rs.5 billion', 'Improving, re-habilitation and modernisation of industrial estates, NWFP worth Rs.75 million'.

Other new projects are: Chromite benefication plant muslim bagh worth Rs 8.380 million', 'Women business development centre, Peshawar worth Rs 18 million', 'Revivial of Hyderabad leather foot wear centre, Hyderabad worth Rs 11.620 million', 'SME sub contracting exchange in Gujranwala worth Rs 16 million', 'Washing and impressing unit, Mutta Mughal Kheal, Charsadda NWFP worth Rs 2.380 million', 'Women business development centre Karachi worth Rs 17.680 million', 'Policy and project implementation, monitoring and evaluation unit (PPIMEU) worth Rs 19 million', 'Energy efficiency for textile centre in Pakistan worth Rs 20.010 million', 'Prime Minister's special initiative for village product specialisation worth Rs 500 million', and 'Construction of boundary wall site office for Gwadar EPZ worth Rs 11.251 million'.

Allocations in the PSDP 2008-09 for textile related six developmental schemes are: 'Lahore garment city project, Punjab worth Rs 147.640 million', 'Faisalabad garment city project, Punjab worth Rs 367.682 million', 'Providing and laying dedicated 48 inch diameter mild steel water main for textile city Karachi worth Rs 218 million', 'Export development plan implementation unit worth Rs 18.200 million', 'Up-gradation of EDF funded textile institutes worth Rs 16.856 million', and 'Holding of conferences and seminars worth Rs 1.200 million'.

The government hopes that spending in textile related projects would definitely help in improving textile products and it would ultimately lead increase in country's exports. Textile is major source of foreign exchange earning for the country.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Govt allocates Rs 803.224m for 5 new agri projects​

ISLAMABAD: In order to ensure food security and increase agriculture production, the government has initiated five new agriculture related projects and allocated Rs 803.224 million for them in the PSDP 2008-09.

Total cost of these five projects is Rs 1.233 billion and the above allocation has been made only for the year 2008-09.

These projects are: 'biological control of major cotton pests in Pakistan with emphasis on mealy bug worth Rs 418.224 million', 'national pesticides residues monitoring system worth Rs 50 million', 'construction of office building central cotton committee at Karachi worth Rs 250 million', 'Prime Minister's sepcial initiative for white revolution worth Rs 500 million', and 'development of research facility for olive model farm, Sungh Bhatti worth Rs 15 million'.

For the year 2008-09 the government has allocated Rs 803.224 million in Public Sector Development Programme for these five important projects. Among these projects, 'biological control of major cotton pests in Pakistan with emphasis on mealy bug' is very important because it would help in increasing cotton production.

Last year 2007-08, the mealy bug affected cotton crop by 17 percent and total production was realised 11.66 million bales against the target of 14.10 million bales. The mealy bug virus has affected the standing cotton crop over an area of 150,000 acres out of total 8,000,000 acres in the cotton producing areas of Punjab and Sindh provinces last year.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Profit repatriation rises by 12.2%, $735m sent abroad​

KARACHI: Repatriation of profits from the country rose by 12.2 percent during the first ten months of the current financial year, putting further pressure on an already weakened Rupee.

Companies operating in the country with foreign shareholding sent $735 million abroad from July 2007 to April 2008, up from $654.9 million repatriated in the corresponding period last year.

The local currency has weakened from around Rs 60 per dollar in the beginning of the current financial year to Rs 67 per dollar now.

This huge outflow of foreign exchange from the country gives strength to those who criticise the policy of allowing 100 percent repatriation of profits. They say the foreign companies must be made to invest a substantial part of their earnings locally. This will not only help contain the outflow of foreign currency from the country, but will also create employment opportunities and spur further growth locally.

Experts say that FDI is not beneficial for developing countries in the long run. In the short run FDI is needed to provide a spurt in the growth rate, but analysis shows that developing countries that receive a high level of FDI for sometime are worse off later due to repatriation of profits and outflow of capital. Initially when FDI flows into the country, governments are able to sustain high borrowing but FDI flows fall in the long run leaves the developing countries in a debt crisis, they say.

Some economists have concluded after research that significant effects that FDI inflows may cause to the deterioration of the balance of payments in the long run due to profit remittance should be taken into account when policy makers decide to implement policies to attract foreign investors.

Thermal power generation companies sent $151.27 million, the highest amount by any sector of economy. This was 27.9 percent higher than $118.32 million sent last year.

It was followed by the telecommunications sector, which sent $92.06 million during July-April period. It was 14.3 percent lower than $107.42 million sent last year.

The oil and gas exploration companies sent $64.56 million, up by 83.9 percent from $35.1 million last year.

Petroleum refining sector repatriated $51.7 million compared to $48.69 million sent abroad last year.

Repatriation of profits by companies making pharmaceuticals & OTC products declined from $48.22 million to $26.31 million. Tobacco and cigarettes sector sent abroad $27.28 million as compared to $17.6 million last year.

Chemicals-making companies' profit repatriation declined from $42.74 million to $39.4 million. The repatriation of profit by financial businesses fell from $92.12 million to $90.64 million.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Reverse remittances rise 12pc to $735m ​

Friday, June 06, 2008

KARACHI: Repatriation of profit from Pakistan rose by 12.2 percent during first ten months of current fiscal year.

Foreign companies sent back $735 million in terms of profit and dividend during July-April 2007-08 against $654.9 million in the same period of last fiscal year.

The independent power producing companies (IPPs) were the major contributors to this outflow, as they repatriated $151.27 million as compared to $118.32 million in the same period of fiscal 2006-07. Followed by communication sector including IT and telecommunication companies besides of financial business companies respectively.

IT and telecommunication companies sent back $96.75 million while banks repatriated $90.64 million.

Oil & gas exploration companies sent abroad $64.56 million companies working in chemical sector dispatched $39.40 million as profit/ dividend during first ten months of current fiscal year.

Repatriation of profit of tobacco & cigarettes companies rose to $27.28 million from $17.60 million in the corresponding period of last fiscal.

Companies making pharmaceutical and OTC products sent $26.31 million against $48.22 million in the same period of last fiscal year.

Food companies repatriated profit $32.92 million as compared to $31.83 million beverages companies profit soar to $10.78 million from $7.30 million of last fiscal year.

Petroleum refining companies profit rose by 6.2 percent to $51.70 million from $48.69 million in the similar period of last fiscal.

Foreign companies working in transport equipment (automobile) sent back $25.51 million against $18.92 million of last fiscal year, which is 35 percent higher than last year.

Car assemblers repatriated $15.06 million against $9.80 million of last fiscal year and companies assembling buses and trucks sent $10.45 million against$ 9.12 million of last fiscal.

Profit of construction companies rose to $27.41 million from $26.34 million of last year whereas, other sectors profit jumped to $39.787 million, which was recorded $26.95 million during July-April 2006-07.

Reverse remittances rise 12pc to $735m

 

[Neo]

Wheat yield in Punjab far lower than East Punjab ​

Friday, June 06, 2008

PESHAWAR: Wheat yield per hectare in Pakistan’s Punjab province is far less than that in Indian Punjab due to a host of reasons, a seminar was told here the other day.

Among those reasons was the difference between wheat production systems of India and Pakistan, evident from wheat sowing and marketing.

The Soil Science Society of Pakistan organised a special seminar at the National Agriculture Research Centre (NARC), with Prof Dr Riaz A Khattak in the chair. It discussed wheat production in Punjab provinces of the two countries.

According to a press release, a joint group of Pakistani and Indian scientists conducted a comparative study, analysing the wheat production systems in both parts of Punjab.

One of the members of the study group, Dr Tariq Sultan, senior scientific officer of NARC, presented a review of the two systems. Wheat yield per hectare is almost double in Indian Punjab as compared to Pakistan’s. The main reason the data suggested for the high yield in Indian Punjab was the provision of subsidy on fertilisers, tube-wells and machinery.

It said the indigenous production of tractors, combiners and other farm implements led to high production in India. The data showed that sowing by drill method, availability of certified seeds, a farmer-friendly efficient and effective market system and a stable pricing system contributed to high production in India.

Total cultivated area in Indian Punjab is estimated at 4,224 million hectares and total number of farms is 1,093 while in Pakistan the cultivated area is 15,960 million hectares and farms are 3,864.

The study also showed a contrast in yields, which was 4,179-4,696 kg per hectare in Indian Punjab compared to 2,392-2,775 kg per hectare in Pakistani Punjab.

In India, DAP (di-ammonium phosphate) fertiliser is priced at Rs475 per bag and urea costs Rs250 per bag while in Pakistan they cost Rs3,200 and Rs630 per bag respectively, which are quite high.

Indian Punjab gives Rs350 per month subsidy on tube-wells while Pakistan offers no such facility. Similarly, methods of sowing in both countries also point towards differences between them. Two methods, drill and broadcast, are applied to sowing in Indian Punjab. Of these, 98 per cent sowing is done through drill method and one to two per cent through broadcast method.

Compared to that, in Pakistan only 20 to 30 per cent sowing is done through drill method and the remaining through broadcast method.

India manufactures its own tractors and provides certified seeds while in Pakistan tractors are imported and farmers use their own seeds.

Wheat yield in Punjab far lower than East Punjab

 

[Neo]

Riyadh hints at resuming oil facility ​

ISLAMABAD (June 06 2008): On the request of the Gilani-led coalition government, Saudi Arabia has hinted at resuming oil supply to Pakistan against deferred payments to help it come out of the ongoing financial crisis, it is learnt. Diplomatic sources said a formal announcement by the Saudi government to this effect would be made during Prime Minister Syed Yusuf Raza Gilani's 2-day official visit to Riyadh.

Gilani is scheduled to fly to Saudi Arabia for an official visit on Friday. The Prime Minister will perform Umra, besides holding talks with top Saudi leadership on bilateral issues. These will include bilateral trade, oil import, war on terror and other issues of mutual interest. The Prime Minister will also invite Saudi investors to invest in promising sectors.

Pakistan's economy is under severe pressure due to rising oil pries in the world market. For the first time in its history Pakistan's oil import bill is gone over 10 billion this year. Since some major sectors are not performing well, Pakistan is feeling difficulty in absorbing ever highest import bill. Among other options to offset the impact of high oil prices on the economy Pakistan wants crude oil supply from Saudi Arabia against deferred payments.

On the government direction, Foreign Office has approached Saudi Arabia to seek 1998-like facility for oil import for offsetting rising pressure of high petroleum products' prices on the economy. Foreign Office got details of the oil supplied by Saudi Arabia against deferred payment after nuclear tests in May 1998.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Musharraf outlines parameters of development ​

ISLAMABAD (June 06 2008): Economic stability, strong defence and skilled human resource are parameters to measure the development of a country, said President Pervez Musharraf here on Thursday. Lack of management skills and any weakness of the leadership may weaken the country, Musharraf said while addressing the second convocation of the National Defence University (NDU).

Musharraf is Chancellor of the NDU. Talking on the role of governments, the President said the governments in general need to ensure strong defence, welfare and security to meet internal and external threats. He said stability and economic growth were vital to ensure progress and development of a state. He said if the economy was not stable or rising, it could not achieve the desired development objectives.

Recalling his memories in National Defence College, President Musharraf said over the years the institution has carved its place for in national and international institutions. He said the presence of a large number of students from different countries was a testimony to the fact and said the venue provided an opportunity for interaction and understanding of different environments in which they live.

He expressed the hope that the foreign students would also understand Pakistan's environment and the compulsions under which it exists. The President also conferred degrees of Masters of Science in Defence and Strategic Studies, and War Studies and Defence Management and BS (Honours).

Earlier, in his address of welcome, NDU President Lieutenant General Mohammad Hamid Khan said the institution's mission was to prepare future leadership from public and private sectors of Pakistan and other friendly countries through multi-disciplinary educational and research programmes.

He said the focus was on security, defence and strategic studies. He said that the institution has run seven workshops on national security issues apart from its normal courses and a total of 405 participants have qualified. The convocation was attended by General Tariq Majid, Chairman Joint Chiefs of Staff Committee, foreign diplomats and senior civil and military officials.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Sugarcane output may drop 35-50 percent in fiscal year 2009 ​

ISLAMABAD (June 06 2008): The sugarcane production for 2008-09 may decrease to 35-50 percent as compared to 2007-08. This year, sugar millers have not made payments to the farmers, who were forced to sell the crop at Rs 28.00 per maund against the fixed support price of Rs 58.00, sources told Business Recorder here on Thursday.

The sugar mills' mafia has been discouraging the small farmer for the last five years and the mill owners make payments to the big farmers, but those who own only 6-7 acres of land are not being paid in time.

The sugar mills produced approximately 4.3 million tonnes of sugar while the consumption of the commodity is 3.9 million tonnes. Also the federal government purchased 0.2 million tonnes sugar from the mills' old stocks through the Trading Corporation of Pakistan (TCP), but the sugar millers are still not willing to make payments to the growers.

"Most of the sugar millers are paying us of the last year's crop this year. What is more tragic is that the payments of the poor growers are still pending as the sugar millers pretend that due to high crop production, the less rates of sugar in the domestic market are forcing them to delay the payments", the sources said.

The irony is that the government is not paying any attention to this issue. "The government has become a silent spectator and the sugar mills are using the unfair tactics to exploit the growers. Sources said this year due to the production of a surplus crop of sugarcane, most of the mills refused to buy the crop and the farmers ultimately had to sell it as fuel to brick kilns.

"We sold our crop at Rs 28 per maund. Our cost of production per acre is about Rs 20,000 and Rs 60 per maund is the cost of production while the transporters charge double/triple fares because of waiting for weighting for over 30-36 hours at the mills gate. So, one can imagine how much loss the growers had to face in this regard", sources added. The growers who used to sow wheat on their lands after harvesting sugarcane could not do so due to the late start of crushing and hence they lost wheat crop.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Government provides equal opportunities to foreign, local investors: Prime Minister ​

ISLAMABAD (June 06 2008): Ravi Ruia vice chairman and Shahi Ruia of Essar Global Limited called on Prime Minister Syed Yusuf Raza Gilani here on Thursday. Saarc Chamber of Commerce and Industry President Tariq Sayeed and Vice President Iftikhar Ali Malik and Nazir Paracha were also present.

Essar Global Limited has enterprise value of 50 billion dollar. It provides expertise in steel and power sectors. Talking to the delegation, Prime Minister Syed Yusuf Raza Gilani said the government of Pakistan was offering lucrative facilities to attract foreign investment in a number of areas. He in particular mentioned opportunities for foreign investors in energy and coal mining, infrastructure related projects.

He said the government provides equal opportunities and facilities to foreign and local investors and hopes that they will take their full advantage by preferring Pakistan over other countries of the region to invest their money. He said investors who have already invested in Pakistan were getting good return on their investment. A Saarc Chamber's press release issued here on Thursday said.

Syed Yusuf Raza Gilani appreciated the role of Saarc in promoting the cause of the member countries for seeking investment in their key areas of the economy. He assured the delegation that Pakistan will provide all possible supports and help to Saarc to play even more vibrant role in enhancing investment in member countries besides taking steps to liberalise their trade for benefit of all the players.

Business Recorder [Pakistan's First Financial Daily]

 

[Bushroda]

ESSAR Group interested in energy, steel, shipping sectors​

ISLAMABAD: ESSAR Group, one of the largest corporate houses of India with an enterprise value of $15 billion, has expressed its interest to invest in Pakistan’s energy, steel and shipping sectors.

Daily Times - Leading News Resource of Pakistan

This could be indeed a good news for Pakistan. Shashi Ruia is seriously disgruntled because of GoI's biased favoring of Reliance Industries.

India's loss could be Pakistan's gain.

 

[Neo]

This could be indeed a good news for Pakistan. Shashi Ruia is seriously disgruntled because of GoI's biased favoring of Reliance Industries.

India's loss could be Pakistan's gain.

Amen to that!

 

[Bushroda]

Amen to that!

Essar & Reliance started their business together. Inorder to avoid competition, Reliance ventured into Petroleum & Essar went into shipping industry. Even today, Essar shipping is amongst the 10 largest shipping industries in the world. But, the trouble between Ambanis & Ruias started with Ruias deciding to get into Petroleum business. Ambanis through their government influence got the work halted on Essar refinery in Jamnagar, Gujrat.