Pakistan Economy - News & Updates - Archive

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PC board approves privatisation programme 2008-09 ​

Workers of state-owned entities to get 10pc share: minister​

Friday, June 27, 2008

ISLAMABAD: In order to make the Privatisation Policy pro-workers, the workers of public sector entities will be given 10 per cent shares of their respective entities.

Syed Naveed Qamar Federal Minister for Privatisation, Investment, Finance, Revenues & Economic Affairs announced while chairing a meeting of the Board of Privatisation Commission on Thursday.

Syed Naveed Qamar who is also chairman of the Privatisation Commission (PC) directed the PC that this decision should be implemented as soon as possible. He also formed a Committee to workout the modalities for the transfer of shares to the workers of State Owned Entities (SOEs).

The Minister further stated that the government was in the process to make the privatisation process as pro-worker and pro-people as possible and to transfer the benefits of privatisation to them in a transparent manner.

The employees and the respective stakeholders of the SOEs would be taken on board before initiating the process of privatisation of units already approved by the Council of Common Interests (CCI), he added.

The PC Board was briefed regarding the present status of various ongoing transactions and was informed that a Financial Advisor has been appointed for the divestment of Kot Addu Power Company (KAPCO) shares in the international market through Global Depository Receipts (GDR).

The Board was further informed that a pre-qualification committee was finalizing its recommendations, for the pre-qualification of parties interested in acquiring SME Bank, which would be discussed in the next board meeting. The bid documents for the acquisition of Pakistan Tourism Development Corporation (PTDC)’s 26 Motels / Restaurants through a competitive bidding process are being given final shape. The PC received Expressions of Interest (EOIs) from 36 investor(s), Consortium of Investors for PTDC’s Motels / Restaurants, which have been offered to promote tourism, improve the quality of services and foster competition.

The PC board was informed that pre-qualification of the parties interested in acquiring National Power Construction Company (NPCC) was at an advanced stage and the due diligence of Heavy Electrical Complex (HEC) by the prospective bidders was in progress.

The PC Board approved the Privatisation Program 2008-09, which includes Hazara Phosphate & Fertilizers Ltd, Heavy Electrical Complex (90 per cent shares), Jamshoro Power Company (51 per cent), Faisalabad Electric Supply Co. Ltd. (56 per cent shares), Printing Corporation of Pakistan (Assets), Pakistan Machine Tool Factory (90 per cent shares), Morafco Industries Limited (Assets), Sind Engineering Limited (assets), Lakhra Coal Mines Project, Khewra Salt Mines, Pakistan Steel Mills (10 per cent shares) through IPO, and the Services International Hotel.

The Privatisation Program already approved by the Council of Common Interests (CCI) will also be reviewed in due course of time in order to prepare a final list for future privatisation.

The PC Board also formulated its recommendations for the Cabinet Committee on Privatisation (CCOP) in order to reprioritise the Privatisation Program.

The PC Board members’ senior representatives of the respective ministries/ departments and PC officials attended the meeting.

PC board approves privatisation programme 2008-09

 

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NBP expands its network in Afghanistan ​

Friday, June 27, 2008

PESHAWAR: National Bank of Pakistan (NBP) has expanded its network by opening the third branch in Afghanistan in Herat Province. The branch was inaugurated by Governor Herat, Syed Hussain Anwari, while Senior President and Coordinator NBP Afghan Operation, Mohammad Hanif Khan was also present on the occasion.

Speaking on the occasion, Governor Herat Syed Hussain Anwari welcomed the opening of NBP in Herat and viewed that it would not only contribute to the reconstruction efforts of the Afghan economy, but would also greatly help in the strengthening of brotherly ties between the two neighboring countries.

The Governor especially thanked the NBP Management for starting its operations in the province.

He hoped that it would prove to be a corner stone in the relations of the two countries, which have strong bonds of religion, culture and brotherhood.

President and Coordinator NBP Afghan Operation Mohammad Hanif Khan on the occasion said that the NBP is the first ever foreign commercial bank that launched its operations in Afghanistan by opening its first branch at Kabul in October 2003, followed by its second branch at Jalalabad in May 2004.

He said that the opening of NBP branch in Herat province would facilitate and support the rebuilding of Afghan economy besides generating enhanced economic activities for the uplift of Afghan masses and the strengthening of Afghan banking sector.

NBP expands its network in Afghanistan

 

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Pakistan seeks $125m Saudi credit for fertiliser ​

Friday, June 27, 2008

ISLAMABAD: Pakistan government is negotiating with Saudi authorities for reviving another credit facility of $125 million for fertiliser import, The News has learnt.

A team of the Economic Affairs Division (EAD) is working out a strategy for the revival of Saudi credit facility for the import of nitrogenous fertiliser (urea), official sources of the EAD told this correspondent.

Pakistan nearly availed the existing Saudi credit facility of $133 million, which the kingdom pledged after the devastating earthquake in 2005 and Pakistan imported urea fertiliser as the country faced urea deficit in the last couple of years.

Prime Minister Syed Yousuf Raza Gilani in a meeting with the King of Saudi Arabia in the first week of June discussed economic cooperation between the two brotherly countries.

The Economic Affairs Division is devising modalities for operationalising the facility for at least two years because two urea fertiliser plants, one each of Fatima Group and Engro Chemicals, would be commissioned in 2010 and the country would be self-sufficient in the commodity, an official well aware of the development said.

The government is also importing 350,000 tonnes of urea for the ongoing Kharif season to meet the shortfall and the TCP has placed tenders for the import of the commodity.

Out of the total consumption basket of 7 million tonnes of fertilisers, 5.4 million tonnes are urea fertilisers while the remaining 1.6 million tonnes are phosphorous and potassic fertilisers.

For urea fertilisers, the country bristles with local production of 4.8 million tonnes and 0.6 million tonnes shortage is met through imports.

Pakistan seeks $125m Saudi credit for fertiliser

 

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Forex reserves rise by $300m ​

Friday, June 27, 2008

ISLAMABAD: Foreign currency reserves of the country have started showing an improvement as they surge by nearly $300 million to $11.285 billion in a week.

The rise in reserves came after around $300 million in inflows, mainly from the US, Barclays Bank and others. Total liquid foreign reserves held by the country stood at $11.285bn on June 21.

Foreign reserves held by the State Bank of Pakistan (SBP) stand at $8,655.6 million while net reserves held by banks were $2,630.3 million.

“Pakistan has received inflows from the US which helped to improve its’ reserves position. Besides, the Barclays bank installment received by the country, stood at $100 million,” said an official source while talking to The News here on Thursday.

Pakistan’s reserves stood at $10.909 billion on June 14, which increased up to $11.285 billion on June 21. The country’s reserves have been depleting rapidly because of growing imports, especially that of oil, whose prices have doubled in a year, causing vulnerabilities on the external front.

Official sources said the rapid fall in reserves was quite disturbing for the economic managers as on one hand the external debt surged and touched $46 billion, while on the other hand the precious reserves declined from $16 billion to just over $10 billion in recent weeks. Pakistan’s foreign debt swelled by around $10.5 billion in the last six years up to $45.9 billion, at a time when reserves also fell with more speed.

According to SBP, the foreign currency reserves stood at $14.08 billion on Feb 15, 2008. The reserves position was much better a few months back as it stood at around $16.4 billion during October 2007. It showed that the reserves declined by around $6 billion in the last few months.

The sources also raised questions over the alleged ‘flawed policy’ being continued by the central bank for managing the precious reserves.

Pakistan’s current account deficit widened in the outgoing fiscal year, resulting in growing pressure on foreign currency reserves.

The official circles believe that there is an expectation of some inflows pouring into Pakistan before June 30, 2008 which will help improve the reserves position during the outgoing fiscal year.

Forex reserves rise by $300m

 

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Italian auto giant to manufacture bikes in Pakistan ​

Friday, June 27, 2008

LAHORE: A leading European company has signed a deal with a local entrepreneur to produce 125cc Euro-II motorcycles in the country, challenging the monopoly of Japanese and Chinese bike manufacturers.

“Italian auto giant Piaggio has decided to introduce European automobile technology in Pakistan,” said the company’s Senior Vice President Ricardo Mastronardi after signing of a memorandum of understanding between Piaggio and HKF Engineering at the Lahore Chamber of Commerce & Industry.

Ricardo said “Piaggio is one of the leading motorcycle manufacturers in the world and the first two-wheeler scooter in the world Vespa is its masterpiece.”

He said Piaggio’s comeback to Pakistan and joining hands with a leading local motorcycle manufacturing company HKF Engineering showed the Europeans had faith in Pakistan’s economy.

The phenomenal growth of motorcycle production in Pakistan had impressed European automobile circles, he said, adding “they now realise that growth potential of this country is much higher.”

He hoped bike-lovers in Pakistan would appreciate the difference between the technology being introduced by Piaggio and the existing one.

Speaking on the occasion, LCCI President Mohammad Ali Mian said the auto industry was one of the important sectors as it was not only providing direct jobs to more than 500,000 people but also contributing to the national exchequer in a big way. He said Pakistani entrepreneurs would learn a lot from latest European technology in the wake of the MoU between the two big organisations.

Under the agreement, HKF Engineering will launch its first joint product Ravi Piaggio 125cc motorcycle, the first Euro-II motorcycle in Pakistan, followed by many future products. HKF Engineering Chief Executive Officer Haroon Arshad said the motorcycle industry had been registering a 25 per cent growth for the last five years. He said the first European technology-based motorcycle would be launched on August 14 this year.

Italian auto giant to manufacture bikes in Pakistan

 

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Pak IT industry making progress at 50pc annually ​

Friday, June 27, 2008

KARACHI: Pakistan’s information technology industry is progressing rapidly at more than 50 per cent annually for the last four years, with many companies winning huge contracts from domestic as well as international market, an official of the Pakistan Software Export Board (PSEB) said in a statement issued on Thursday.

Quoting the figures released by the State Bank of Pakistan (SBP) last year, a quantum annual increase of 61.18 per cent to $116 million has been registered in IT exports against the previous year’s US$72 million.

Many companies have been successful in obtaining huge domestic as well as international business contracts and venture capital funds from foreign investors. The official disclosed that Vopium, a Pakistani IT company, has recently gained a venture capital fund worth US$6.75 million from Enex Group SA, Luxembourg. The company’s software allows savings of 40-90 per cent when making international calls or sending SMS from mobile phones.

Another recent example of two leading US-based Venture Capital (VC) firms, ePlanet Ventures and Draper Fisher Jurvetson (DFJ), providing funds to Naseeb Networks, speaks volumes of the trust placed in the potential of Pakistan’s IT industry by foreign investors, he added.

The PSEB official further said that there is a lot of potential in Pakistan’s IT industry. NetSol, a local leading IT company listed at NASDAQ, has recently been dual-listed for trading on the Dubai International Financial Exchange (DIFX). The presence of Pakistani IT companies on international stock exchanges is a positive sign for the foreign investments in the Pakistani IT industry.

Regarding domestic requirements, the official said that Pakistani IT companies are also fulfilling the needs of local industry and many leading telecom companies are utilising the services of Pakistani IT companies to automate and enhance their operations. Mobilink, for example, has recently signed LMKR, a leading IT company of Pakistan and a global provider of Geo technology and information technology services, to automate its Warehouse processes. Similarly, Ufone signed Teradata to expand its Data Warehouse with state-of-the-art 5550H nodes and to enhance its customer support services.

Pak IT industry making progress at 50pc annually

 

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Pakistan seeks Australian cooperation in social sectors ​

Friday, June 27, 2008

ISLAMABAD: Pakistan and Australia have agreed to work out details for increasing cooperation, to improve the social sector like health and education as well as communications, utilisation of arid land, water scarcity and agri development.

This was discussed during a meeting between Australian High Commissioner Zorica McCarthy and Finance Minister Syed Naveed Qamar here on Thursday.

Australia and Pakistan share global perceptions on a variety of political and economic issues and would like to continue to strengthen their relationship for the benefit of people of both countries in times to come, it was agreed.

Zorica McCarthy presented her overview of the global economic scenario and briefed the Finance Minister on Australia’s economic issues with regard to inflation, banking industry’s interest rate, exports and other development subjects.

The finance minister stressed on enhanced cooperation between the two countries in the field of agriculture, land utilisation and learning from each other’s expertise and new techniques in agro-based development projects.

Australian High Commissioner identified development projects in less developed areas of Pakistan, wherein Australia could offer support to Pakistan.

It was agreed that experts from both sides could work out details of any possible cooperation between the two friendly countries, focusing on health, education, communication, utilisation of arid land, water scarcity and agri development.

In the end, the finance minister briefed the Australian High Commissioner on development features of Benazir Income Support Programme designed to help uplift the poor sections of the society against price hike. Pakistan would identify investment specific opportunity zones to encourage foreign investment in the country in order to maximise economic development, finance minister concluded.

Pakistan seeks Australian cooperation in social sectors

 

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Maybank acquires 15pc MCB Bank shares: $667m remitted​

KARACHI, June 26: Maybank of Malaysia has finally acquired 15 per cent MCB Bank shares and remitted a total of $667 million to Pakistan.

The confirmation of acquisition of 15 per cent MCB shares was sent to Karachi Stock Exchange. The deal was finalised on May 5.

According to State Bank of Pakistan, the deal amount worth $667 million was remitted to Pakistan on June 23.

As per agreement, the Maybank would also purchase another five per cent shares of MCB Bank after a year. In terms of deal price, it was the largest deal any bank in Pakistan has ever made to sell its 15 per cent shares.

Maybank bought the MCB stake at 5.1 times book value and 15 times Karachi-based bank’s earnings in 2008. The booming banking industry attracted a number of large foreign banks to enter Pakistan which resulted into sale of several small and medium-sized Pakistani banks.

However, the deal was different as it was the first Malaysian investment in the financial sector of Pakistan.

The transaction of $667 million represents the largest Foreign Direct Investment into Pakistan in 2008 and the largest-ever private sector cross-border transaction in the country.

With the transaction of MCB sale money, the country’s reserves improved significantly after facing a continuous decline for the last 10 months.

The said amount was not remitted to State Bank, but kept with banks which improved reserves to $2.63 billion while the country’s total reserves reached $11.286 billion on Thursday.

The government has also planned to sell shares of public sector companies in the international market for attracting foreign investment.

Plan for launching Global Depository Receipts (GDRs) is also in the pipeline but the instable political and economic image of the country is the real hurdle.

After acquiring 15 per cent shares, the Maybank would have the right to appoint two directors to represent its interests on the Board of MCB and would participate in some of the key management committees.

According to the details, Maybank has signed SPAs (Share Purchase Agreements) with five separate parties, namely 1) Mian Umer Mansha, Mian Hassan Mansha, Mohammad Saleem (collectively referred as individual sellers); 2) MCB Bank Employee’s Provident Fund; 3) MCB Bank Provident Fund; 4) Nishat Mills Limited (NML) Employee Provident Fund Trust; and 5) Adamjee Insurance (AICL) for acquisition of 94.2m shares (15 per cent of issued share capital) of MCB bank at per share price of Rs470. This is 5.3 times its Dec 31, 2007, book value of Rs88 per share.

After completion of the SPAs, the Maybank and the MCB would also enter into a business cooperation agreement, which includes Islamic banking, retail banking, credit cards and small and medium enterprise banking as key partnership areas.

Maybank is the largest bank of Malaysia and is expanding its foreign operations to exploit the opportunities the way other giant banks, like Standard Chartered, ABN Amro, NIB Bank others are doing.

Maybank acquires 15pc MCB Bank shares: $667m remitted -DAWN - Business; June 27, 2008

 

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Pakistan seeks market access to G-12 states: Industrial goods​

ISLAMABAD, June 26: Pakistan has joined the G-12, comprising the US, EU, Japan, China, Australia, Canada, Brazil, India, Mexico, and South Africa, in a bid to seek maximum market access for industrial goods, particularly textile and clothing, under the current Doha Development Round.

Pakistan’s inclusion in the group is very significant,” said a senior official in the Commerce Ministry on Thursday, adding after making a progress in the negotiations on non-agriculture market access by the group, World Trade Organisation director-general has announced the holding of seventh ministerial meeting on July 21 in Geneva.

The official said while substantial progress has been made on several issues, many issues are yet to be settled.

“Without having a clear understanding on those issues, it is not clear if the ministerial meeting is going to succeed,” he added.

A final deadline of end July 2008 has been established for completion of modalities -- the way tariff cuts and other decisions are to be applied -- on agriculture and industrial goods, the official added.

According to the official, Pakistan’s key interest in the Doha Round is to get tariffs on its exports to the US and EU reduced substantially.

If talks are successful, tariff rates which could be as high as 32 per cent on many clothing items in the US market could come down to less than five per cent, he said and adding, it would also reduce disadvantages to Pakistan as compared to its competitors, many of whom enjoy duty-free access to the US market.

Analysts said despite being a partner on war on terror and also having been a close ally of the US, Pakistan was never allowed any trade concessions in the US market.

The EU had allowed duty-free access in the wake of Afghan war but those concessions were withdrawn at the end of 2004. This created serious difficulties for Pakistani exporters and its textiles and clothing industry.

Compared to Pakistan, many other countries which never supported any US or EU policies are enjoying duty-free access, they said. The official said to overcome these difficulties, exporters were allowed six per cent Research and Development subsidy. However, as in the past, such subsidy resulted in further lowering of prices of Pakistan’s products and the government had to pay over Rs30 billion.

He said much of these government funds were passed on by exporters to EU governments as anti-dumping duty on Pakistan’s exports. The All Pakistan Textile Mills Association (Aptma) has been seeking a fresh package of over Rs50 billion.

Considering that they get loans on preferential rates, their subsidies are much higher than any other industry.

Currently the US and EU collect maximum duties on Pakistani exports. On average, they are more than 10 per cent whereas their (EU and US) average tariff rates are less than three per cent.

The official said while the new political government finds itself in difficulty because it has no fiscal space to pay subsidies, at the same time subsidies for one sector discourage development and export of other products. As a result, he said almost two-thirds of Pakistan’s exports consist of low quality textiles and clothing.

Since Pakistan has failed to diversify, it has to face worsening trade deficit. Recent budgetary measures to curb imports are likely to further adversely affect Pakistan’s exports, he added.

Analysts said if the Doha Round is successful, it is time for Pakistan to rethink its trade policy. It needs to move on to encourage export of other dynamic products and make use of opening of new markets.

Pakistan seeks market access to G-12 states: Industrial goods -DAWN - Business; June 27, 2008

 

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Services trade deficit crosses $6 billion ​

KARACHI (June 27 2008): Pakistan's services trade deficit has crossed 6 billion dollars mark for the first time in the history of the country, up by 43 percent during the current fiscal year as compared to same period of last fiscal year mainly due to rising imports and decline in the export of services.

Despite the government efforts, services exports are rapidly declining, while the imports are increasing constantly during the current fiscal year and it is expected that services deficit would reach nearly seven billion dollars in FY08.

The State Bank of Pakistan statistics show that overall service sector exports stood at 2.926 billion dollars against imports of some 9.025 billion dollars during July-May of FY08, depicting a deficit of 6.098 billion dollars during the first 11 months.

The deficit also shows an increase of 1.84 billion dollars against the same period of FY07, as during July-May of FY07 overall services deficit stood at 4.25 billion dollars. Heavy payments on account of transportation (followed by raise in the tariff of shipping lines), travel services, insurance, technical fees and royalties are major contributors in the services trade deficit, economists said.

They said that rising imports and declining exports have also played a major role in widening the services sector deficit, as during the first 11 months of current fiscal year overall exports of services sector declined by 12 percent, while imports increased by 19 percent.

Pakistan has only one flag carrier ie Pakistan National Shipping Corporation (PNSC), therefor exporters and importers are compelled to hire and pay to the international shipping lines, economists said. Overall services sector exports stood at 2.926 billion dollars during July-May of FY08 as compared to 3.33 billion dollars during corresponding period of FY07.

The imports of services sector rose by 1.44 billion dollars to 9.02 billion dollars during the period against 7.58 billion dollars during the first 11 months of 2007.

The country earned some 960 million dollars on account of transportation against payments of 3.32 billion dollars; 245 million dollars earned from travel sector as against the payments of 1.45 billion dollars. Communication sector exports stood at 106 million dollars against imports of 98 million dollars.

Construction sector earned 33.8 million dollars, insurance sector 41.5 million dollars and 39.6 million dollars from financial sector during July-May of FY08 against payments of 47 million dollars, 135 million dollars and 172.2 million dollars, respectively. On month-on-month basis during May 2008 services sector deficit stood at 383 million dollars with 274 million dollars exports and 656 million dollars imports.

Business Recorder [Pakistan's First Financial Daily]

 

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World Bank promises to help develop FTIP project ​

ISLAMABAD (June 27 2008): A six-member World Bank Institute-Poverty Reduction mission visited Foreign Trade Institute of Pakistan (FTIP), here from June 18 to 26 in the context of the World Bank-financed Pakistan public sector capacity building project.

According to a statement of FTIP, the objective of the mission was to help the Institute, assess its capacity building needs and prepare a medium-term capacity building strategy and implementation plan, including training, research capacity building, and outreach/policy dissemination/knowledge management, in line with the World Bank-financed Pakistan Public Sector Capacity Building Project and the government of Pakistan's trade policies.

The mission had several meetings with the FTIP, which is the intended technical agency of the Ministry of Commerce for capacity building, policy research, and training needs in trade-related issues. The mission appreciated the fact that the FTIP was being restricted to revamp the institution's training programme, build its research capacity and expand its outreach/policy dissemination/knowledge management strategy.

FTIP Director General Dr Safdar A.Sohail presented the mission with a comprehensive analysis of existing constraints and proposed plan to revamp its training and research capabilities.

The mission also met various stakeholders from the Ministry of Commerce to representatives of the Rawalpindi Chambers of Commerce and Industry (RCCI), the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), and the Trade Development Authority of Pakistan (TDAP). They confirmed the existence of real demand of services (training, research, and outreach) that could be met by a revamped and revitalised FTIP.

Based on the discussion, it was agreed that urgent training, research, and outreach activities would be implemented through short-term plan of action whereas a medium-term programme of actions (Phase II) would be implemented in the medium-term (about three years) within or out of the PSCB.

It is hoped that collaboration between WBI and FTIP will enhance the development and delivery of collaborative trade, research and training programme at the national as well as regional level. The World Bank mission comprised Salomon Samen (mission leader), Ravi Yatawara (WBIPR), Shabana Khawar, Anjum Ahmad, Shamsuddin Ahmed and Imtiaz Ahmad Sheikh (SASFP, Islamabad).

Business Recorder [Pakistan's First Financial Daily]

 

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World Bank lends $38m for water resources ​

Saturday, June 28, 2008

ISLAMABAD: The World Bank has approved technical assistance worth $38 million for Pakistan in order to support the management and development of water resources in the Indus River Basin.

“It will be the last approval of credit line for outgoing fiscal year 2007-08, ending on June 30,” a source told The News here on Friday.

Owing to slow implementation of the reform process, WB lending slowed down compared to earlier commitments. Annual assistance of the WB remained over $1 billion in recent years, but it could only approve $500 to $600 million in the outgoing financial year.

The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, carries a 0.75 per cent service fee, a 10-year grace period and a maturity of 35 years.

The Indus Basin Irrigation System is the largest contiguous irrigation system in the world and Pakistan relies on it to provide both basic food security and supply water for all sectors of the economy. However, this massive infrastructure network is deteriorating and needs to be rehabilitated. Equally important will be the reforms to improve the allocation of water and its efficient use.

The objective of the Water Sector Capacity Building and Advisory Services Project for Pakistan is to improve the management and investment planning of water resources in the Indus River Basin.

There are three components to the project. The first component is capacity building of and support to federal institutions in water resources planning and management. The component includes, among other things, support for building human resources and institutional capacity in the federal institutions and support for developing studies, strategies and plans for improving water resources planning and management.

The second component of the project is improvement in water resources management and development.

This component will include inter-alia: (i) upgrading of existing tools, databases, models and management systems; (ii) sediment management studies for the Indus system and the possibility of flushing sediments through the Tarbela reservoir and its impact basin wide; (iii) preparation of a power investment plan with focus on hydropower development in the upper Indus and conjunctive operation of dams and infrastructure; and (iv) feasibility studies and preparation of designs for quickly/easily implementable hydropower plants suitable for financing by international financial institutions.

The third and the final component is project management coordination, additional studies, training. This component will support the government, in particular the ministry of water and power (MoWP) with project management, including coordination of all project related activities and monitoring and evaluation of project impacts and technical and financial audits. This will also support institutional strengthening and training of the staff involved in water resources management.

“Water sector issues are enormous and complex and addressing them will require a series of investments and long-term commitment”, said Yusupha Crookes, World Bank Country Director for Pakistan.

“We hope this project will build the foundation for the renewal and sustainability of the water sector, which in turn will lead to better water services and improved irrigation and hydropower development.”

The project aims to strengthen the Indus system’s institutional and regulatory framework, bolster the technical capacity of the MoWP, the Indus River System Authority (IRSA), the Water and Power Development Authority (WAPDA) and the Planning Commission and to support the development of public-private partnerships in order to mobilise hydropower investments.

“The development and management of the Indus Basin is a huge challenge, requiring very high levels of administrative, engineering and scientific capability,” said Masood Ahmad, World Bank Lead Water Resources Specialist and project team leader.

“This project will support water management and distribution, benefit sharing mechanisms, and financing strategies to help mobilise crucially needed investments in the water and hydropower sectors.”

The Bank has a long history of partnership and collaboration with Pakistan in the water sector. It has supported more than 48 operations in irrigation, drainage, water resources development, and the power sector.

World Bank lends $38m for water resources

 

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US Congress approves new $150 million assistance ​

WASHINGTON (June 28 2008): The US Congress on Friday endorsed new American $150 million assistance for Pakistan's socio-economic development as Senate also adopted the supplemental budget measure following its approval in the House of Representative.

The new assistance is over and above the continuing aid programs for the South Asian country and would be projected toward socio-economic development in the next financial year beginning October 1, 2008.

Top Democratic Senator Joseph Biden called the tranche of assistance as down-payment of $1 billion democracy dividend, pledged to help the new democratic government focus on well being of the Pakistani people. The US administration has already requested a total of $901 million for Pakistan in the year 2009.

Business Recorder [Pakistan's First Financial Daily]

 

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Inflation up by 26.79 percent ​

ISLAMABAD (June 28 2008): The inflation measured through SPI was up by 26.79 percent in week ending on June 26 against same period of last year due to surging prices of vegetable, flour and milk. The SPI data released by the Federal Bureau of Statistics on Friday showed that prices of 16 essential commodities, including vegetables, wheat flour, eggs, milk, and pulses had increased during the week.

The price of one kg tomatoes increased from Rs 13.86 to Rs 15.84, potatoes Rs 19.42 to Rs 20.37, dozen eggs hen Rs 48.75 to Rs 50.67, LPG 11 kg cylinder Rs 687 to Rs 708.82, litre of kerosene increased from Rs 55.02 to Rs 55.57. Similarly, the prices per kg gram pulse washed increased from Rs 58.72 to Rs 59.15, wheat flour average quality Rs 22.52 to Rs 22.67, gur Rs 31.7 to Rs 31.93, firewood 40 kg Rs 238 to Rs 239.17 and kg masoor pulse washed Rs 111.88 to Rs 112.10. The prices of fresh milk and garlic also increased during the week.

With the increase in prices of essential commodities, the dearness for the low income group of Rs 3000 was recorded 29.74 percent more compared to last year. The increase was recorded 28.91 percent for families falling between Rs 3001 and Rs 5000 income group, 26.72 percent for families of Rs 5001 to Rs 12000, and 23.36 percent for families having monthly income of Rs 12000 and above. This led to an increase of 0.13 percent inflation during the week.

The trend of weekly SPI during last 10 weeks as compared to the previous as well as corresponding week of last year showed a continuing increase, escalating the difference from 23.71 percent on April 24 to 26.03 percent on June 26. The SPI bulletin, based on data of 53 items collected from 17 urban centres, showed increase in prices of 21 essential commodities, decline in 10, and prices of 20 commodities remained stable but dearer compared to last year.

Further analysis of the data showed that prices of 11 commodities declined during the week that included red chillies, onion, rice irri, chicken farm, rice basmati sugar, bananas, vegetable ghee loose and mustard oil. According to the FBS, the prices of 26 essential commodities remained stable during the week but prices of majority of them were up in double digits when compared to same period of last year.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan ready to boost trade ties with India: Faruqui ​

Saturday, June 28, 2008

NEW DELHI: Planning Commission Deputy Chairman Salman Faruqui, has said Pakistan is prepared to enhance economic relations with India on a reciprocal basis.

Addressing an “Interactive Business Meeting”, hosted by Federation of Indian Chambers of Commerce and Industry (FICCI) here, in honour of the Pakistani delegation led by him, he said over the last few years, trade between Pakistan and India has experienced a significant growth.

From 2001 to 2007, trade has grown from $236 million to $1.6 billion and it is projected to touch $2 billion in 2007-08.

Commerce Secretary Syed Asif Shah, Secretary Water and Power Ismail Qureshi, Pakistan High Commissioner Shahid Malik, Member National Assembly Azeem Daultana, Nazim City Government of Karachi Syed Mustafa Kamal, Planning Commission Chief Economist Dr Rashid Amjad, Alternate Energy Development Board Chief Executive Arif Alauddin attended the meeting.

The Deputy Chairman underlined that while bilateral trade has increased the trade imbalance is conspicuously in favour of India. Redressing this imbalance by increasing exports to India is a major part of our export drive. For making the economic relations mutually beneficial, he said that both the countries need to work out modalities to ensure that trade is carried out on a “level playing field”, especially by addressing para-tariff and non-tariff barriers being faced by Pakistani exports to India.

Referring to the area of investment, he said Pakistan is prepared to look at such requests, on a case-to-case basis, keeping in view our national interest and of course subject to India reciprocating in the same manner.

Noting that Pakistan has taken positive steps to increase interaction between business communities of both countries, the Deputy Chairman stated that Pakistan is already following a liberal visa policy for Indian businessmen and both the countries are presently discussing a more liberalised visa policy which will help businessmen on both sides.

Stressing the need to open bank branches by each country on a fast track, Faruqui said a Pakistani bank has already applied to open a branch in India and is awaiting approval.

He said that Pakistan would facilitate such an application from the Indian side when it is received. Syed Asif Shah, Secretary Commerce, stated that during the last four years, concrete steps have been put in place for increasing trade, including cross border movement of trucks at Wagah-Attari and signing of the Shipping and Protocol Agreement.

Pakistan has already upgraded trade facilities on Wagah-Attari border while India is also in the process of upgrading trade handling facilities on their side. Secretary, Commerce indicated that Pakistan plans to organize a single country exhibition at New Delhi in February 2009.

Pakistan will also welcome participation of Indian businessmen in Expo 2008, being held at Karachi, in October 2008.Ismail Qureshi, Secretary, Water and Power said that Pakistan and India are deficient in energy; Pakistan would be ready to consider cooperation in the field on a reciprocal basis.

Responding to an observation regarding the visa regime, Shahid Malik, High Commissioner of Pakistan, stated that the High Commission was already following a liberal visa policy for Indian businessmen and honours the recommendations made in this behalf by the recognized trade bodies of both the countries.

He further said that visas were being issued within 48-hours on receipt of applications. Earlier welcoming the Pakistani delegation Mr. K K Modi, past President of FICCI, stated that both India and Pakistan had experienced significant economic development in the recent past and there was enormous potential to enhance economic relations between the two countries to the mutual advantage of both.

Pakistan ready to boost trade ties with India: Faruqui