Pakistan Economy - News & Updates - Archive

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Tuesday, June 24, 2008

‘Progress on FTA with Pakistan has been fast’​

BEIJING: Noting the Free Trade Area (FTA) is an agreement between nations to eliminate or reduce tariffs and quotas on most goods traded between them, the Chinese media said that the progress on the FTA with Pakistan has been fast.

In April 2005, when Premier Wen Jiabao visited Pakistan, the two sides said they would start FTA negotiations. A little over a year later, the China-Pakistan commodity trade agreement was signed, the English language China Daily reported Monday.

China is now involved in more than 10 FTA negotiations with 29 countries and regions from around the world, including the Asia-Pacific region, Latin America, Europe, Africa and Oceania.

Daily Times - Leading News Resource of Pakistan

 

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Australian company to invest $1bn in mining​

ISALAMABAD: The world’s largest copper and gold producing Australian company, with an investment of $1 billion, will launch a mega project— Reko Dik Copper-gold— near Saindak in Balochistan by 2010.

The project would help the government to produce 0.3 million tonnes of copper annually, thus bringing the country for the first time on the list of major copper producing countries of the world. Senior officials told Daily Times here Monday that in the same vein, Duddar lead-zinc deposits in Balochistan are being developed and expected to commence production by end 2008. The expected production from these deposits is 100,000 tonnes of zinc concentrates and 33,000 tonnes of lead concentrates, the export of which will bring precious foreign exchange.

Officials in the Ministry of Petroleum and Natural resources further informed that development of Thar coal field in Sindh, containing 175 billion tonnes of coal, which are of best quality lignite deposits in the world, on completion would be used for power generation and gasification. Similarly all the non-glamorous minerals, having immense socio-economic benefits would be fully utilised. The abundantly available gypsum deposits would be utilised for producing gypsum plaster to partially replace cement in housing sector. Reclamation of saline-sodic soils and treatment of low quality tube wells water through the application of gypsum would bring socio-economic impacts in rural areas, generate gainful employment and improve crop yield.

Phosphate rocks of NWFP would be exploited to set up Phosphatic fertilizer industries, dimension stones, precious and semi precious stones industries along with the establishment of other mineral based industries to meet the increasing demand of various sectors of the economy.

In the annual budget 2008-09, the federal government has earmarked Rs 221.9 million for minerals (non-fuel) sector. Major projects to be carried out during 2008-09 include: feasibility study gasification of Thar coal worth Rs 104 million, national coal policy worth Rs 22.7 million, exploration and evaluation of coal fields of Chamlang-Bala Dhaka, Bahlol and parts of Ghazi Basin in Balochistan worth Rs 10.9 million and establishment of project monitoring and evaluation cell worth Rs 18 million.

Pakistan is blessed with rich and diversified mineral potential due to favourable geological environment. The government has been and is still nurturing environment to build the mineral sector as a potent factor in the national economy. The officials further said that potential of the country in this sector is widely recognised but the sector is not developed. The government made the development of the mining industry as ‘priority sector’ in various five years plans, but none of these efforts were materialised. Adequate institutional, human, research and development and other relevant infrastructure have been established for improvement of this sector but they remain under-utilised.

Daily Times - Leading News Resource of Pakistan

 

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Makro Cash and Carry to invest $300m in Pakistan

ISLAMABAD: A team of leading local and international investors held separate meetings with the Prime Minister, Syed Yousaf Raza Gillani and showed keen interest in furthering their investments in Pakistan.

Makro Cash and Carry would invest $300 million for setting up of 30 more retail outlets in Pakistan. Mr Farhad Zulfiqar, Executive Chairman, Makro Habib Pakistan told the Prime Minister that Makro Cash and Carry has 172 stores worldwide in five countries of Asia and four countries of South America and has an annual turnover exceeding four billion Euros. staff report

Daily Times - Leading News Resource of Pakistan

 

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All subsidies to be scrapped by year’s end: Ahmed Mukhtar

ISLAMABAD: All the subsidies provided by the government on various items would be scrapped by the end of the year, Minister for Commerce, Chaudhry Ahmed Mukhtar, informed the National Assembly Tuesday.

Speaking on a Calling Attention Notice in the National Assembly, he said, “subsidies on gas and electricity are gradually being removed and the people will have to learn to live without subsidies.” and added, “government does not have surplus funds for the energy sector.”

He expressed concern over import of raw material in the country and said over one billion dollars were spent on the import of cotton. He said reduction in the import of food items which are available in the country, will have a positive impact on the economy. He said that the imposition of 35 percent margin on Letter of Credit (LC) for raw materials is to curb or make difficult the import of food items readily available in Pakistan, as the government cannot completely ban them under the WTO regime. staff report

Daily Times - Leading News Resource of Pakistan

 

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Governance has deteriorated in Pakistan: World Bank report ​

Wednesday, June 25, 2008

LAHORE: The rhetoric of the previous regime about good governance has been exposed by the World Bank report ‘Governance Matters VII’ that states that governance in Pakistan deteriorated to the lowest ebb in 2007 than a decade ago.

Latest governance indicators, evaluated by the World Bank for all its member countries, include voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law and control of corruption. On almost all counts, the governance was better in 1998 than in 2007. In fact, Pakistan’s governance level was much lower than India and China and in some cases even below Bangladesh.

It has been separately proved by a World Bank research that better governance ensures better economic growth. Each of these governance indicators is evaluated on a scale of plus and minus 2.5. Positive 2.5 indicates highest level of governance and negative 2.5 represents lowest level of governance.

Pakistan falls in the negative zone in all the above governance indicators that call for massive reforms in all spheres of life. However, in 1998 its score was -1.33 that increased to the extreme of -2.44 in 2007. In the African state of Rwanda, the governance level improved from -2.15 in 1998 to -0.19 in 2007. Even in China that is accused of human rights violations, the score was -1.70 while India with a score of -0.38 and Bangladesh -0.63 performed much better.

The voice and accountability indicator measures the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and free media. This freedom was never ideal in Pakistan. The voice and accountability score was relatively better at -0.74 in 1998 but it deteriorated to -1.05 in 2007.

India with a score of -0.38 is the best in the region while China with -1.70 is the worst. Bangladesh’s score on this count was -0.63 that is 40 per cent better than Pakistan.

Pakistan scored the worst on the political stability and absence of violence indicator that measures perceptions of the likelihood that the government will be destabilised or overthrown by unconstitutional or violent means, including politically-motivated violence and terrorism. The political stability in Pakistan has never been ideal. In 1998, its score was -1.33 that increased to -2.44 in 2007. Even a country like Rwanda has improved its standing on this count from -2.15 in 1998 to -0.19 in 2007. China with a score of 0.33 is the most politically stable country in the region followed by India with -1.01 and Bangladesh -1.44.

The government effectiveness indicator measures perceptions of the quality of public services, the quality of civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation and the credibility of the government’s commitment to such policies. Pakistan’s score improved marginally on this count from -0.66 to -0.62 in 2007.

India with -0.03 was the best and Bangladesh with -0.81 is the worst country on this count. China’s score of -0.15 is good from the regional perspective.

On regulatory quality, which measures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development, Pakistan’s performance deteriorated from -0.47 in 1998 to -0.56 in 2007. India, China and Bangladesh scored -0.22, -0.24 and -0.86 respectively.

Rule of law is the indicator that measures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Pakistan’s performance worsened from a score of -0.79 in 1998 to -0.96 in 2007. India has a far better score of -0.10, while China -0.45 and Bangladesh -0.81 have better governance in this regard.

The control of corruption indicator measures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as “capture” of the state by the elite and private interests. Bangladesh scored -1.05, China -0.66, India -0.39 and Pakistan -0.83, a slight improvement from -0.89 in 1998.

Governance has deteriorated in Pakistan: World Bank report

 

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KSE breaks all previous records in one day​

* Stocks gain historic high on revision in lower, upper limits and ban on short-selling​

KARACHI: Karachi stock market has broken all its previous records of single day gain when benchmark KSE-100 index rallied by 960 points Tuesday.

After losing 4,500 points in two months due to number of issues, KSE-100 index bounced back strongly on the back of what the market players and analysts pointed out the ban on short selling and revision in lower and upper circuits measures taken Monday by apex regulator. The KSE-100 index closed on 12,122 points level compared to 11,162 points level in the last session, registering 8.60 percent increase.

The previous single day gain was witnessed on January 3, 2008 when 100 index moved by 643 points following crash of the market in the aftermath of Benazir Bhutto assassination on December 27 last year. Though the recovery of the market and highest single day gain is termed a positive development following strong negative sentiment in the last two months, however eyebrows have been raised on the way the market reacted to this latest regulator.

“The buying euphoria doesn’t seem to be genuine one. The way market recovered appears to be manipulated”, analysts believed.

They pointed out that stock market players were referring the decline in the market to political uncertainty and deteriorating economic scenario. “The situation on these fronts is same and has even worsened with the disqualification of Nawaz Sharif for election by the court”, they noted adding that it seems there is something suspicious behind all this game.

“It is now distorted market where there is no concept of free trading. It has been regulated through revision of lower and upper circuit breakers thus making it a buying market and leaving little option for selling”, one analyst said adding that such things are not practiced in those markets, which move on fundamentals. He said latest measures were seemed to be taken to pull the big funds and big investors out from the trap they have fallen in the last crash.

However, Dawood Jan Mohammad, director Karachi Stock Exchange (KSE) strongly contended the argument that there was any kind of manipulation to take the stocks to new heights. If the people were talking about enhancing the upper circuit limit, he pointed out then there was no bar to exit the market.

He also attributed the strong buying across the board to ban on short selling which caused heavy damage to the market in the recent times and predicted further improvement in the coming sessions.

Analysts said it remained to be seen whether market could sustain this bullish trend in the present scenario of growing political instability and deepening economic woes.

They cautioned retail investors should be careful to enter the market at this particular time and wait for some time to see whether this buying trend was genuine or manipulated for the advantage of few bigwigs.

They said trading volumes were not matching with the massive buying in Tuesday’s session which improved not heavily as it stood at 183 million shares compared to 154 million shares in the last session.

Daily Times - Leading News Resource of Pakistan

 

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$150m democracy dividend for Pakistan​

* Amount will be in addition to allocations Pakistan will receive under budget for 2009​

WASHINGTON: Pakistan was cleared by the United States House of Representatives on Tuesday to receive a “democracy dividend” of $150 million from the war supplemental budget for 2008-2009.

This amount will be in addition to allocations Pakistan is to receive under the regular budget for 2009 for which a total of $901 million has been requested by the administration.

The measure has already been approved by the Senate and it only now remains to send it for the president’s signatures.

Both Senator Joseph Biden and Senator Richard Lugar had proposed that Pakistan be given a “democracy dividend” to mark its return to civilian rule. As part of the war supplemental budget, the House also approved $455 million for Afghanistan to help the country reinstate its economic infrastructure.

Daily Times - Leading News Resource of Pakistan

 

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US releases $523m in aid​

WASHINGTON, June 24: The United States has released and approved more than $523 million to Pakistan over the past two days, doing away with the impression that Washington may bring financial restrictions on Islamabad to spur it to do more in the war against terror.

The US House of Representatives approved $150 million of economic assistance to Pakistan on Tuesday, which is additional to the aid Pakistan gets under a $3 billion package signed during President Pervez Musharraf’s visit to Camp David in 2003.On Monday, the United States transferred $373.841 million to Pakistan from the coalition support fund. The fund is used for reimbursing Pakistan for the expenses it incurs during anti-terrorism operations along the Afghan border.

“We are still looking forward to a long-term commitment from the United States, manifested in a democracy dividend of at least $1.5 billion a year as proposed by two of the wisest senators of the US, Biden and Lugar,” said Ambassador Husain Haqqani while commenting on the release of US funds to Pakistan.

“All disagreements between Pakistan and the US will be resolved. And we will not let anything come between our visions of a strategic partnership between the two democracies,” he said.

The release of $373 million from the coalition support fund clears dues up to November 2007. Pakistan is still to be reimbursed for November 2007 to March 2008 while Islamabad has not yet submitted bills for the March-May period.

Pakistan receives between $80 to 90 million a month from the coalition support fund. But recently, the reimbursements faced severe criticism from US lawmakers who claimed that Pakistan was using this money to buy weapons that can only be used in a conventional war against India and not for fighting insurgents.

Islamabad countered the argument by saying that reimbursement is not aid and Pakistan is free to use this money for whatever it wants to purchase.

The US administration initially accepted Pakistan’s argument but later tightened the reimbursement procedure following claims in the US Congress that Islamabad was inflating its expenses.

The US administration remains divided on this issue.

US releases $523m in aid -DAWN - Top Stories; June 25, 2008

 

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PC says privatisation to yield Rs122bn ​

Wednesday, June 25, 2008

ISLAMABAD: The Privatisation Commission on Tuesday categorically rejected the notion of cutting privatisation proceeds in the next fiscal year and claimed that in the year 2008-09, most of the entities would be privatised, which is expected to realise sale proceeds of about Rs122 billion.

“There is no plan to cut privatisation proceeds in the year 2008-09,” a Privatisation Commission spokesman said while referring to a news item which stated that privatisation proceeds’ target has been cut by 98 per cent.

“The preparatory work done during the current financial year will help the Privatisation Commission to privatise most of the entities during the next fiscal year (2008-09), which is expected to realise sale proceeds of Rs122 billion approximately.”

The PC spokesman said that for FY 2007-08, privatisation proceeds target of Rs75 billion was envisaged considering the privatisation of HBL GDR, OGDCL GDR, KAPCO GDR, PTCL half yearly installments, strategic sale of PSO, SME Bank, Coal & Salt Mines projects and some other industrial units. Against this target, the Privatisation Commission has been able to achieve privatisation proceeds amounting to Rs27 billion so far, he stated.

He pointed out that the estimates of proceeds on account of privatisation are subject to favourable geopolitical and enabling environment, market appetite and investors interests. While the Privatisation Commission has been actively working on all of the above-mentioned transactions, major transactions could not be finalised due to national and international factors, he said.

In case of entities directly owned by the Federal government, the sale proceeds realised by the PC are transferred to the Ministry of Finance, while certain proceeds are transferred to other entities whose shares are sold and who are entitled to such proceeds, he added. The proceeds received by such entities are subsequently transferred to the Government of Pakistan in the shape of dividends/profits, the spokesman concluded.

PC says privatisation to yield Rs122bn

 

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Power plant import: long-term financing allowed ​

KARACHI (June 25 2008): The State Bank of Pakistan (SBP) has allowed import of power plant and machinery under 'Long Term Financing Facility (LTFF). This step has been taken on the request of exporters and industrialists to meet their power requirements due to continuing power shortage across the country.

The SBP, with reference to LTFF Scheme MFD Circular No 07 dated December 31, 2007, has advised that from July 1, 2008 financing for import of generators and captive power plants, to be used in the eligible sectors and sub-sectors as per list given in Schedule 1 of LTFF Scheme, will also be admissible under the Scheme.

This move of SBP would help industrialists and exporters to get their own power plants and machinery under soft loan scheme, as presently country is facing huge shortage of power.

Business Recorder [Pakistan's First Financial Daily]

 

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Government considering pledging Tarbela machinery ​

ISLAMABAD (June 25 2008): The government is considering pledging Tarbela dam's machinery to generate approximately $8.25 billion for Diamir-Bhasha dam as finances from external sources, particularly from international financial institutions, do not seem to be forthcoming for the purpose, official sources told Business Recorder here on Tuesday.

Representatives from Pakistan and India, sitting on the Board of Directors of the World Bank and Asian Development Bank (ADB), have dealt with interventions in the disputed territory of indian held Kashmir by expressing strong reservations about extending any assistance to this area. The exception was in 2004 when ADB Board of Directors approved two loans-one for the Indian held Kashmir and the other in AJK.

Sources said that despite promises by ADB Director General in 2006 that assistance would be considered for five dams proposed by Pakistan government, including Diamer-Bhasha, no assistance is expected.

The World Bank and ADB had declined to extend financing for 969 mw Neelum-Jhehlum hydropower project, being set up in Azad Kashmir. However, the government successfully raised $1.2 billion from different sources, including 10-paisa project-specific tariff increase.

"As the WB and ADB did not agree to finance Diamir-Basha Dam, we are considering hedging turbines of Tarbela Dam to arrange funds from other international financial institutions," sources said. They said that detailed engineering design and tender documents of the project would be ready within a couple of weeks after which it would be ready for international tendering.

The Cabinet in April took a decision that fresh approval for small and large dams must be sought from the Prime Minister, which has not been taken so far. They said that the issue of compensation for the displaced population of Diamir-Bhasha dam was creating some misunderstanding among the possible donors as they have expressed reservations about financing the project.

Sources said that if all things went as planned, construction work on the 4,500 mw Diamer-Bhasha Dam would commence in June next year. Likewise, Kohala Hydropower Project (1,200 mw) and Bunji Hydropower Project (5,400 mw) are expected to start in 2010 and 2011, respectively.

The cost of Diamer-Bhahsa dam with storage capacity of 6.34 million acre-feet (MAF) with power generation capacity of 4,500 mw, has increased from $6.5 billion to $8.52 billion because of the revision of seismic design, displacement of axis by one kilometre required for the foundation of the dam, and strengthening of the weathered rock of the dam.

Another official said that 35 MAF water is wasted every year, equivalent to the capacity of six Bhasha dams, despite the fact that the country is currently facing a 9 MAF shortage which would grow to 15-20 MAF by 2020. It is pertinent to mention here that the present government has scrapped one of the most controversial dams of all times, namely Kala Bagh dam.

Business Recorder [Pakistan's First Financial Daily]

 

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Zong continues its rapid network expansion ​

ISLAMABAD (June 25 2008): Zong, the first international brand of China Mobile continued its rapid network expansion in the country by launching its services covering the cities of Gilgit, Hunza, Skardu, Besharn and Sust. The expansion is part of the company's chalked out plans to have the largest network coverage in the country.

Mir Ghazanfar Ali Khan, Chief Executive Northern Areas Legislative Assembly was the chief guest at the launching ceremony held in Gilgit. Also present on the occasion were senior Zong management officials, members of the media and the civil society.

Zong is rapidly expanding its coverage in Pakistan, with an aim to offer seamless connectivity throughout the country. It has added over 2000 sites since its launch and the network cell sites have grown from about 900 to over 3000 today. By the end of 2009, just two years from the start, the cell sites are targeted to grow to over 10,000.

"We believe Zong will have a clear edge over the competition in the Northern Areas especially, as China Mobile has huge experience of network operation in similar high mountainous areas in China itself," stated Zafar Usmani, the COO of CMPak Ltd. The region now being covered by Zong borders with China, with the Karakoram Highway (old Silk Route) playing a vital role in freight transportation. ZONG is also working towards ensuring the Highway's coverage.

Salman Wassay, the Marketing Director of CMPak Ltd stated that Zong is offering several promotions, services and packages to cater to different needs of a varied customer base. He said, "We have done considerable research In to customer needs and the Zong packages announced on Tuesday are based on these needs. For the first time users will get what they want, rather than being made offers that suit operational needs more than user needs."-PR

Business Recorder [Pakistan's First Financial Daily]

 

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KSE rebounds with curbs on short selling ​

EDITORIAL (June 25 2008): The Securities and Exchange Commission of Pakistan and the Karachi Stock Exchange, on Monday, took some emergency measures to avert the systemic risk in the wake of persistent fall in the market. Plus-minus five percent circuit breakers were changed to one and 10 percent for lower and upper single day movement in a share.

Short selling in deliverable futures has been banned. And, bank guarantees from 'A' rated banks have been allowed as margin in place of cash and securities. The SECP Chairman said these temporary measures are aimed to stabilise the market while protecting the existing risk management system of the exchange.

The acceptance of bank guarantees as margins, fulfils a long pending demand from the market players. It not only reduces the cost of doing business, but also enhances the liquidity (which is tight at the moment) and potential of participants to undertake more business.

Deliverable Futures Contract is a derivative product. It is a tool for arbitrageurs, hedgers and speculators. Prohibiting short selling in futures contract takes away a basic feature of the product. Therefore, this ban at best can operate only for a few days.

The cash as well as index futures systems are yet to take off. Is this due to supply side shortage on account of a ban on institutional participation? Or is it due to the opportunity for earning easy money through CFS, by institutions, the real reason for their failure? SECP and the Mutual Funds Association need to address this issue.

The SECP has restricted guarantees issuance to 'A' and higher rated banks. This may be in consonance with the eligibility of banks for participation in CFS Mark II system (beginning next month). The scope needs to be enlarged to include all scheduled banks.

After all, since the State Bank of Pakistan stands behind these institutions as the lender of last resort. Removal of this restriction would provide market participants greater opportunity and also escape monopoly of big brokerage houses and big banks.

Market players used to complain that the lock mechanism was not providing them an opportunity to exit. Well, they had an opportunity to do so on Tuesday. Where did all the sellers vanish? Why was every one a buyer yesterday? How come, no one availed of the exit opportunity? Something, indeed is not right!

Big brokers and KSE Directors had promised that the KSE Index would go back to the 15,000 level if the present capital gains tax free regime is extended for two more years. The PPP co-chairman, Asif Ali Zardari, despite opposition from both Finance Minister Syed Naveed Qamar and the Economic Advisory Council led by Shaukat Tarin, obliged the directors. But then the index after recovering for a day or two continued to drop.

Obviously, the ongoing political turmoil, the tightening of monetary policy, the persistent macro-economic imbalances and governance issues to check an economic down-slide weighed on the market. The fall of regional markets due to the food and oil (upward) price pressures showed KSE's fall was not exceptional.

But lately the value of a number of blue chip stocks on KSE dipped to low levels. There was no apparent logical reason for institutional investors, mutual funds or overseas fund managers to remain on the sidelines and not buy on such attractive prices.

Tuesday's market behaviour only reinforces the belief that these savvy investors were apprehending manipulation to push the market down. Who was doing it and for whose benefit needs to be probed. The decision to allow bank guarantees as margin will help in generating liquidity for the market.

Let us hope that this additional liquidity stays in the country and does not flow out for more real estate investment in UAE. Political stability and growing economic opportunities will bring the money back. If it happened after 9/11, it can happen again. But conditions to absorb this inflow must be there.

The SECP needs to lower the financial limit for Real Estate Investment Trust (REIT). The affection, respect and love the rich Pakistanis receive within the country are not available anywhere else, not even across the Gulf.

The opportunity provided in the budget to bring assets from grey to the tax economy by paying 2 percent tax is not a sufficient inducement. The return earned on investment in agriculture, industry and infrastructure projects needs to be more than the existing return potential provided in the tax evaded sector.

Business Recorder [Pakistan's First Financial Daily]

 

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Poor governance and corruption ​

EDITORIAL (June 25 2008): The World Bank report titled World Bank Indicators 2008 states that Pakistani exports face a much greater challenge than those of other South Asian countries mainly because of less favourable governance environment and weak control on corruption.

There is little doubt that in spite of tall claims made by the Musharraf government during the last eight years, which were supported by the annual reports of the National Accountability Bureau, the perception that accountability was restricted to members of the political opposition was never dispelled.

And ironically this limited accountability was further compromised when President Musharraf passed his National Reconciliation Ordinance seen by many as a whitewash of the corruption of former opposition leaders and their henchmen.

Thus the pronouncements by the World Bank are not surprising. What is surprising, however, is the fact that the World Bank has been engaged in several interventions in Pakistan over the past decade, interventions geared towards governance reforms; and the Bank's own report now acknowledges the failure of these interventions albeit indirectly.

Given the claim of the World Bank that it is "uniquely positioned to share international best practice and provide world class analytical and research services to our clients," there is a need for the management of the World Bank to revisit some of the government claims and re-evaluate the success and failure of its governance programmes in general and in Pakistan in particular in an effort to ensure that targeted interventions are more successful than they obviously are.

However the ultimate responsibility for poor governance and corruption rests with the government. While it is certainly accurate to maintain, as has been done repeatedly by the PPP Co-Chairman, Asif Ali Zardari, that the government has been in place for a little more than sixty days and the inherited economic and political problems are so acute that more time is required to deal with them adequately; however some effort needs to be made to dispel the impression that the government has still not paid attention to a major shortcoming of the previous government.

The Prime Minister announced that the National Accountability Bureau would be abolished, the same court that had sent him to prison on February 11, 2001 on charges of misuse of his authority while he was a Speaker of the National Assembly. However Law Minister Farook Naek clarified later that this would not be possible without the support of President Musharraf.

This is being seen by the public at large as a status quo on issues related to poor governance and corruption which directly impact on the well being of the general public - a fact which may account for the focus of the entire nation on the issue of the judges' restoration - reflected by the rising personal popularity of Nawaz Sharif who has linked the issue with his party members' return to the Cabinet. The government would be well advised to take cognisance of this and take appropriate measures.

The World Bank report also highlighted a few other factors that are barriers to exports in this country in comparison to other South Asian countries: transport, information technology, poor infrastructure and efficiency of customs as well as weak border procedures. These constraints are hardly likely to be dealt with in the short term; however, it is hoped that the government would keep them in mind when formulating a trade policy.

Business Recorder [Pakistan's First Financial Daily]

 

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Dubai-based group to set up cement manufacturing plant
* Project construction scheduled to begin in July, expected to the completed by 2009
By Moonis Ahmed

KARACHI: A Dubai-based business group will set up a cement manufacturing plant named Galadari Cement (Gulf) Limited, near Karachi, its CEO Badaruddin Fakhari told Daily Times on Wednesday.

He said that the project was planned seven to eight years ago but work on it was halted due to some reasons. Now the project has been started again and the construction of plant would start by next month and would complete by the end of November 2009, he added.

The CEO said that the business group would initially invest Rs 3 billion and is likely to invest another Rs 17 million after its completion. He said that company would also sell shares in the market in early 2009.

Badaruddin Fakhri further said that besides providing employment the cement plant would also increase government revenue by up to Rs 1 billion. He said that French machinery would be installed for cement production, which would produce 3300 metric tonnes on daily basis. The company would also export cement, he added.

Bilal Hameed, an analyst of cement sector, said that the overall production of the company would be 990,000 tonnes annually that would increase the cement supply locally as well as at international level. The high prices in the local market are also expected to come down after this plant is set up, he added.

Muhammad Shahid Farooqui of Karachi Cement Dealers Association said that as cement production is already low in Pakistan, the new company’s 3300 tonnes production on daily basis would not be able to help meet the country’s requirement. If the company initially does not export the cement, it might boost supply in the country.

Although Pakistan produces around 90,000 tonnes cement per day, but because local manufacturers export cement in large volumes and do not sell their product in local market, a shortage of cement in the local market persists, he said.

“The government does not have any control on local manufacturers, as they have created a fake cement shortage in the local market, otherwise we have a surplus of cement production,” he added.

Daily Times - Leading News Resource of Pakistan