Pakistan Economy - News & Updates - Archive

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'Skilled manpower to get employment in South Korea'​

ISLAMABAD (July 12 2008): Minister for Labour, Manpower and Overseas Pakistani Syed Khurshid Ahmed Shah on Friday said the government is making efforts to send skilled manpower abroad for employment. Talking to Korean Ambassador Shin Un, who called on him here, the minister said over 3,500 workers have passed Korean Language Test to get employment in Korea, adding, the process to send them abroad is underway.

Secretary Ministry of Labour and Manpower Malik Asif Hayat and other officials of the Ministry were also present on the occasion. Khurshid Shah said the government is committed to alleviate poverty from the country and has planned to provide employment to maximum skilled and unskilled youth to Korea and other countries.

The Minister urged to enhance co-operation between both the countries in different fields like agriculture, fisheries and technical fields. The Korean Ambassador said that Pakistani labour force is very hard working and working honestly in Korea.

Korean government is providing equal benefits to the local and Pakistani labour, the ambassador added. He said that the stay of Pakistani workers has been enhanced from three year to five years and their economic conditions will further improve.

Official said that Korea is keen to import Pakistanis skilled workers as they (workers) are up to Korean standards and Korean Labour Ministry does not face problems from Pakistani labour as compared to labour from other countries like India and Sri Lanka.

Under a Memorandum of Understanding (MoU) inked between the governments of Pakistan and Republic of Korea, he said only Overseas Employment Corporation (OEC), a public sector organisation, had been authorised to recruit, train and send Pakistani workers to Korea on work visa.

In this regard, official said OEC has arranged a number of courses for Pakistani workers about Korean language and culture, adding the tests were conducted under the supervision of the Human Recourse Department, Ministry of Labour Korea, he added. He said OEC has received a number of complaints that some private test centres and agents are charging huge amounts for conducting Korean language training test on pretext of sending them to Korea for employment.

Official advised the people to avoid unauthorised technical trade test centres and private agents who are misleading the people for employment in Korea. Over 7.5 million overseas Pakistanis working in various countries including United States, Canada, Europe, Middle East and Far East.

Business Recorder [Pakistan's First Financial Daily]

 

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Industrialists urged to sell goods on minimum profit​

KARACHI (July 12 2008): Consumers Association of Pakistan (CAP) Chairman Kaukab Iqbal has said that consumers are suffering from ever increasing prices and to provide relief to them it has become mandatory that industrialist must sell their goods with bear minimum profit.

He was leading a delegation of CAP, which was called on Provincial Industries Minister Rauf Siddiqi, and discussed the rising cost of living and unabated price hike with him. During briefing the CAP Chairman said the Association was serving as a bridge between industries and consumers and making efforts to promote standard goods.

Drawing the attention of industrialist, the CAP Chairman emphasised they had to manufacture standard goods not only for local market but for export also, to meet World Trade Organisation (WTO) requirement.

He observed that many products being sold in market had no complete address on the packets, therefore consumers were facing hardship to make complaint if any, and requested that Department of Industries and Commerce should instruct them to display full address on the packets. He proposed to hold first Consumers Expo Discount Idea for Consumers during the Holy month of Ramazan with consumer goods sold at ex factory rate which, in turn, would help in arresting increasing prices.

Industries Minister expressed emphasis on protection of consumer's rights and assured of all possible assistance to CAP and to encourage holding the first Consumers Expo Discount Idea for Consumers during Ramazan and later at the towns level to provide consumers with some relief in terms of cost and quality.

He said steps must be taken to promote local industries to overcome the prevailing economic crises and make industries to sell quality goods and supply them on reasonable profit.

Business Recorder [Pakistan's First Financial Daily]

 

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Hydro-power generation: 317 sites identified to set up plants​

LAHORE (July 12 2008): The Punjab Irrigation and Power Department has identified 317 suitable sites for setting up hydro-power generation plants in the province, developing additional energy resources, fetching 600 megawatts of additional electricity.

Punjab Irrigation and Power Secretary Babar Hassan Bharwana revealed when he briefed Punjab Senior Minister Raja Riaz Ahamd, Punjab Revenue and Punjab Sports and Youth Affairs Ministers Haji Muhammad Ishaq and Dr Tanveer-ul-Islam on Friday.

He apprised the ministers about the energy vision, emerging irrigation problems and steps to improve the canal infrastructure in the province. "The places identified to set up hydro-power generation plants include 10 river-sites, which could produce 246 megawatts of electricity," the secretary said.

Under Punjab power policy vision, he informed them that private sector, along with the public sector or independently, could set up power generation projects. "Under the Article 157(2)(C) of the Constitution of the Islamic Republic of Pakistan, provinces have been allowed to develop power houses up to 50 megawatt," he added.

The Punjab government has developed its own power generation policy and private sector is being encouraged to invest in energy sector. The government has issued letters of interest (LoI) to 10 different parties. The LoI has also been invited for setting up 4.8 MW power plant at Sahiwal.

According to rules, 67 months had been given for setting up a new power plant, which could be reduced, he said. He the I&P project of setting up five hydel power plants was ready to takeoff, for which PPMU had been set up. About setting up small dams in the Potohar region, the secretary said 46 small dams had already been developed, while 13 others were being developed.

"According to a detailed inventory conducted in 2006, total asset value of I&P infrastructure was 20 billion dollars, while 2.4 billion dollars were required to fully repair and rehabilitate the irrigation infrastructure in Punjab. "I&P dept is following holistic reforms to achieve reforms targets," he added.

Business Recorder [Pakistan's First Financial Daily]

 

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Karachi atomic powerhouse starts supplying 80 megawatts electricity​

ISLAMABAD (July 12 2008): Karachi atomic powerhouse has commenced providing 80 MW electricity to Karachi Electric Supply Corporation (KESC) after two months' suspension. KESC spokesman told a private television channel that the transmission line of KESC got tripped two months ago that left metropolitan short of 80 MW electricity.

He said that having repaired transmission lines 90 MW electricity would soon be provided to the city, adding that spontaneous power outage would be relieved by the resumption of fresh 80 MW electricity.

Business Recorder [Pakistan's First Financial Daily]

 

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Textile tycoons say no to shutter-down strike ​

Sunday, July 13, 2008

KARACHI: Textile tycoons and representatives of various industry-related associations decided at the KCCI platform on Saturday that they would not go on shutter-down strike, but would engage public representatives to get the gas price hike and other issues resolved.

Zubair Motiwala and Iqbal Ebrahim made clear that the industry was not against the hike in gas price, but it was against the unprecedented and unbearable rise. “Industry is not in a condition to absorb 68 per cent increase in gas price for Captive Power Plants (CPP) and 31 per cent increase in general tariff for textile units,” they explained. There should be a formula to increase gas prices for the industry and demanded the government to remove cross-subsidy on gas, oil and electricity.

To make the government realise of anti-textile industry steps in the budget 2008-09 and then raising gas prices to unbearable height, they started off their journey from KCCI with protests.

Announcing their strategy on how to convince government on solving their problems, BusinessMen Group (BMG) Chairman Siraj Kasim Teli announced to launch media campaign.

“We are going to advertise our four major issues in print and electronic media. In this we would also demand the government to solve our issues within 48 hours”, Teli said. He also added, “We believe in convincing them to end discriminatory behaviour with the textile industry and remove cross-subsidy system on utility tariffs.”

The four main issues that would be advertised are included, (1) to reduce gas price to Jun 30 2008 level and to make a formula for determining current and future gas prices, (2) to make electricity tariffs rational, (3) to extend R&D support, and (4) withdraw withholding tax on small and medium textile units.

They would also demand the government to include industry representatives on export policy making board; in Oil and Gas Regulatory Authority (OGRA) and National Electric Power Regulatory Authority (NEPRA).

If the government does not accept the industry’s specific demands then they would stage protests, long marches, hold processions in National Assembly and every option available.

“Owing to massive rise in cost of doing business, the wet and process and other textile industry units have been completely closed down in Faisalabad.

These units in Lahore were also being closed down gradually, and if situation remained gloomy then we have to close textile units in Karachi as well”, they said.

The meeting concluded with forming a committee of five members headed by the KCCI president to hold talks with the government. The other four members are Zubair Motiwala, Nishar Shekhani, Billal Mulla and Muzammil Hussain.

These last four members of the main committee would further head the other four committees, respectively on gas, electricity, R&D and withholding tax as homework before meeting the high officials, meeting resolved.

The meeting resolved that the main committee would hold meetings with government officials on regular basis till they agree to resolve industry issues. “Government officials and we are already in constant contact for the resolution of underlined issues and believe that they would be resolved very soon”, said Ebrahim.

The meeting was chaired by Businessmen Group (BMG) Chairman Siraj Kasim Teli and attended by President KCCI Shamim Shamsi, KCCI Former Chairman Zubair Motiwala, APTMA Chairman Iqbal Ebrahim, Pakistan Apparel Forum Chairman Naqi Bari, PRGMEA Chairman Billal Mullah and SITE Association of Industry Chairman Nishar Shekhani.

Other participants include the representatives of Pakistan Woollen Mills Association, Shuttles Looms Industry Association, Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association, Pakistan Hosiery Manufacturers Associations and All Pakistan Processing Mills Association.

Textile tycoons say no to shutter-down strike

 

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Saudi confirms $125m credit facility for Pakistan ​

Sunday, July 13, 2008

ISLAMABAD: Saudi authorities on Saturday confirmed to Pakistan, that it can avail credit facility worth $125 million for the import of urea fertiliser to meet its shortage, a senior government official told The News.

“The Ministry of Food, Agriculture & Livestock (MINFAL) and Economic Affairs Division (EAD) have finally concluded negotiations for Saudi credit,” said Shahid Hussain Raja, Additional Secretary MINFAL on Saturday.

Pakistan had requested the Saudi government for reviving another credit facility of $125 million for the fertiliser, as it had nearly availed the existing Saudi credit facility of $133 million, which the kingdom pledged after the devastating earthquake of 2005 and Pakistan imported urea fertiliser as the country had been facing a severe shortage in the commodity since the last couple of years.

Pakistan is importing 300,000 tonnes of urea from Saudi Arabia under the credit facility offered by the kingdom and instead of distributing it to urea manufacturers, MINFAL would supply the commodity through National Fertiliser Corporation’s outlets, Raja said.

After the recent increase in gas prices, urea manufacturers have increased the prices of the commodity from Rs620 to Rs700 per 50kg bag. It is worth mentioning that the government did not increase gas tariff for feedstock, but they increased the prices. Last year, urea price stood at Rs540 per 50 kg.

Prime Minister Syed Yousuf Raza Gilani, in his meeting with the King of Saudi Arabia in the first week of June, discussed economic cooperation between the two countries and sought Saudi assistance.

Pakistan will only import urea fertiliser as the kingdom is self-sufficient in urea, whereas the country is deficient in the commodity and has to rely on imports, said Shahid Hussain Raja, additional secretary, MINFAL.

When asked about self sufficiency of urea domestically, Raja said that it could be achieved when Fatima Group and Engro urea plants commissioned in 2010 and till then, we would have to rely on imported urea, he added.

The government is also importing 350,000 tonnes of urea for this ongoing kharif season to meet the shortfall and 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 the phosphorous and potassic fertilisers. For the urea fertilisers, the country has local production of 4.8 million tonnes and 0.6 million tonnes of shortage, is met through imports.

Saudi confirms $125m credit facility for Pakistan

 

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Pakistan fails to keep pace with regional economies ​

Sunday, July 13, 2008

LAHORE: Pakistan seems to have taken a flawed approach to the economy, which is manifested by the fact that it has failed to keep pace with major economies of South Asia which have also faced the same challenges of rising prices of food and crude oil.

The magnitude of the stress on the economies of Bangladesh and India is far less than that on Pakistan. Both countries are experiencing high inflation (8 per cent in India and 11.5 per cent in Bangladesh), but these are lower than inflation rate of over 20 per cent being currently faced by Pakistan.

Bank mark-up has gone so high that it has brought industrial borrowing to a halt and all finance being sought is for running capital.

Textile industries in Bangladesh and India are showing a robust growth while apparel industries in Pakistan are closing down. Textile is the mainstay of Pakistani and Bangladeshi economies. In India, textile accounts for over 25 per cent of exports.

Economists point out that spending beyond means and bad governance contributed to the present stalemate in Pakistan’s economy while the Indians and Bangladeshis adjusted their policies according to ground realities to minimise the adverse impact of the rise in food and oil prices.

Bangladesh and India are not facing the similar pressures as being endured by Pakistan because their macro-economic indicators are strong. Currencies of Bangladesh and India are stable while that of Pakistan is unstable and declining. The Indians, in fact, made efforts to bring their currency down to the present level of around Rs43 to a dollar from Rs39 a few months ago. Bangladeshi currency remains stable at 68.50 a dollar and perhaps for the first time in the history Pakistani rupee is weaker even than Bangladeshi taka.

Pakistani planners proudly proclaim that remittances from overseas workers have exceeded $6 billion. However, India is the largest recipient of foreign remittances exceeding $30 billion a year. Its remittances were at almost the same level with Pakistan in the early 80s.

Remittances for Bangladesh were much lower than Pakistan by the start of this century. Now its workers abroad send more than $8 billion.

Trade deficit has widened in India, Pakistan and Bangladesh mainly due to high crude oil prices. However, the deficit is manageable in India and Bangladesh due to higher inflows of remittances, foreign direct investment and other sources.

Foreign exchange reserves of India and Bangladesh have been increasing steadily for the last seven years. However, Pakistan’s reserves have been on the decline for the last two years. Presently, its reserves of around $10 billion are enough to finance over two and a half months of imports.

Bangladesh’s foreign reserves of $6 billion are enough to finance four months of imports while India’s reserves of over $318 billion are sufficient to finance 15 months of imports. Only four years ago, Pakistan’s foreign reserves were sufficient to foot its one-year import bill.

Economists fear that time is not far when foreign banks would refuse to honour letters of credit from Pakistan if the increase in imports is not checked immediately with a substantial rise in exports.

Despite a high trade deficit of $5 billion, Bangladesh still has a positive current account balance. India has posted its first current account deficit of $17.5 billion which it could easily absorb due to high foreign exchange reserves.

Pakistan fails to keep pace with regional economies

 

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Bio-gas project to be commissioned by month-end ​

Sunday, July 13, 2008

KARACHI: A pilot project costing $5 million to produce 486 meters cubic feet of bio-gas and 25 kilowatts of electricity per day from cow dung will be commissioned by the end of July.

President National Engineering Corporation and Chief Executive of the project Syed Feroz Shah told the Sindh Environment and Alternative Energy Minister Askari Taqvi during the latter’s visit to the plant in Cattle Colony, Bin Qasim here on Friday.

He said a British company, HIRAD Plc, has installed this plant as a pilot project to utilise cow dung and convert it into bio-gas and electricity, besides producing 2.25 tons of enriched natural manure (organic fertilizer).

He said the cow dung will not be discharged into the sea as has been done at present and instead this waste will be used to generate bio-gas, electricity and manure.

After the successful experiment, a large plant with a capacity of producing 30 megawatts of electricity, 0.430 million cubic meters of bio-gas and 1,500 tons of manure per day will be installed in cattle colony. “The cost of the large plant is estimated in the range of $120 million and leading multinational companies besides Asian Development Bank (ADB) have already shown their keen interest to invest in this project”, Shah told the minister. He said several such plants of alternate energy can be set up under the joint venture between the local and foreign companies.

The minister gave assurances for all the possible support to the project and said that alternate energy has bright future in the wake of skyrocketing oil prices.

Shaukat Mukhtar, joint secretary of Karachi Dairy Farmers Association and owner of cattle farm where the bio-gas plant in coming up, urged the minister to provide a smooth access to the plant by improving the dilapidated approach road.

Bio-gas project to be commissioned by month-end

 

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Pakistan’s telecom sector: a lost potential? ​

Sunday, July 13, 2008

The Hidden Hands of Government can play a critical role to spawn socioeconomic growth through ICT. This role has been played out successfully in many countries, including neighbouring China and India. Sadly, it still remains absent from every facet of government policy in Pakistan.

In India, the Hidden Hands of Government has managed to generate and sustain annual increases in its GDP that are the envy of developing nations around the world. Through (1) procurement policy (percentage local development & production, relevant technology transfer, relevant knowledge transfer, local R&D),

(2) relevant policy on human resource development (relevant educational institutions, relevant education, relevant training, relevant research), (3) relevant policy on employment generation (local manufacturing to satisfy local demand, excess capacity for export, value added services), and (4) a policy of championing domestic companies through allocating domestic projects to generate relevant domestic experience before developing them into international stars (national-turned-international enterprises).

In the telecommunication sector, we all know how proud our outgoing government was of the way the tele-density, particularly the mobile density, increased in the country. Unfortunately, the primary impact has been to help Pakistan grow as a consumer market. The development of sophisticated indigenous capacity for manufacturing handsets and network equipment and the development of applications for value-added services have been completely ignored. Whereas in India, the public sector operators have enforced that 30 per cent value addition of equipment which they purchase takes place within India. As a result, Nokia set up its plant in India to produce two million phones per month. By January 2009, Motorola will start producing about 1.4 million phones per month. Samsung and LG are already setting up their plants while Sony Ericsson is also on the verge of finalising a deal.

Through this policy, indigenous production substitutes the import of telecom equipment and India progresses from being a consumer to becoming a manufacturer and exporter. The policy is enabling large Indian mobile service providers to target the rural market with aggressive tariffs and low-cost handsets and at the same time helping the Indian government deliver e-health, e-education, e-agriculture, e-government and e-commerce to rural areas. Thus, despite being years ahead of India in terms of attracting FDI in the telecommunication sector and achieving a higher tele-density, Pakistan remains a pure consumer market with zero local manufacturing of handsets and network equipment. One would like to know why not a single equipment manufacturer has established manufacturing facilities in Pakistan?

One would like to know why there is still no government policy to remedy the situation even when the market presents a perfect business case for attracting local manufacturing. According to the Pakistan Telecommunication Authority’s (PTA) 2007 Annual Report, “Around 20 per cent of mobile users in Pakistan change their handset thrice a year which indicates that Pakistan is a lucrative market for manufacturers of mobile handsets and other telecom equipment. A similar percentage of mobile users change the mobile handset once a year and this could be a successful business model”, and “spent about $1.347 billion on import of cellular mobile handsets and other telecom apparatus in 2006-07”. Attracting foreign companies to invest in this area of telecom equipment in the country would decrease the burden on foreign exchange, encourage technology and knowledge transfer and create further employment; the recent levy of Rs1,000 customs duty on mobile handsets will not even remotely address the issue.

While technology buzzwords like 3G, Wi-Fi and WiMAX continue to be whispered in the corridors of our Ministry for IT&T and most broadband and mobile network operators in Pakistan, India’s Telecom Factories, the in-house production units of BSNL have already begun manufacturing the latest generation Wi-Fi and WiMAX equipment under joint ventures with Original Equipment Manufacturers (OEMs). After meeting BSNL requirements at disruptive price points, the JV companies are free to sell these items in the open market or export. One would like to know why not a single broadband or telecom operator has established equipment manufacturing or latest next generation equipment facility in Pakistan?

The Internet kiosks at airports make Pakistan look very primitive. We need to exploit WiMAX technology to provide citywide seamless wireless connectivity in all major cities. Mobile Network Operators ‘Universal Services Fund’ (USF) currently looks at providing services to under-served and un-served regions. Part of the USF should be better utilised to encourage the take-up of ICT by professional groups in cities (government, lawyers, doctors, engineers, teachers, etc)

Consortiums will offer up to, for example, 34 kbps of bandwidth free to subscribers and any additional consumption of bandwidth for higher use will be charged on a pay-per-use basis.

Part of the USF should be better utilised to encourage the take-up of IT by professional groups in cities (government, lawyers, doctors, engineers, teachers, etc).

Start with the airports, government, government institutions, five-start hotels, etc.

Our Ministry of IT&T is currently considering the auction of 3G licences. Whether they are 3G or 4G or technology neutral, new licences will generate very limited one-off revenue in the form of licence fees. However, a licence policy that mandates a request for proposal from all bidders that includes the socio-economic benefits in the form of local R&D facilities, percentage local manufacture/purchase of equipment, local development of value-added services, etc would deliver far greater socioeconomic benefit than licence fees alone. One would like to know why our IT&T policy is still not considering such incentives. One would like to know why our IT&T policy continues to focus on fees alone at the expense of more extensive and longer term socioeconomic benefits.

Telenor recently opened its regional R&I centre in Kuala Lumpur prior to auction of 3G licences by the Malaysian government. With the right policy and government intervention, such R&I centres could be easily attracted to Pakistani shores to conduct local development, local research, local innovation, to ensure knowledge & technology transfer, to generate meaningful employment and create network externalities.

Governments have the unique catalytic ability to push collaboration among public, private, academic, and foreign agencies. Pakistan can achieve these ends through a licensing and procurement policy that encourages local procurement. Our new IT& T policy must consider such incentives.

The implementation of government initiatives at different levels is urgently required in Pakistan. The alternative is to live with Pakistan as a consumer market and not a manufacturer and exporter unlike our neighbours India and China who enjoy the fruits in the form of double-digit contributions to GDP and a massive reduction in imports and burden of the foreign exchange.

The writer, an advocate, is a PML (N) MNA and ex-corporate legal counsel, Telenor.

Pakistan’s telecom sector: a lost potential?

 

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FBR chief stresses modern technology ​

Sunday, July 13, 2008

ISLAMABAD: Federal Board of Revenue Chairman M Abdullah Yousuf has called for an efficient use of modern technology for more revenue generation in order to enhance the tax-to-GDP ratio and expand the tax base.

He was addressing a workshop on ‘Management Automation Projects’ held at the FBR headquarters here on Saturday. Among others, officers dealing with the automation work at field offices of the FBR attended the workshop.

The FBR chairman stressed the need for officers to equip themselves with latest techniques and technologies. “This organisation has a great potential. Once you are fully equipped with modern knowledge, techniques and technology, then it would not be difficult to achieve desired results,” he added.

He was of the opinion that “as an institution, we have to go for a better change. No country or organisation can grow and progress if it remains stagnant. We have to change ourselves with this rapidly changing world to face the challenges of modern times.”

The chairman said: “Although we were happy to cross the psychological barrier of Rs1 trillion in revenue collection in the last fiscal year (2007-08), but still there was a gap of Rs400 to Rs500 billion today.

This gap cannot be bridged until and unless we enhance our tax-to-GDP ratio from existing 11 per cent to 15-16pc. It’s not impossible provided we have the will, commitment and tools to do it.”

He, however, said despite all constraints, handicaps and non-availability of necessary tools the FBR has been able to expand the tax base in the last four years from one million to 2.2 million taxpayers at a growth rate of 20 per cent per annum. He said: “Similarly, we have been able to enhance the revenue collection at an average of about 18 per cent per annum. This is good & fine but, we have to plug the existing gap.”

Commenting on the on-going automation projects, Yusuf said: “We have to realize the dream of making FBR a totally paperless organization.”

He asked the relevant officers and officials to make all possible efforts to achieve this goal. On the occasion, he reminded FBR employees of their responsibilities towards making FBR the most progressive and efficient organization.

Earlier, FBR Director (Projects) Muhammad Asghar Chaudhry said currently four pilot automation projects were in the process of development and implementation. They are; Human Resource Management Solution (HRMS), Electronic Correspondence Management System (e-Dox), Budget & Accounts/Inventory Management System- SAP and e-Archiving. All these projects are at different stages of implementation at FBR headquarters. After their completion, they will be replicated in the field offices of the Board, Chaudhry added.

He said these systems will bring transparency and efficiency in the overall administration and management system of the board.

FBR chief stresses modern technology

 

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S. Arabia to give oil worth $6bn on deferred payment​

ISLAMABAD, July 12: Saudi Arabia has agreed to provide crude oil worth $5.8 billion to Pakistan on deferred payments for the current fiscal year to overcome its increasing financial difficulties.

Sources at the ministries of finance and petroleum have confirmed that Saudi Arabia will provide oil on deferred payments, as requested by Prime Minister Syed Yousuf Raza Gilani and PPP co-chairperson Asif Ali Zardari during their meeting with Saudi King Abdullah bin Abdulaziz last month.

Finance Minister Syed Naveed Qamar met Saudi Ambassador Ali Awadh Asseri on Thursday to discuss modalities regarding the oil facility.

The prime minister’s adviser on economic affairs, Hina Rabbani Khar, told Dawn that there were “positive indications” about oil import on delayed payments from Saudi Arabia. However, she added, issues relating to mode of payments and size of oil facility had yet to be finalised.

Officials were reluctant to quantify the amount and said the modalities were being worked out.

They said Pakistan roughly imported 110,000 barrels of oil daily and 40,150000 barrels annually which, if calculated at the current price of $145 a barrel, amounted to about $5.8 billion. Of the total 202,000 bpd a year, half of crude oil is imported from Saudi Arabia.

Pakistan had first received the $1 billion Saudi oil facility in 1998 when it faced international sanctions for testing nuclear devices. It remained intact till 2003 when Pakistan received only $300 million of the facility.

Sources said that resumption of the Saudi oil facility was very important at a time when the country’s foreign exchange reserves had gone down to $11 billion from $16 billion in November last year. The $11 billion reserves include $2.9 billion held by banks.

“Over $2 billion foreign exchange liability has been created by the State Bank which has to be met at their maturities. In a nutshell our reserves today stand at $6 billion,” a source said.

The sources said Saudi Arabia had also promised to encourage investment in Pakistan’s privatisation programme which aimed to generate $2 billion during the current financial year.

Pakistan plans to hold two international conferences in Jeddah and Riyadh soon to attract foreign investment in oil and gas, agriculture, information technology, construction and real estate sectors.


S. Arabia to give oil worth $6bn on deferred payment -DAWN - Top Stories; July 13, 2008

 

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$15m export loss likely as US firm files bankruptcy​

KARACHI, July 12: A leading importer of readymade garments from Pakistan has filed chapter 11 in the US court for bankruptcy thereby threatening remittances of millions of dollars against shipments made by many exporters.

The importing company Steve & Barry’s had been a leading buyer of garments from Pakistan. However, for some reason the company for last several months stopped remitting proceeds against shipments from Pakistani exporters.

According Rafiq Godil, the chairman of the action committee formed for the rescue of victims of Steve & Barry exports income over $15 million would be lost in case the company is declared bankrupt.

He said for the last several months exporters were not getting remittances against their shipments. However, on inquiry it was found that the importer had cleared the goods because the freight forwarders changed the consignee name in the master bill of lading in connivance with the shipping company.

As a result of this the importer managed to release consignments without realisation of documents in the bank.

Mr. Godil urged the ministry of commerce to intervene in the matter in order to ensure their foreign exchange payment and save the exporters from financial loss.

$15m export loss likely as US firm files bankruptcy -DAWN - Business; July 13, 2008

 

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Pakistani sellers receive large number of orders in Tendence​

KARACHI: Pakistan is likely to have fetched export orders worth $100 million in the world’s most famous lifestyle fair—Tendence 2008, which was recently organised in Frankfurt, Germany.

Trade Development Authority of Pakistan (TDAP) had organised the participation for the Pakistani exhibitors at the five-day fair.

The Pakistani exhibitors were mostly from non-traditional items such as marble, wall clock, handicrafts, furniture, woodcraft, cutlery and kitchen utensils, souvenir items, etc.

Saima Akhtar of Sana Traders, Karachi, said upon her return that the visitors extremely appreciated her items of handicrafts made of rock salt. “Various items such as vases, table lamps, ash-trays and wall clocks were the main focus,” Saima said, adding that if the orders were fianalised she may be able to sell entire production of her factory for next fiscal year. She said that she was coming to this fair for the last several years and running her family business successfully.

Tahir Rafique of Edge Maker Industries, Wazirabad, said that his company was facing cut-throat competition and due to a wave of price hike of food items, the demand for souvenirs and non-traditional items has fallen greatly. However, he said, his firm is surviving on quality and innovative designs. He hoped that his firm would definitely materialize orders of several million dollars.

Muhammad Javid, the partner of Ideal Furniture Company, Chiniot, commented that he was happy to negotiate orders despite his inability to compete prices quoted by Indian and Chinese manufacturers.

“The price of seasoned wood has gone up to Rs 2,400 per square foot as compared to less than half price prevailing in India,” Javid disclosed. In such a situation where a competitor has a massive edge of more than half in cost of production, no one can sell his products, he said.

Since cost of all inputs including electricity, gas and labour has gone out of proportion, it is no less than a miracle to get orders, he said. The Commercial Counselor of Pakistan, Dr Feroz Junejo, said that it was really a wonder that Pakistani exhibitors were negotiating orders at the exhibition despite global recession and vast gap in prices as compared to India and China.

Daily Times - Leading News Resource of Pakistan

 

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OGDCL expedites exploration to meet energy needs​

ISLAMABAD: Oil and Gas Development Company Limited (OGDCL) has adopted a strategy of extensive exploratory and development drilling in order to make additions in oil and gas reserves and ensure sustained growth in its oil and gas production, an official of OGDCL said Saturday.

He said there would be a focus on replicating international best practices and innovative thinking for meeting growing energy demands of the country.

The company has contributed Rs 82.87 billion to the national kitty in the year 2007-08, which was higher than 78.08 billion in the year 2006-07.

The company has also chalked out extensive programme to make new discoveries and enhance production to promote petroleum exploration in the country.

The ongoing and future development projects of OGDCL are UCH-II development project, Qadirput Gas compression project, Qadipur additional Gas capacity enhancement project, Dakhni expansion project, Tando Allayar development, Sinjhoro development project, Sara West development project and Jhal Magsi Poroject

After carrying detailed study of UCH Gas Field, it envisaged that OGDCL is in position to commit 200-220 MMcfd for 14 to 16 year to a new power producer.

After the completion of the project, the gas sale from Uch Gasfield will be enhanced from 250 MMcfd to 450 MMcfd.

In order to maintain 650 MMcfd raw gas plateau, which will start depleting by the end of 2008. Gas compression facilities would be required to maintain the production plateau of 650 MMcfd raw gas up to 2014 and maintain gas supply up to 2017.

Daily Times - Leading News Resource of Pakistan

 

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S. Arabia to give oil worth $6bn on deferred payment​

ISLAMABAD, July 12: Saudi Arabia has agreed to provide crude oil worth $5.8 billion to Pakistan on deferred payments for the current fiscal year to overcome its increasing financial difficulties.

Sources at the ministries of finance and petroleum have confirmed that Saudi Arabia will provide oil on deferred payments, as requested by Prime Minister Syed Yousuf Raza Gilani and PPP co-chairperson Asif Ali Zardari during their meeting with Saudi King Abdullah bin Abdulaziz last month.

Finance Minister Syed Naveed Qamar met Saudi Ambassador Ali Awadh Asseri on Thursday to discuss modalities regarding the oil facility.

The prime minister’s adviser on economic affairs, Hina Rabbani Khar, told Dawn that there were “positive indications” about oil import on delayed payments from Saudi Arabia. However, she added, issues relating to mode of payments and size of oil facility had yet to be finalised.

Officials were reluctant to quantify the amount and said the modalities were being worked out.

They said Pakistan roughly imported 110,000 barrels of oil daily and 40,150000 barrels annually which, if calculated at the current price of $145 a barrel, amounted to about $5.8 billion. Of the total 202,000 bpd a year, half of crude oil is imported from Saudi Arabia.

Pakistan had first received the $1 billion Saudi oil facility in 1998 when it faced international sanctions for testing nuclear devices. It remained intact till 2003 when Pakistan received only $300 million of the facility.

Sources said that resumption of the Saudi oil facility was very important at a time when the country’s foreign exchange reserves had gone down to $11 billion from $16 billion in November last year. The $11 billion reserves include $2.9 billion held by banks.

“Over $2 billion foreign exchange liability has been created by the State Bank which has to be met at their maturities. In a nutshell our reserves today stand at $6 billion,” a source said.

The sources said Saudi Arabia had also promised to encourage investment in Pakistan’s privatisation programme which aimed to generate $2 billion during the current financial year.

Pakistan plans to hold two international conferences in Jeddah and Riyadh soon to attract foreign investment in oil and gas, agriculture, information technology, construction and real estate sectors.


S. Arabia to give oil worth $6bn on deferred payment -DAWN - Top Stories; July 13, 2008

Saudis bail out Pakistan with $5.9bn oil facility​

* Agreement to last until end of current fiscal year
* Saudi Arabia sells about 110,000 barrels of crude oil daily to Pakistan​

JEDDAH: Saudi Arabia agreed in principle on Saturday to defer payments for crude oil sales to Pakistan expected to be worth about $5.9 billion during the 2008-09 financial year.

“There is an agreement ... to defer oil payments. The modalities are being worked out,” Finance Minister Naveed Qamar said in an interview with the Financial Times on Friday night.

While Qamar would not discuss the time-span for which payments on Saudi oil shipments would be deferred, a Petroleum Ministry official separately said that the agreement involved deferring payments until at least June 2009 when the financial year ended.

It was not clear if the deferred payments would have to be paid back. The Saudis in 1998 began supplying crude oil under a deferred payment plan after Pakistan carried out its maiden nuclear tests and came under international sanctions. In that previous case, after three years of deferred payments, the Saudis practically wrote off the payments. Insiders expect that there may be a similar write-off in the future of the deferred payments now under discussion.

Sources in Jeddah indicated to Daily Times that the Saudi economic package may contain a political element too, related to President Pervez Musharraf’s future. This bailout puts the Saudis in the driving seat, along with the Americans, as far as Pakistani internal and external politics is concerned, with both the Pakistan People’s Party and the Pakistan Muslim League-Nawaz (PML-N).

Apparently, the immediate impact will be on PML-N chief Nawaz Sharif’s politics of confrontation with Musharraf, which will have to be diluted significantly in line with ground realities. The Saudis, like the Americans, want a stable transition to civilian rule and no confrontation between the politicians and the military, including Musharraf.

Crude oil: Saudi Arabia sells about 110,000 barrels of crude oil daily to Pakistan or about 40 million barrels a year, which at $147 a barrel comes to about $5.88 billion. Pakistan imports a total of 202,000 barrels per day or approximately 73.7 million barrels a year – half of that from Saudi Arabia. Pakistan consumes a total of 370,000 barrels a day or about 135 million barrels a year. The gap between oil imports and consumption is filled with locally produced oil.

Daily Times - Leading News Resource of Pakistan