Pakistan Economy - News & Updates - Archive

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World Bank for financing National Trade Corridor Improvement Plan ​

KARACHI (June 19 2008): The World Bank (WB) is planning a financial support program for Pakistan to develop its ports, roads and railways under the National Trade Corridor Improvement Program (NTCIP), Business Recorder learnt on Wednesday.

"The Bank is planning a program of financial support for roads, railways, and ports and technical assistance for implementation, monitoring, and evaluation of the National Trade Corridor Program over the next five to six years," sources quoted WB Transport Business Strategy for 2008-2012 as saying.

Under NTCIP, approved by the former Prime Minister Shaukat Aziz government, it had been decided to take a number of policy measures to reduce the cost of trade and transport logistics and bring the quality of services to international standards to reduce the cost of doing business in Pakistan and ultimately enhance exports competitiveness and accelerate industrialisation. Sources said that one of the steps under NTCIP was termination of Karachi Dock Labour Board (KDLB) and de-registering the dockers.

In February 2008, Caretaker Federal Minister for Ports and Shipping, Dr Fahim-ud-Din Ansari, had told Business Recorder that the Bank was giving a $600 million loan-cum-grant to Karachi Port Trust (KPT) at a nominal interest rate to either "privatise" or wind up the Board.

A WB Project Information Document, issued on 'Appraisal Stage' in April 2007 said that the International Bank for Reconstruction and Development (WB) would lend $79 million to KPT for management and implementation of the 'Karachi Dock Labour Project'.

It is worth mentioning here that the Collective Bargaining Agent (CBA), representative body of KDLB, terming the WB as its anti has warned of strong resistance if the government went on with termination or privatisation of the Board.

"We do not know about any such planning and would fully resist if the government did that... the World Bank has never been our well-wisher," said Mohammad Hilal, Senior Vice President of CBA.

According to sources, Islamabad has been seeking financial support from WB to ensure swift availability of funds and process with abolition of the KDLB Scheme in a short period of time. Abolition of the Scheme, they said, would minimise the overall cost for the economy to increase productivity of the Karachi Port.

Key upshots of the Program, the Bank's Transport Business Strategy was eyeing, included reducing the cost of domestic transport and non-factor services in the total value of commodities and the transport and transit costs and times for goods overall, increasing the satisfaction of Corridor users and rail share of long-distance transport of freight, reducing the operating deficit of railways with objectively determined and targeted subsidies, enhancing the safety and reliability of transport operations and improving the governance and accountability of entities participating in the Program, sources said.

In 2005, the government had launched major initiatives around the Corridor to reduce the cost of trade by improving transport logistics infrastructure and services. According to an estimate inadequate performance of transport sector costs the country's economy 4 to 6 percent of GDP each year.

The proposed Corridor, which spreads over north-south backbone route from Karachi via Lahore to Rawalpindi with onward links to Afghanistan, contains two ports, which handle 95 percent of country's external trade, said the Strategy.

The WB strategy, source said, acknowledged that Pakistan had adopted a holistic and integrated approach encompassing the public and private sectors, services and infrastructure, reforms and investments and various sectors that were responsible for performance of the approved Corridor (highways, road transport, ports and shipping, civil aviation, railways, and customs and trade logistics). The NTCIP would be implemented by different governmental agencies including the ministry of ports and shipping, ministry of defence, ministry of railways, ministry of communications/National Highways Authority, Planning Commission and the Central Revenue Board, they said.

Business Recorder [Pakistan's First Financial Daily]

 

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Rs 846 million to be spent on 46 Fata projects ​

PESHAWAR (June 19 2008): Fata Development Authority (FDA) is likely to spend Rs 846 million, during financial year 2008-09, on 46 projects in six different sectors, including small dams, minerals, skill development and industries. The Authority is giving final shape to the annual development program for the coming financial year.

In this connection the NWFP Governor Owais Ahmed Ghani was given a detailed presentation on Wednesday on the proposed allocations under ADP of FDA at the Governor House. Those who attended the presentation were Additional Chief Secretary FATA Habibullah Khan, Chief Executive FDA Muhammad Shahzad Arbab and other officials of FATA Secretariat and FATA Development Authority. The meeting discussed funds allocation for different projects besides the targets and impact of development program on the overall socio-economic uplift of tribal areas.

Giving the presentation, General Manager, FDA Planning, Saleem Khan Mohmand said that the total outlay for the new financial year was 10 percent of the total FATA ADP and 18 percent more than the current year's allocations. Rs 280 million has been allocated for 21 new development schemes whereas funds allocation for 25 ongoing schemes is Rs 566 million, which is 33 percent and 67percent of total development budget, respectively. The highest allocation is Rs 356 million for small dams, followed by Rs 200 million for minerals, Rs 124 million for skill development, and Rs 80 million for industries.

Two projects in the Tourism Development Sector have also been added to the program, including Khyber Steam Safari revival project. Other new projects include provision of safety and other equipment for scientific coal mining, feasibility study, design and establishment of coal fired power generation unit in FATA, feasibility study for use of solar energy in FATA and economic and social feasibility study for townships in FATA.

The Governor said that law and order situation in FATA was returning to normalcy and was very much conducive for execution of development project. He urged the officials of the Authority to fully focus their attention on carrying development process with full vigour and for the entire benefit of the people of FATA. He appreciated the inclusion of coal-fired power generation and solar energy projects in the development program.

He particularly mentioned the projects like Reconstruction Opportunity Zones, Small Dams and Mineral development initiatives, describing these of great importance in the efforts for socio-economic uplift of FATA, which would initiate a new era of progress and prosperity in the tribal areas.

Business Recorder [Pakistan's First Financial Daily]

 

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Vietnam, Pakistan outdo India in US, EU textile mkts​

20 Jun, 2008, ET Bureau

NEW DELHI: Smaller countries like Vietnam, Bangladesh and Pakistan are outdoing India in textile and clothing exports to the US and EU in the post-quota (2005-2007) period, confirmed a FICCI study.

Vietnam’s share in EU25’s imports of textile and clothing has increased from 0.8% in 1995 to 1.6% in 2007. India has only been able to keep its rank intact in EU market at number three, while Bangladesh has impoved from sixth position in 2002 to fourth 2007. Similarly, in the US, Vietnam seems to be fast catching up with India’s exports.

It may be noted that the appreciation of rupee till a few weeks ago had been hitting India’s textile exports. Of late, there are signs of a turnaround. Back home, textile companies are investing heavily thanks to the technology upgradation fund scheme.

Some firms are also trying to expand their manufacturing bases to other countries through either acquisitions of greenfield plants or by taking over firms in low cost economies.

According to the Ficci study, India’s prices of textiles and clothing which witnessed a declining trend in the quota period, hardended in the post-quota period in the EU market. As a result, India’s share in the EU textile imports from the world declined from 7.9% to 7.5% between 1995 and 2007.

In the US market, even though India’s average price for textile exports declined in the post-quota period they were still higher than China’s and Pakistan’s prices, according to the study. But here also, India’s share did not increase significantly.

India’s share in the US global imports of textiles and clothing increased by merely 1.6% between 1995 and 2007, whereas that of Vietnam increased from 0.04% to 4.7% and that of China went up from 11% to 33.5% in the same period. Even Bangladesh seems to be catching up fast in both EU and the US market via a vis Indian prices.

India was the third largest exporter of textiles and clothing in the US market. However, in value terms, the country’s exports were just 1/6th of China which was the largest supplier in US market.

Also, FICCI study noted that in terms of volume, Pakistan was the second largest exporter of textiles abd clothing to the US in 2007 and India was the fourth largest supplier. Vietnam, which exported only $17 million worth of clothing to the US in 1995, exported $4.35 billion of clothing in 2007 as compared to $3.2 billion exported by India to US.

In EU, India was the third biggest supplier in the EU25 market and its share was 7.5% in 2007. India’s average growth rate higher in post-quota period than the pre-quota period, i.e. 15.4% in 2005-07 and 4.4% in 1996-2004.

However, FICCI observed that there has been a declining trend in growth of our exports to the EU since 2005. India’s growth rate of exports to the EU was 18.6% in 2005 which declined to 14.9% in 2006 and 12.6% in 2007.

India’s share has remained almost constant in EU25 for the last 13 years and its average growth rate (1996-2007) has been lower than EU imports from the world, for the same period.

Whereas, average growth rates of China, Bangladesh and Vietnam were not onlygreater than India, but also greater than the EU25’s average growth rate of global imports for the period 1996-2007.

Vietnam, Pakistan outdo India in US, EU textile mkts- Foreign Trade-Economy-News-The Economic Times

 

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KANUPP resumes 70 megawatts power supply to KESC ​

KARACHI (June 19 2008): The Karachi Nuclear Power Plant (KANUPP) resumed 70 MW power supply to Karachi Electric Supply Company (KESC) on Wednesday. KANUPP was shutdown on May 19, 2008 due to loss of KESC grid.

According to KANUPP spokesman, after the shutdown, extensive maintenance activities including inspection of Fuel Channels (Grayloc Seal Area), replacement of Primary Heat Transport System Pump Motor etc were carried out. These were essential safety requirements by the regulator before plant start-up.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan Signals China To partake In Iran-Pakistan-India Gas Pipeline​

(RTTNews) - Pakistan has signaled China asking it to participate in the $7.5 billion Iran-Pakistan-India or IPI gas pipeline project, in the event of India backing out of the venture, the media reported.

The progress on the project came to standstill after the discussions took place between India and Pakistan in Islamabad in April. Besides, the Indian Government is yet to resolve the issue of transit fee to be paid to Pakistan for Iranian gas transported across its territory.

Based on the request of President Pervez Musharraf during his recent visit to China, the Chinese Government has submitted a preliminary report to the Pakistani Government and sought more information on the project. Pakistan has also asked the Chinese Government to conduct a feasibility study for the pipeline project, the release stated.

Foreign Minister, Shah Mahmood Qureshi, who also holds the petroleum portfolio, is likely visit India on June 27 to initiate further discussions on the project. He added that if India pulls out of the project, the additional gas volume of 1.05 billion cubic feet a day would either be consumed by Pakistan or sold to China. Iran has no objection to China joining the pipeline project, the release said.

The Chinese technical experts had earlier expressed reservations over the execution of the project, as the border between Pakistan and China is more than 15,000 feet above sea level. This could, however, be reconsidered by conducting a detailed feasibility study, the minister reportedly said.

The minister understood to have stated further that China might import gas via Gilgit and Pakistan's Northern Areas would stand to benefit. The Karakoram Highway would be widened, if China's involvement in the project were confirmed.

Pakistan has already proposed the construction of a corridor that would link China and Pakistan by rail, road and fibre-optic cables, the report stated.

Pakistan Signals China To partake In Iran-Pakistan-India Gas Pipeline

 

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Pak share in world trade drops 9.5pc ​

Friday, June 20, 2008

LAHORE: The high economic growth in Pakistan has not improved its trade performance as its share in world trade has declined by 9.5 per cent in 2007, while its competing economies China and India recorded an increase of 11.3 per cent and 9.3 per cent respectively.

In fact, the world trade indicators released by the World Bank point out that Pakistan’s weak trade performance clearly dragged down the entire South Asia, which contains only a few, mostly large, countries.

According to the report, Pakistan also has a low trade integration ratio of 41.9 per cent (trade as percentage of GDP) when compared with India’s 45.2 per cent and Bangladesh’s 47.5 per cent. The real trade growth in Pakistan was 0.9 per cent while in China, it was 21.7 per cent.

The report points out that the slowest trade growth rates were for Pakistan and Sri Lanka (less than 1 per cent and 6 per cent respectively). Rising food prices in Pakistan, related to developments in international markets and shortages in domestic supplies, led the government to restrict exports of wheat and rice. This had a significant impact on Pakistan’s trade performance, it added.

Economists point out that the decline in trade share of Pakistan at a time when world trade grew by over seven per cent should be an eye opener for economic planners. They said that time has come when the thrust of growth should be diverted towards productive sectors instead of promoting growth in the services sector. Unlike India or China, the services sector in Pakistan remained confined to the domestic market only. It created fewer jobs as well.

On average, South Asian states have some of the worst business environments across all regions. None of its countries is in the top 50 in the ‘ease of doing business’ rankings, and only two are in the top 100, Maldives (ranked 60th) being the region’s best performer and Pakistan (76th).

Despite a relatively better business environment in the region, Pakistan’s trade performance was much below others with a low ranking. For some of the smaller countries in the region like Nepal, Bhutan and Sri Lanka, political instability continues to be a problem, especially for foreign direct investment, new business development and growth in the important tourism sector.

Policy and institutional performance varies greatly among the countries in the region. Sri Lanka is still doing much better than its Continued from page 15

neighbours in all trade policy indicators and also has less protectionism than in the late 1990s.

World Bank points out that countries that have the best policies and institutions overall, also tend to have a stronger and more consistent trade performance. This point should be taken seriously by the economic managers of the country as institutional performance in Pakistan is still on the decline.

According to the report, percentage decline in tariff in South Asian States is the largest, as it still had the highest tariff levels, averaging 26 per cent. However, average tariffs do not reveal the whole pattern of protection. High-income countries have higher non-tariff barriers, greater tariff escalation and dispersion, and much higher maximum tariffs than low-income countries; ie, they protect certain sectors much more than others. Many of these protected sectors and goods are of special interest to developing-country exporters.

Besides flawed government policies, the decline in Pakistan’s trade share is also due to the fact that the garment exporters in developing countries face restrictions on their exports on average that are more than double those faced by the rest of the developing world. Garments and textiles account for more than 60 per cent of Pakistan’s exports. Garment and textiles exporters also face higher tariffs than the rest of the world.

Pak share in world trade drops 9.5pc

 

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KPT registers 25pc growth in cargo handling ​

Friday, June 20, 2008

KARACHI: The Karachi Port Trust has said that this year cargo handling at the KPT registered a growth of 25 per cent. KPT is handling over 101,000 tonnes of cargo daily and has crossed the figures of 37 million tonnes, a press release said.

KPT has deepened its channels to 12 metres for handling larger vessels. By the end of the current fiscal year, KPT projects are to handle 61 per cent of the total container volume of 1.97 million TEU (Twenty fee Equivalent Units) handled by the two ports, KPT and Port Qasim.

The total seaborne trade handled by the two ports during the last 11 months comes to 58.10 million tonnes, of which the share of dry cargo exports at KPT remained 65.39 per cent.

Liquid cargo has shown recovery and is growing by 14 per cent at Karachi port. Liquid cargo exports, which mainly comprises Molasses, Naphtha, Ethanol and other chemicals, has crossed the 2 million benchmark by registering 2.02 million tonnes this year.

Dry cargo coal handling in Karachi Port has reached 3.5 million tonnes. In exports, the cement handling through bulk or bags has crossed the 2 million tonnes mark. It is for the first time in history that Pakistan is exporting cement as a bulk commodity.

Four silos are being constructed at the port which when completed, would further increase the cement exports.

KPT has also handled 0.9 million tonnes of clinker exports during the last 11 months, which is another record achieved by the port.

The containers handling at KPT have remained on the rise throughout the year. So far, it has registered 11 per cent growth by recording 1.149 million TEU handling till 12th June 2008. Previously in the year 2005-06, KPT recorded handling of 1.144 million TEU containers.

The container terminals, both KICT and PICT, have shown progress. Presently PICT is handling 39 per cent, while KICT handles 50 per cent of the total container volume. The remaining 11 per cent were handled at other berths of KPT.

This year up to 12th June, KPT has handled 2024 ships. This commendable performance is despite the fact that eight berths at East Wharf were not utilised due to their reconstruction.

Construction of a 16 metres deep quay wall is already underway by a Korean company Ssang Yong at East Wharf. KICT has installed two Super Post Panamax Gantry Cranes to handle large ships carrying 5000 TEU containers. Recently the KICT has handled 4500 TEU containers from a Post Panamax ship “Hundai Admiral” at its berth.

KPT registers 25pc growth in cargo handling

 

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Pakistan to take part in Indian fair ​

Friday, June 20, 2008

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) will organise Pakistan’s participation in the India International Trade Fair (IITF) to be held from 14th to 27th November at Pragati Medan, New Delhi, India. FPCCI has especially invited manufacturers to participate in the event.

The SAARC countries will be given a special gesture by the Fair Authority, considering their participation on a national level. Pakistan’s participation in IITF provides opportunities to Pakistani companies to make in-roads in Indian markets.

FPCCI has tentatively reserved space of 1000sq meters for Pakistan Pavilion and invited applications from the interested companies through its member bodies all over Pakistan by 10th July 2008.

Spot sale is allowed in the fair and the exhibits profile includes textile, general engineering, automobiles, consumer goods, pharmaceuticals and surgical instruments, cosmetics and toiletries, IT and electronic goods, gems and jewellery and education and fashion.

Pakistan to take part in Indian fair

 

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15 percent shares of MCB Bank: Maybank makes $666 million payment ​

LAHORE (June 20 2008): Malayan Banking Berhad (Maybank) on Thursday remitted $666 million (Rs 44 billion) to Pakistan (on Monday value) as payment for 15 percent shares of MCB Bank Limited. Maybank had signed an agreement for the purchase of upto 20 percent ordinary shares of Nishat Group on May 3rd, 2006.

The purchase price was reportedly Rs 470 per share for 15 percent share with a put option for 5 percent further sale within one year with Nishat Group. On Thursday, MCB Bank's shares closed at Rs 263.63 per share. It took nearly six weeks for the deal to obtain necessary approvals from the regulators in both the countries.

SBP reportedly gave its final approval on June 17, 2008 after the deal was approved by Bank Negara (BNM) Malaysia. Sources in MCB expressed their appreciation of the help given by SBP and the Ministry of Finance in final conclusion of the deal.

The remittance advise from Maybank puts to rest the anxiety and fears expressed about its unravelling due to the steep fall in share prices in Pakistan during the last six weeks due to political uncertainty amid growing economic difficulties.

Malaysia's largest financial institution has taken a long-term view as the MCB fundamental strength continues to be unaffected. With time deposits of only 10 percent compared (to 25-30 percent in the industry) and 90 percent of current and saving deposit - MCB continues to outperform its peers with low cost deposits.

Having a Reform of Assets (ROA) of four percent; Return on Equity (ROE) of 30 percent; and the lowest administrative cost among large banks, the Maybank deal will further boost the deposits of MCB and place it in an advantageous position in tight liquidity environment. The purchase price of Rs 470 per share represents 5.4 times MCB book value.

Business Recorder [Pakistan's First Financial Daily]

 

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Govt expects to earn Rs82bn in FY09 dividend​

KARACHI, June 19: The government expects to earn dividend of Rs82 billion for the financial year 2008-09, from its investment in the stock market. Holder of almost half of the market, the government supplemented its income through dividend earnings of Rs78.7 billion in 2007-08.

The budget documents for 2008-09 projected 4 per cent higher earnings in returns from the government’s investment in the stock market listed companies, over what it made in the year to end on June 30, 2008. Given the bottomless pit to which the equity market is currently heading, many analysts are taking a conservative view over the government’s expectations on corporate earnings growth and therefore their propensity to pay higher dividends.

Analyst Syed Abid Ali at Taurus Securities has worked out the per share dividend of listed companies budgeted for 2008-09 (in which the government holds considerable stake).

OGDC is expected to provide dividend per share at Rs10.94, which would give a yield of 8.65 per cent; followed by SNGPL with dividend at Rs3.04 and yield at 6.44 per cent; PSO dividend at Rs22.85 and yield at 5.35 per cent; FFL per share dividend at Rs12; yield at 4.54 per cent; SSGC per share dividend at Rs1.13; yield at 4.26pc; NBP dividend at Rs6.51, yield at 3.95 per cent; PTCL per share dividend at Rs1.32; yield at 3.22pc; ABL dividend Rs1.99; yield 2.51pc; PNSC dividend Rs1.70 per share; yield 2.30pc and Mari Gas per share dividend for the upcoming year has been projected by the government at Rs3.13, which would provide a yield at 1.06pc.

Taurus Securities thought that the budgeted numbers for FY09 were “reasonable and achievable”, as they were quite in line with the past trend. But many other analysts expect a dip in corporate profitability. They feel that the calculations were made by the government in better times.

“The stock market has lost nearly a quarter of its value in two months,” says a stock strategist. With no end to the gloom and doom scenario and the worrisome government deficit numbers, all listed companies including those in which the state holds controlling stake, would be hard pressed to keep up their earnings growth for the FY08-09.

Govt expects to earn Rs82bn in FY09 dividend -DAWN - Business; June 20, 2008

 

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Govt plans to carry out major mining projects​

RAWALPINDI, June 19: Although there is uncertainty and law and order situation in certain areas of the NWFP and Balochistan, the government plans to carry out major mining projects during the next fiscal year for exploration of minerals, official sources told Dawn.

Under the annual plan for 2008-09, an allocation of Rs221.9 million has been made for mineral sector, and major projects to be carried out include feasibility study of gasification of Thar coal, national coal policy, exploration and evaluation of coal fields of Chamiang-Bala Dhaka, Bahlol and parts of Ghazi Basin in Balochistan and establishment of a project monitoring and evaluation cell.

Statistics show that only 37 per cent of the country is geologically mapped to a scale of 1:50,000 while geophysical surveys of gravity and magnetic have even less coverage at 21 per cent of the total area. Adequate institutional, human, research and development and other relevant infrastructure exists but remains under-utilised.

Despite the fact that Pakistan is blessed with rich and diversified mineral potential, the government was still nurturing environment to build the mineral sector as a potent factor in the national economy.

Considering that its development is inadequate and slow because of the nature of mineral industry being extra-ordinary complex and complicated and other technical, financial and organisational problems, necessary steps would be taken for their resolution and rectification.

However, the national mineral policy announced in 1995 has become outdated after more than a decade and there is a need for bringing improvements with a view to making it more investment friendly.

The government has already declared development of mining industry as priority sector but progress so far remains slow in monitoring and implementation.

In the meantime, a mega project near Saindak, namely Reko Dik copper-gold project in Balochistan, would be launched by the world’s largest copper and gold producing company with an investment of one billion dollars by 2010 to produce 0.3 million tons of copper annually, thus bringing Pakistan for the first time on the world map as a major copper producing country.

In the same vein, Duddar lead-zinc deposits in Balochistan are being developed and are expected to come in production by the end of 2008 to produce 100,000 tons of zinc concentrates and 33,000 tons of lead concentrates for export.

Similarly, development of Thar Coal field in Sindh containing 175 billion tons, one of the largest good quality lignite deposits in the world, on completion would be used for power generation and gasification.

Govt plans to carry out major mining projects -DAWN - Business; June 20, 2008

 

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Pakistan to get Rs 300 billion loans, grants during fiscal year 2009 ​

KARACHI (June 20 2008): Pakistan will get some Rs 300 billion (around four billion dollars) foreign assistance in the shape of loans and grants for the next fiscal year from international financial institutions and different countries to run its development and non-development programmes smoothly.

The Finance Division has estimated overall Rs 300.169 billion loans and grants from external sources during fiscal year 2008-09, which is some 16.1 percent or Rs 41.636 billion higher than the budget estimates of current fiscal year 2007-08.

For the current fiscal year the ministry had estimated some Rs 258.533 billion worth revenue from external resources up by 3.10 percent compared to FY07, however in the revised budget estimates of the finance ministry, it surged to Rs 275.406 billion.

The external loan estimates including project loans, programme loans, earthquake loans rose by 24 percent to Rs 283.776 billion for next fiscal year as compared to Rs 229.685 billion estimates in FY08. While revenue estimates through external grants depict a decline of 43 percent to Rs 16.393 billion in 2009 as against Rs 28.848 billion in fiscal year 2008.

Foreign project loans at Rs 70.055 billion for federal government and provinces, while programme loans have been estimated at Rs 145.625 billion for FY09. Some Rs 46.417 billion project loans have been estimated for federal government projects comprising Rs 23.019 billion for the ministries and divisions and Rs 23.398 billion for provinces.

Finance department has estimated Rs 23.638 billion loans for provinces and Rs 5.596 billion for earthquake loans. Loans through Eurobonds have been estimated at Rs 31.075 billion in the current fiscal year, however due to the internal and external shocks bonds could not be issued and therefore the government has again set a revenue target of Rs 31.250 billion through bonds in FY09.

In addition, external grants in FY09 stand at Rs 163.93 billion comprising project grants of Rs 6.739 billion, federal grants Rs 4.874 billion, provinces Rs 1.865 billion, budget support grants Rs 5.419 billion and earthquake grants Rs 4.235 billion.

Business Recorder [Pakistan's First Financial Daily]

 

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Budget 2008-09: Rs 3.29 trillion charged expenditure presented before National Assembly for debate ​

ISLAMBAD (June 20 2008): The government has presented Rs 3.290 trillion charged expenditure including demands for grants and appropriation for 2008-2009 before the National Assembly for debate. The National Assembly is not in a position to approve or disallow such charged expenditure.

However, such expenditures could be tabled before the house for discussion under clause 1 of Article 82 of the Constitution of Pakistan. Some of the MNAs strongly criticised that why the demands for grants have been placed before the house, as no changes could be proposed under the Constitution. There are certain grey areas where appropriate steps are needed to remedy the situation.

The major chunk of Rs 3.290 trillion charged expenditure included around Rs 2.557 trillion amount pertaining to repayment of domestic debt, which is increasing rapidly with the depreciation in Pak rupee.

Break-up of charged expenditure showed that the amount related to superannuation allowance and pensions; grants-in-Aid and miscellaneous adjustments between the federal and provincial governments; other expenditure of foreign affairs division; civil works; national assembly/senate; Pakistan Railways; external development loans and advances; staff, household and allowances of the President; servicing of foreign debt; foreign loan repayment; repayment of short term foreign credits; audit; servicing of domestic debt; foreign loans repayment; repayment of short-term foreign credits; supreme court; Islamabad high court; election; Wafaqi Mohtasib and Federal Tax Ombudsman.

The National Assembly has also approved 179 heads of expenditures of different government departments and development expenditure of various divisions through voting.

During the voting of different government expenditures, the Speaker had to do counting of members to get approval of the expenditure of Rs 4,788,052,000 for defence division. 119 MNAs were in favour and 25 opposed the allocation.

Expenditure, particularly of Presidency came under heavy criticism and Ahsan Iqbal of PML-N said that the allocation of Rs 35 crore for the Presidency is totally unjustified. It seems a joke that the President of a poor nation whose debt servicing and balance of payment gap is increasing with each passing day is spending so lavishly on staff, household expenses etc he said.

During the last regime of former president Rafiq Tarar, the expenditure of the Presidency was brought down to Rs 16 crore, which has now again revised upward to Rs 35 crore for 2008-2009. Syed Hamid Saeed was of the view that if the Parliamentarians were not in a position to revise the charged expenditure, there is no need of discussion in the house.

Sher Baloch said that the external debt is one of the major problems being faced by the country as it is increasing with each passing day and the performance of our textile sector which is major revenue spinner is deteriorating putting more pressure on national economy. Dr Abdul Qadir said that inflation and price hike are key issues, which should be addressed by the government on top priority basis. Abdul Ghufur Chaudhary stated that the constitution should be amended to permit changes in the charged expenditure of the above mentioned government departments. Another MNA proposed reduction in total number of army, navy and air force personnel in all cadres of the armed forces.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan and Turkey bilateral trade can be doubled: SVP KCCI ​

KARACHI (June 20 2008): Senior Vice President, Karachi Chamber of Commerce and Industry (KCCI) Iftikhar Ahmed Sheikh has said that trade between Pakistan and Turkey can be doubled in just one year with little efforts and frequent exchange of trade delegations. Addressing a press conference on return of ten members trade delegation of KCCI from Turkey, he said that at present two ways trade is just 750 million dollars.

While Turkey's total imports from world over is around 170 billion dollars. Pakistan's share in imports is almost negligible. He pointed out that biggest hindrance in development of two-way trade is unawareness of existing trade potential in each other countries.

The senior vice president KCCI informed that during stay in Turkey the delegation has signed an agreement with Musiad, Istanbul Chamber of Commerce to disseminate information related trade, investment, products and joint ventures on regular bases.

He pointed out that Turkey was importing rice from India and other countries on double of prices on which Pakistan exporting its rice to other countries. Rice has been in good demand in Turkey and Pakistan can easily capture this market with little persuasion of rice exporters. Iftikhar Ahmed Sheikh pointed out that Turkey was importing surgical goods from Germany. Likewise, Turkey was importing mangoes from UK. "They are unaware that these are quality products of Pakistan".

Replying to a question, he said that Turkey is interested to import vegetables, rice, surgical goods, pharmaceutical products, construction material, raw hides and skins, and having joint venture in different fields. The delegation has discussed in detail about possibilities of export of these products with relevant corners, he added.

He said that Turkey also wants to cooperate with Pakistan in education, banking, insurance, health sectors, etc. The senior vice president KCCI said that two Turkish trade delegations would visit Pakistan by the end of this year as follow-up of KCCI delegation.

He prays the services of Pakistani Consul General and criticised services of Pakistani Ambassador. "The ambassador has no knowledge of trade and even he didn't know how to develop it further".

He noted that KCCI had signed MoU with Musiad, Istanbul Chamber of Commerce and Istanbul Chamber of Industry but since last six years there was no progress on these MoUs. The visit of Turkey is to activate both sides to act and boost two way trades.

Business Recorder [Pakistan's First Financial Daily]

 

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Balochistan asked to find new income sources ​

Saturday, June 21, 2008

KARACHI: The Balochistan Economic Forum has issued an economic advice, emphasising that the Balochistan government must find new and dependable sources of income to reduce its dependence on the federal government for financial needs.

In a press statement, the forum said severe financial problems in Balochistan should be an eye-opener for the new political leadership and economic planners of the province and they should draw a comprehensive economic and governance strategy that would facilitate tackling of challenges and also consider seriously to prepare a strong economic foundation to get rid of total dependence on the federal divisible pool.

The Balochistan government should widen its revenue base by encouraging foreign direct investment and seeking support of international aid agencies and multilateral institutions in the socio-economic development of the province with the cooperation of the federal government, the forum advised.

It further said the political leadership should also make efforts to remove economic disparity in Balochistan as foreign investments in the industrial and mining sectors might open new avenues of development and prosperity.

The government should mobilise all its energies and resources to speed up the industrialisation process in the province in order to successfully manage existing economic problems, the forum said.

“The investment scenario in the province is now bright because of foreign investors’ interest in exploitation of abundant resources in the mineral, fisheries, agriculture and livestock sectors and the province could develop into a major trading and business centre, as the potential of Balochistan is now widely understood.”

Balochistan received more attention with the establishment of Economic Cooperation Organisation (ECO) as the province provided a gateway to all ECO member countries,” the forum added.

Balochistan asked to find new income sources