Pakistan Economy - News & Updates - Archive

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ISLAMABAD (updated on: June 06, 2006, 04:08 PST): The government will spend Rs 1.219 billion from next year budget for development of Gwadar deep-sea port, including deepening of the channel and construction of road network linking with main highways.

The country's multi-billion rupees project is already embroiling in controversies, as its inauguration - scheduled for June this year - has been delayed further till December. The major reason behind the inordinate delay is non-completion of civil works, including road and rail linkages with the port.

ACCORDING TO PUBLIC SECTOR DEVELOPMENT PROGRAM 2006-07 for shipping sector, Rs 1.2 billion would be spent on completion of the on-going projects and Rs 19.9 million has been allocated for new development projects.

Though there is no foreign loan involved in the new projects, the government will take Rs 500 million loan for the deepening of the channel of Gwadar port worth Rs 1 billion.

Moreover, Rs 200 million would be spent on linking East bay Expressway with the national road network and acquisition of land for the project to make the linkages possible.

Two new development projects include establishing project management unit at a cost of Rs 14.9 million and development of the internal roads, water supply, drainage and the related amenities for the industrial estate at Gwadar to the tune of Rs 5 million.

These projects have been included in the PSDP 2006-07.

 

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ISLAMABAD (updated on: June 04, 2006, 13:22 PST): The country's education sector is likely to get a fraction of defence spending when a new budget is unveiled on Monday, much to the disappointment of analysts who say more needs to be spent on the young.

The allocation for defence is expected to shoot up 38.6 percent to 310 billion rupees ($5.16 billion) for the 2006/07 fiscal year, starting on July 1, newspapers have reported.

Education spending is difficult to pin down as funds are channelled through federal and provincial governments, but it has been about half that of defence for the last five years.

"If the world calls Pakistan a failed state, it's because of the indicators," said Asad Sayeed, an economist and director of the private Collective for Social Science Research.

"One indicator is that we are one of the highest spenders on defence, as a proportion of GDP (gross domestic product), while spending on education is among the lowest.

"Third World average spending on education is 4.5 percent of GDP, while ours is 2.8 percent. For defence, the Third World average is 2.5-3.0 percent, while, including pensions, we're more than 5 percent," he said.

Some economists and political analysts have long been demanding a cut in defence spending and more funds diverted to education as the government tries to neutralise religious militancy and modernise the education system.

President Pervez Musharraf, who is also army chief, espouses a vision of "enlightened moderation", but critics say he is failing to take advantage of a peace process with India, slow though it may be, to boost education.

"Our relationship with India has been never so cordial as today," Sayeed said. "People want to see an impact of a peace dividend on defence expenditure."

In the 2004/05 financial year, the government spent 212 billion rupees on defence, compared with 117 billion on education. In the first half of this financial year, defence spending was 119 billion, while 58 billion went on education.

"EMERGENCY"

Cricketer-turned-politician Imran Khan, a critic of Musharraf, said the education sector needed emergency help, for the sake of the country's future.

"The whole progress of the country depends on education and the Musharraf regime is responsible for the worst cuts in educational spending," Khan told Reuters.

"There is an emergency situation in Pakistan as far as education is concerned, and the issue should be tackled on an emergency basis," said Khan, who heads the Pakistan Tehreek-e-Insaf party.

"At least people are getting a free education in these madrasas," he said.

Pakistan's rulers had to realise the country needed an educated population to compete, said Mutahir Ahmed, professor of International Relations at the University of Karachi.

"In the context of South Asia, and in Pakistan, the rulers have always thought defence and weaponry is the most vital thing to survive," said the professor.

"But we need some balance. We need trained and qualified people to compete and survive in this world. If that isn't done, we'll be left behind.

 

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APP, ISLAMABAD

June 5: Minister for Information Technology, Awais Ahmad Khan Leghari yesterday said IT sector in the country was contributing significantly to creation of employment opportunities and has already created 250,000 jobs within the last two years.

He said the IT industry was going from strength to strength and every month it required an additional 8000-10000 work force which was not being met efficiently due to a lack of quality education at the top level.

He was addressing the annual prize distribution ceremony of Ghazali College for Women, Islamabad.

He called for strengthening linkages between industry and academia to pave way for the production of top quality human resource that formed the core of a knowledge-based economy.

"We no longer live in the industrialization age it is the information age and any country that does not build a knowledge- based economy would fail to make headway into the next information age," he said.

The Minister said no developed country could afford to have undeveloped human resource. "Everything now revolves around people and if their potential can be harnessed well, nobody can stop them from attaining a position of eminence in the polity of nations," he said.

He said Pakistan's success in the telecom sector had established the fact that with right kind of policies and patronage at the highest political level, any sector could produce miraculous turnarounds.

"IT thrives on the quality human resource and the government is working aggressively in collaboration with universities to produce top-notch graduates in IT and telecommunication," he added.

He said his ministry had planned to launch an outreach scholarship programme worth over Rs. 250 million to pick up talented college students from remote and backward areas and then train them in the boot camps before their admission to four tier- one universities of the country.

"Up to 200 students who are admitted to IT and telecom disciplines by these universities, would be offered fully funded scholarships to complete their degrees in a congenial and competitive academic atmosphere," he said.

He said the ministry had also developed an internship programme for the country's IT industry to offer internship to 10,000 IT graduates who would be offered 6-month-long internship each at a leading IT company for which they would be paid Rs 6,000 monthly stipend.

He said the internship project was being launched in the backdrop of an acute shortage of high-end IT professionals within the IT industry which needed 8,000 such professionals for the next year alone.

"We hope the internship programme would generate jobs, help companies get required trained human resource besides leading to an overall upgradation of the IT and telecom disciplines in the higher-education institutions," he said.

He said the government had also launched a multi-million Venture Capital Fund to promote managerial and entrepreneurial skills, finance new businesses and start-up companies keen on producing service-based IT solutions. "We would also focus on academic institutions as the ministry wants to work with them to develop interesting ideas and specific entrepreneurial skills," he added.

 

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By Robert Ditcham, Staff Reporter

Dubai: Limitless, the Dubai-based real estate developer, will invest more than Dh73 billion in a new mega project in Karachi, Pakistan's commercial capital.

The company will spearhead the Karachi Waterfront, a 25,000-hectare collection of residential, commercial, recreational and entertainment facilities, and represents its first international project since being officially launched by Dubai World in April.

Phase one of the project will involve an investment of Dh73.4 billion over the next ten years for developing over 2,000 hectares of waterfront property.

The new city will be home to special economic zones, creating a hub for trading, manufacturing and services industries.

Subsequent phases are expected to involve much larger investments.

The project is part of the Pakistani government's initiative to relieve pressure on Karachi and attract investment into the country.

Dubai World Chairman Sultan Ahmad Bin Sulayem revealed details of the project after a ceremony held in Islamabad which was attended by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and Pakistan's Prime Minister Shaukat Aziz.

"This is a major project involving phased development of the 25,000 hectare site west of Karachi. It will be a new Karachi," said Bin Sulayem.

"Limitless' focus on creating balanced developments for large urban communities will ensure that the development meets the economic and social needs of the government and people of Pakistan," he said.

Company sources said several other projects are in the pipeline, some planned for Dubai, which will be announced shortly.

"In the coming months we hope to reveal more details of other projects, but only when we are confident we have found the best solution to address the needs of each community," Limitless CEO Saeed Ahmad Saeed said.

Limitless is part of Dubai World, the holding company that includes Nakheel, Istithmar, the Ports, Customs and Free Zone Corporation as well as DP World.

Its announcement follows strong Middle East interest in Pakistan. Emaar recently unveiled four major Pakistan projects worth almost Dh75 billion, while Dubai Islamic Bank said it plans to open 70 branches in the next 18 months.

http://www.gulfnews.com/business/Re...y/10045051.html

 

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Tuesday, June 06, 2006

* Auto sector disappointed, happy

By Arshad Hussain

KARACHI: Economic analysts have welcomed the federal budget 2006-07 saying it is people-friendly and will give a boost to the agriculture and the measures announced will reduce inflation.

After the budget speech 2006-07 telecast on television, leading analysts claimed that the budget would improve the country’s economy, but have a slight negative impact on the bourses.

“Overall, the budget is good for the economy and supportive of the low-income group,” said Mohammad Sohail, director research at Jahangir Siddiqui and Co. The main focus of the budget is the agriculture sector and tax relaxation for the agriculture sector will further help bring down the cost of agricultural production, he added.

He said the government is trying to control inflation and have set the inflation target at 6.6 percent in the budget.

Khalid Iqbal Siddiqui, of Invest Capital and Securities, a local brokerage house, said: “The finance ministry has enhanced the Capital Value Tax (CVT) from 0.01 percent to 0.02 percent, but it will have slight impact on trading at the bourses.” Later, the market will be on the normal track

However, he said, five percent Central Excise Duty (CED) levied on non-fund base in the banking sector will affect the banks’ profit. “Overall, the budget is good for the poor class,” he added.

Murad Ansari of KASB Securities said: The “increase in government employees’ salaries, pensions, tax relaxation on the import of tractors, subsidy on fertilizer would have positive impact on the country’s economy.”

Auto sector: Welcoming the budget 2006-07, H M Shahzad, chairman of the All Pakistan Motor Dealers Association, said that the government has kept the previous import policy unchanged in the budget, but it has proposed to ban import of above five-year old vehicles, which will negatively affect the CBR earnings.

In the current budget, the old vehicle importers have paid above Rs 20 billion to the Central Board of Revenue under the head of customs duties and other taxes. So far, he said, investors have imported more than 35,000 old vehicles in the current fiscal.

The government has reduced the duty slabs on the import of commercial vehicles from 60 percent to 30 percent on completely built units (CBU).

Kanwar Idrees, Chairman of the Pakistan Auto Mobile Manufacturing, said: “The import of commercial vehicles will not be a major threat to domestic vehicles’ manufacturers.” He said the government has not changed the previous auto import policy, which they were expecting.

He said: “I don’t see any threat to the local industry in the budget and we don’t expect any large import of commercial vehicles. There is no change in depreciation.” He said the zero percent exemption on the import of tractors would help the agriculture sector, but the minister did not say how long this exemption would continue. He said an investor needed two to three years to set up an industry

He said the production figures of two tractor-manufacturing companies, Millat and Ghazi, had touched 50,000, three times over last three years.

 

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Tuesday, June 06, 2006

By Khalid Hasan

WASHINGTON: Pakistan, according to one commentator, is poised to join China and India as one of Asia's new “tiger” economies.

A commentary released by United Press International (UPI) said Pakistan has enjoyed US financial support that has paved the way for new private investment and is turning the country's period of military rule into an economic success story. “The publication Monday of the Pakistan government's budget demonstrates this dramatic change in the country's financial fortunes, with surging growth and new investment plans that suggest the world's second most populous Islamic nation is poised to join China and India as one of Asia's new ‘tiger’ economies.

The Persian Gulf sheikhdom of Dubai is to invest an initial $10 billion in Pakistan's boom, mainly in property, port and transport development, a sum that may triple to $30 billion if current negotiations succeed,” the commentary said.

The World Bank, UPI pointed out, is now doubling its own investment loans to $6.5 billion. The government is also to increase its own development budget by 50 percent. It quoted Salman Shah, economic adviser to the Prime Minister, as having announced at a press conference on Sunday that the country's gross domestic product has grown at an annual rate of 6.6 percent in the latest fiscal year. The commentary noted that Pakistan's growth rate has averaged an annual 7 percent over the past four years, helping lift almost 20 million of Pakistan's 150 million people out of poverty. The proportion of Pakistanis officially calculated as living below the population has fallen from over a third to less than a quarter in the past five years, it quoted Shah as saying.

The commentary said, “Pakistan's take-off began with the War on Terror, starting with the war to topple the Taliban regime in Afghanistan in 2001. That triggered a big US aid program, starting with $91 million in the first year and rising steadily to $706 million in 2005. US and international funds were joined by private investment from the Arab world and the Gulf states as the military government of President Gen. Pervez Musharraf launched a programme of economic reform and privatisation. Pakistan Telecom was privatised last year, with the bulk of the shares being bought by companies based in the United Arab Emirates.

Dubai Ports World is bidding for the management contract to run the new Chinese-built port of Gwadar and other Gulf companies are investing in the new road and rail links from Gwadar to China and Central Asia. UPI said President Musharraf is now seeking to emulate India's success in the high-tech and IT sectors, telling the annual OPEN Silicon Valley conference Saturday that “a network of infrastructure is in place to serve as trade and energy corridor for the landlocked Central Asia, South Asia, the Gulf region and China.” However, the commentary pointed out that Pakistan's future prospects are far from guaranteed. Political instability, violent spillovers from the Taliban insurgency in Afghanistan, a new surge in the oil price or new tensions with India could all jeopardize the country's future growth.

 

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TOPI (updated on: June 07, 2006, 20:52 PST): President General Pervez Musharraf said on Wednesday that Pakistan has made remarkable upsurge in economic development over the last few years and to sustain high economic growth the government has greatly enhanced spending on higher education for human resource development.

Addressing the 10th convocation of the Ghulam Ishaq Khan Institute of Engineering Sciences and Technology here, the President underscored the need for further cementing the linkages between human resource development and economic progress and outlined his vision to achieve the desired goals.

"We have to do a lot of work to produce highly qualified manpower and will seek assistance of the foreign countries towards this end," he said.

The President said, "Pakistan is no more in the economic stagnation of 1990s and higher education budget which was Rs.600 million in the past has now been raised to over 22 billion rupees."

He expressed the hope that the Higher Education Commission would fulfil its national obligations of improving the higher education under the stewardship of Dr.Atta Ur Rehman. Referring to the situation in the region, the President said despite the turbulent events Pakistan would maintain the pace of economic development.

"We are not facing any external threat; the threat is from within the country in the shape of extremism and terrorism," he said, adding that the government was not scared and would successfully deal with the problem.

The President condemned the elements exploiting religion for their political ends and said that Islam is not only a religion but a complete code of life. Islam teaches unity and cohesion and it is progressive and not retrogressive religion, he added.

He said the GDP of the country has risen from Rs.63 billion to 132 billion over the past five years, which needs to be further enhanced. It is comparatively good in the Muslim Ummah but far below than that of even a small European country with a population of less than 5 million.

The President cited lack of knowledge-based economy as a prime factor for low GDP. The present government, he said, has adopted a holistic approach to meet the challenges and is focusing on promoting literacy rate, primary and secondary education with special reference to engineering sciences.

He called for further strengthening the trilateral bond among the industries, technical institutes and development research.

President Musharraf said, "we need to enhance productive capacity of the economy by fully utilising the human resources."

The President said that nine world class science and technology universities would be set up in the country which would become functional by 2008 with the assistance of Italy, South Korea, Japan, France, Sweden, Netherland, Austria and Japan.

These would have linkages with the local industries which would help attract sizeable investment.

He told the audience that to improve the technical education system the government had decided to establish high standard national vocational and technical education centres.

The President said the government would take care of the external debt liability of the GIKI for the next four years and also announced Rs.50 million for the institute.

He also announced to double the cash award for the gold medallist students. Congratulating the passing out graduates for obtaining Bachelors, Masters and Ph.D degrees in different disciplines of engineering sciences.

The president conferred degrees on 196 BS graduates, 40 MS graduates and five Ph.D scholars. He also awarded gold medals to the outstanding students. The Rector of the institute Dr Abdullah Sadiq, in his welcome address, said that the NWFP and Balochistan governments, the institute's alumni and some of its friends, and more recently the Government of the Punjab, were supporting the studies of deserving students at GIKI.

The Institute has succeeded in its endeavour to impart quality education to the students, he said. "Over the years the Institute has been able to attract from abroad highly qualified professionals, both Pakistani and foreigners. Many of them are now serving in leading positions in the country."

 

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ISLAMABAD (June 07 2006): Big revenue spinners in the new financial year (2006-07) would be 15 percent excise duty on international air travel (Rs 3.5 billion), fixed tax on income from property (Rs 3 billion), 7 percent increase in cigarettes' retail price (Rs 3 billion).

GST on computer hardware (Rs 2.5 billion), excise duty on banking services (Rs 2.2 billion) and increase in withholding tax from 0.1 percent to 0.2 percent on cash withdrawals of above Rs 25,000 from banks (Rs 2.3 billion).

The data prepared by the Central Board of Revenue (CBR) shows that total taxation measures projected for 2006-07 would amount to Rs 25.1 billion. The relief measures announced in budget would cost CBR Rs 16.7 billion. The net additional revenue from changes made in the budget would be in the vicinity of Rs 8.4 billion.

The break-up of relief measures introduced in the budget showed that the government would suffer revenue loss of Rs 6.7 billion due to change in customs duty structure. The relief on the sales tax side would cost Rs 1.2 billion, and relief measures on the income tax side would cost Rs 8.8 billion.

Major relief measures on the customs side are: duty-free import of agriculture tractors would result in a revenue loss of Rs 500 million; exemption of 5 percent customs duty on import of computer hardware/parts Rs 500 million; duty exemption on medicines and life saving drugs Rs 400 million; poultry industry Rs 670 million; special incentives for dairy industry Rs 250 million; horticulture Rs 250 million; duty reduction on broadcasting equipment Rs 300 million; and duty reduction on import of raw materials for the growth of industrial sector would cost Rs 1600 million.

On the other hand, the revenue generation target under the head of 'customs duty' is nil.

The revenue measures on sales tax side would bring in Rs 14.3 billion and relief measures would cause loss of Rs 1.2 billion.

Cost of relief measures: The zero-rating of sales tax for the dairy industry and other sectors would cost one billion rupees and zero-rating on import/supply of trucks and dumpers would cost Rs 200 million.

Major revenue generation measures: The GST on import and local supply of computer hardware would generate Rs 2.5 billion; 15 percent excise duty on international air travel Rs 3.5 billion; banking services Rs 2.2 billion; 5 percent excise duty on 'franchise' services Rs 1 billion; cable TV operators to pay Rs 25 per connection per month as excise duty Rs 500 million; increase in retail price of cigarettes Rs 3 billion; enhancing excise duty from 3 to 5 percent on insurance service Rs 700 million; and Rs 100 per metric ton (PMT) tax on coal would generate additional revenue of Rs 200 million.

On the income tax side, the revenue measures would generate Rs 10.8 billion, whereas relief measures would cost the government Rs 8.8 billion.

Revenue Gains: Flat tax at the rate of 5 percent on gross rent would generate an amount of Rs 3 billion; 2 percent capital value tax (CVT) on immovable property Rs 800 million; and CVT on shares transactions on stock exchanges would generate an amount of Rs 3.6 billion. Only Karachi Stock Exchange (KSE) is likely to deposit an amount of Rs 3.5 billion by the end of current fiscal year.

The increase in withholding tax from 0.1 percent to 0.2 percent on cash withdrawal above Rs 25,000 from banks is likely to generate Rs 2.3 billion in 2006-07. The Board has so far collected Rs 1.7 billion during July-March 2005-06 against the target of Rs 5 billion set for the outgoing fiscal year. According to CBR's estimates, the collection from the levy would be Rs 2.3 billion in the next fiscal year.

 

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KARACHI (June 07 2006): A Malaysian conglomerate - IRIS-RIST Group, intends to come up with an investment of 500 million dollars over the next 16 months in the IT, environment and power sectors in Sindh. IRIS representatives Omer Iqbal Wahla stated this while talking to APP here on Tuesday.

He said a delegation of the conglomerate called on the Sindh Governor Dr Ishrat ul Ibad Khan. The meeting was held at the Governor House here on Tuesday. The Adviser to the Sindh Chief Minister on Information Technology Muhammad Noman Saigal was also present on the occasion.

The delegation made a presentation to the governor on three projects in IT, environment and power sectors. It was pointed out that those projects would entail an investment of about dollars 500 million and create over 5,000 technical jobs in Sindh.

In each of these projects, Pakistani work force will be trained as per international standards. The projects will be on 'build-own-operate' (BOO), not requiring any funding from the government; it was further pointed out.

The IT project, which is in the process of being implemented is the vehicle registration and driving licence project on smart cards on 900 basis to provide world standard chip-based biometric enabled security documents. It will make available many facilities and services to the public on one smart card, increase security, prevent crimes especially the car and motor cycle thefts.

The IRIS Corporation - it was pointed out, is a global security solution provider with core expertise in the area of securing government security documents i e national ID and chip based, International Civil Aviation organisation compliant e-passport.

In the environment sector, an urban air quality management and vehicle testing project has been started by IRIS-RIST on BOO basis. This project will see many international quality inspection and testing stations across the province to provide clean air quality for the citizens, prevent accidents of unfit vehicles as well as providing safety for the public.

In the power sector, MSC Power will set up a 10 MW to 75 MW alternative energy solar wind water power plants at the national, provincial, district and tehsil / town levels to help mitigate the rising fuel costs.

The Sindh Governor Dr Ishrat ul Ibad Khan appreciated the investment for the province. He stressed that the solutions should be people centric with maximum possible facilities on the same smart card so that there was great value addition for citizens.

The Governor stated that the vehicle testing should be implemented in a phased manner. Solution to the power crisis is also a need of the hour. The delegation included IRIS Corporation Director Michael Choong, MSC Power CEO Steven Mok and Puspakom CEO Wan Haji Salamat.

 

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ISLAMABAD (June 07 2006): Rs 5.5 billion will be provided to the Science and Technology sector in 2006-07, under the Public Sector Development Programme as against Rs 3.9 billion provided last year, say the Planning Commission.

Science and Technology as well as R&D are important determinants of innovation and knowledge generation and are now being given greater emphasis after years of neglect. While university education is being strengthened, preparations are underway to overhaul R&D across the complete spectrum, from infrastructure to human resources, to international linkages, all within the envelope of much increased funding.

Proportion of R&D expenditure to GDP is however still low (0.4%) compared with some countries that have successfully built indigenous capability to innovate, produce new technology as well as design new products.

The major constraint was always the numbers and quality of manpower. S&T and R&D efforts were partly constrained by the lack of a critical mass of scientists and engineers. In 2000, Pakistan had 100 scientists and engineers per million populations, compared with 500 in Malaysia, 350 in China, and 149 in India.

During the financial year 2005-06, an amount of Rs 3892.00 million was allocated for Science & Technology Sector.

Out of this, Rs 3071.000 million were earmarked for Ministry of Science & Technology, Rs 596 million for Pakistan Atomic Energy Commission (PAEC), Rs 111 million for Pakistan Space & Upper Atmosphere Research Commission (SUPARCO), Rs 75 million for National Engineering Science Commission (NESCOM), Rs 55 million for Pakistan Meteorological Department and Rs 11 million for Pakistan Nuclear Regulatory Authority (PNRA).

The allocation for Ministry of Science & Technology was reduced to Rs 2264.183 million in the 3rd quarter review. It is expected that 90% of the total allocation would be utilised by June 2006.

During 2005-2006, the Ministry of Science & Technology had assembled a portfolio of 120 projects with an outlay of Rs 16.00 billion. Some important projects have been the TROSS programme (93 scholars placed in various centers of excellence abroad).

Under Water Quality Monitoring Projects, executed during 2005-06, some 33,000 field tests were undertaken by the PCRWR. Pakistan's water standards have been revised by the PSQCA, in consultations with all the stakeholders. In Cholistan desert, nearly 100,000 persons with 2.0 million cattle heads have been stabilised by provision of drinking water around the year.

In Balochistan, concept of Leaky Dams has been successfully tested to improve water supply during lean season.

Energy continues to be in great demand, and Pakistan is currently implementing several projects, which make use of cleaner alternative energy sources. The Meteorology Department has established a potential to generate 1,100MW electricity through wind measurements in a 10,000sq km area in coastal belt of Sindh, and nearly 700MW of wind energy will be generated in the next couple of years through several 'wind farms' being set up by the private sector.

The AEDB has also been tasked to provide electricity to 400 remote villages through solar PV and micro-wind turbines. Additionally, scores of micro hydro-power stations have been installed in remote areas of the NWFP and Northern Areas where WAPDA network does not exist.

So far, 4 laboratories of the PCSIR, out of 7 in the country, have attained the prestigious ISO 17025 certification as another is due to graduate soon. Services were rendered to some 6,600 business/industrial units. The NPSL laboratories at Islamabad have been granted ISO 17025 and the 'Newton Tree' through the EU, a unique distinction that testifies to the R&D quality system being established by the realigned PCSIR.

CAMB at Lahore imparted crucial forensic training to police investigation units, while land-levellers have been successfully developed through PAEC and are being marketed with extreme success.

A strategic study for 12 leading sectors of the economy was undertaken in consultation with principal stake-holders in public-private sector for HEC, and for eventual incorporation in the MTDF. Pakistan has established 28 bilateral Agreements/MOUs for S&T cooperation since 1972.

Only 08 were funded in the PSDP 2005-06. The construction of Head Offices of PCSIR and PSF at Constitution Avenue, and the PCRWR laboratories at H-8, have been completed. Likewise construction of Ministry's own office-complex on Constitution Avenue is underway.

These programmes have will continue during 2006-07, with an amount of Rs 5498.8 million allocated for Science & Technology Sector. This includes Rs 4431.2 million for Ministry of Science & Technology, Rs 646.1 million for Pakistan Atomic Energy Commission, Rs 375 million for SUPARCO, Rs 38.0 million for NESCOM and Rs 8.5 million for Pakistan Met Department.

The progress in S&T sector is mainly dependent on quality technical manpower, modern equipment, requisite infrastructure and institutional facilities in existence.

 

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Advancement in scientific knowledge and development of a technological base are essentially required for rapid industrial growth. This emphasises availability of information about the latest technical developments world-wide. It has, therefore, been planned to establish a Technology Information and Dissemination Unit at PCST to facilitate the industrial sector.

Establishments of accredited laboratories and trained manpower are required to provide testing, certification services for maintaining quality standards. PNAC is planning to help in lab accreditation. The issue of intellectual property rights (IPR) is of great importance for R&D with regard to industrial technology development.

A strong IPR regime encourages R&D and foreign investments on international level. The IPR system is being administered by the TRIPs Agreement of WTO. This agreement is however, not favourable to the economies with a low knowledge base. Awareness about the various aspects of IPR, especially the patents and industrial design, the fundamental outputs of R&D efforts is required.

The Pakistan Council for Scientific and Industrial Research (PCSIR) is undergoing some major refurbishment and capacity building so that it can effectively carry out the important task of industrial oriented research and develop technologies, processes and products which can be used for the technological up-gradation of the industry and improving product quality.

The Council's services in testing, calibration, certification and patenting etc for the industrial products and processes will be important determinants towards quality assurance in industry.

While agricultural research continues to be supported, new emerging areas such as biotechnology and nanotechnology are seeing good growth because of the good work initiated by the National Commission set up to promote these fields. Pakistan Council for Renewable Energy Technologies (PCRET), is expanding its silicon PV activities, which will supplement the activities of the Alternate Energy Development Board (AEDB).

The Pakistan Council of Research in Water Resources (PCRWR) has established water quality testing and monitoring labs network to support the programme for safe and clean drinking water recently started by the government.

National Institute of Oceanography (NIO) Karachi is finally being revamped and reinvigorated to undertake the next phase of demarcation of our EEZ. Participation in the International Seabed Authority (ISBA) meetings and Antarctic Research Programme are continuing.

Raising the Knowledge Content in Agriculture, Manufacturing and Service Sectors.

It is necessary to bridge the gap among industry, academic and R&D institutes. While the larger industries, businesses and farmers have access to finance and technology, the smaller entrepreneurs and manufacturers face greater paucity in all areas.

Focus will be on facilitation for transfer of technology, resource planning (and acquisition of certified seed, fertiliser and other technical inputs in case of agriculture) and business skills. SME's and industries will be encouraged to move along the value chain into knowledge-intensive activities, for exploiting the huge unprocessed resources in agriculture.

A key factor in modern economies is the widespread 'off-shoring' of services, since distances become irrelevant in the presence of fast electronic communications.

Back-office/call centres, digital transformations and archiving through CAD are some typical activities which are growing fast in Pakistan because of lower costs per 'seat'; the bandwidths will be increased and costs reduced to attract more businesses in this area.

A major opportunity exists in design services in textiles, publishing, electronics, and precision mechanical parts. This will benefit from enhancement in education and skills coupled with improved communication services.

INSTITUTIONAL ARRANGEMENTS The Planning Commission has been reformed and restructured in recent weeks which will help co-ordinate and facilitate the implementation of knowledge economy. Its multi-sector membership, which includes representatives from other line departments, business and industry, and the academia, enable it to oversee the implementation of the MTDF. Which of course will be implemented by relevant ministries and agencies.

Planning Commission will forge partnerships and networking among different players through the creation of technical working groups to steer and oversee particular DKE programmes and projects. It will act as the think tank and resource bank for the government, with forecasting through policy research units, which will be strengthened and augmented. Indicator will be prepared for monitoring implementation and progress of projects and facilitation mechanisms.

The Government will continue to intensify efforts towards innovation and technology-led development to meet the requirements of a knowledge-based economy. To complement the efforts of the Government, the private sector will need to keep pace with the technology advancements in the global environment as well as expand their capacity in R&D.

The challenge lies in developing a competitive edge at the global level. This will be determined by our ability to create, acquire and use knowledge for socio-economic development.

Ministry of Science & Technology and Higher Education Commission have to play a critically important role in the transition towards a "Knowledge-Economy". Only by arming with the right knowledge and skills, transmitted across an efficient and cheap communication system, that we can improve our living standards and provide a decent future to our children.

 

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ISLAMABAD (June 07 2006): The private sector is pleased with the budgetary steps and it termed the budget 2006-07 a well-thought-of official document worked out to protect the common man from price hike and exempt different areas from duties and taxes to help them play more active role to boost the economy.

In his comments on the budget, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) former president and chairman Pak-US Business Council Iftikhar Ali Malik said the government took a number of bold decisions to strengthen the economy and improve living standard of the people.

He termed agriculture and livestock sector in particular a potential area that could take Pakistan's economic growth to new height. He said exploitation of livestock sector, which was granted incentives in the form of exemption in duties and taxes on import of farming machinery, pesticides and soft loans, could turn it an income-generating area for the rural population and contribute toward the national kitty in the form of different taxes.

He said the private sector was confident that budgetary measures will make livestock and other sectors directly related to agriculture and industry an attraction for investors and subsequently make it strong enough to deliver good to the economy.

He was of the view that budgetary incentives will help the livestock sector grow at a faster pace in coming years and meet domestic demand of meat, milk and other dairy products, besides generating surplus to export and earn foreign exchange.

The government has exempted livestock sector from duty and sales tax in the budget 2006-07. He was confident the livestock exploitation would help the government stop ongoing migration from rural to urban areas and address other related issues.

He also appreciated the government's step to expand Utility Store Corporation (USC) network and increase mobile units number to outreach a large number of people to supply essential items at concessional rates for immediate relief to the poor and low income groups.

He said essential items prices were already showing a downward trend and the same trend would continue in the future to stabilise essential items prices in the open market.

He termed taxing real estate business an important step, saying levy of capital value tax (CVT) on this sector would help the government generate more revenue and spend more on the social sector development in coming years.

Saarc Chamber of Commerce and industry vice-president Jamil Magoo said the Self-Employment Scheme and increase in the government employees' salaries and pensions were good steps and these should be appreciated by all.

He said political parties should not criticise the government just for the sake of criticism and rather support its good decisions particularly meant for relief of low income groups and the poor.

He said huge PSDP of Rs 415 billion for the next fiscal year was of great significance as it will improve life standard of the general public as well as generate more jobs for the unemployed.

He said the people should reduce dependence on imported goods. He said the culture of promoting home-made items will help the government cut down import bill and encourage local industry to invest more and expand domestic industrial base.

 

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ISLAMABAD (June 07 2006): Chairman Alternative Energy Development Board (AEDB) Air Marshall Shahid Hamid (Retd) has said 600 megawatts of electricity costing 9.5 paisas per unit would be generated through wind turbines by the end of 2007.

He told a private TV channel that tariff for alternative energy generation was settled with two companies. He said negotiations were continuing with various other companies for tariff fixing. The wind turbines would be set up along the coastal areas, he added. Besides, a plant was being installed in Landhi, Karachi with the collaboration of New Zealand for producing 25 megawatts electricity from cattle dung and trash.

He said a plan for providing agricultural tools run by solar energy to the poor people in rural areas of Sindh and Balochistan was underway.

 

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KARACHI: Pakistan has planned to float eurobonds to the tune of Rs30.25 billion in 2006-07, showed the budget documents, but did not give the timeframe for the issuance of bonds.

In the outgoing year (2005-06), a record amount of Rs47.92 billion was raised through bonds to finance budgetary needs of the country.

In the new fiscal year beginning in July, the country will retire interest liabilities worth Rs20.41 billion against swapped eurobonds issued earlier.

During FY06, compared to the target of Rs2.05 billion, the government retired interest liabilities of Rs1.01 billion against swapped eurobonds.

The amount received as privatisation proceeds stood at Rs90 billion in FY 2005-06 against the target of Rs20 billion while for the new fiscal year, the target for privatisation proceeds has been fixed at Rs75 billion.

So far, the privatisation process has yielded Rs3,554 billion. Under the law, some percentage of privatisation proceeds has to be spent on social services but so far successive governments have failed to issue balance sheet of the privatisation fund for the information of taxpayers.

It is expected that the new federal minister for privatisation will issue a fact sheet giving details of the utilisation of privatisation proceeds.

The budget documents showed the contribution of State Bank of Pakistan to federal revenues would jump to record Rs35 billion in FY 2006-07.

The central bank, after making usual provisions for reserve fund and paying dividend, transfers surplus profit to the federal government. The SBP also pays dividend on share capital of the federal government. In FY06, the central bank contributed Rs18 billion.

The documents showed the central bank would auction Rs15 billion worth of market treasury bills in FY07, which was Rs3 billion less than the amount raised in FY06. The SBP mopped up Rs18 billion in FY06 against the target of Rs17 billion.

 

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Wednesday June 07, 2006

Peshawar: Provincial Earthquake Reconstruction and Rehabilitation Authority (PERRA), NWFP government officials and UN representatives have launched $296 million ERRA-UN Early Recovery Plan which is to bridge the transition period from relief to reconstruction.
The Early Recovery Plan covers activities over a 12-month period starting in May 2006 a critical year to lay the groundwork for successful longer-term reconstruction.

It presents proposals for programmes in priority sectors for donor partners to turn pledges into concrete contributions.

The objective is to ensure the availability of essential services at the areas of origin for the tens of thousands of families that have returned. It is a needs driven plan identifying the priorities of the beneficiaries in NWFP and AJK.

Chief among them is the need to restore and set the basis for improvements in the standards of living of the stricken community in both urban and rural areas. There is also a need to re-establish basic education and primary and secondary health care services, and to ensure access to safe water.

Damaged rural housing and urban centres need to be rebuilt using earthquake resistant techniques. Balance will be maintained in the implementation of projects between the NWFP and AJK.

United Nations Resident Coordinator, Jan Vandemoortele said that the plan emphasizes on training and capacity development of human resources of the local governments in the affected areas.

"The UN plans to set up 150 pre-fabricated basic health units and more than 32 schools during this year. The provision of seeds, farming tools and livestock will be one of the priorities for restoring livelihoods, especially for women in the affected areas."

The provincial and local authorities are the drivers that will implement recovery activities outlined in the Action Plan. Every effort will be made to ensure that communities are provided with a meaningful voice in the planning and implementation processes.

The design of the Action Plan encourages transparency and accountability in the use of resources. Monitoring activities will include on-site surveillance, regular reporting, and financial expenditure tracking.

The Action Plan offers a platform for the Government and partners to integrate planning, implementation, and monitoring of activities at the field level.

It is essential to translate the Early Recovery strategy into real action so as to sustain effective interventions. The plan is flexible and will be reviewed regularly.

Some of the major challenges foreseen in the coming months are landslides in monsoons, the rebuilding of roads and bridges, ensuring of necessary provisions for the residual caseload and contingency planning for the next winter.

Furthermore, there is an urgent need to address issues such as rubble removal and urban/ rural planning, including land tenure, house deeds, and compulsory sale.

Getting the transition right will be essential for successful reconstruction. The purpose of the Early Recovery Plan is to make that happen.

Earlier the ERRA-UN early recovery plan was successfully launched at New York Geneva, Islamabad and Muzaffarabad. The plan has been presented to the donors by the Government of Pakistan, ERRA and the UN.