Pakistan Economy - News & Updates - Archive

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Thursday, June 08, 2006

RAWALPINDI: Flexible economic policies of Pakistan have opened way of foreign investment in the country besides making it investment friendly country.

President Rawalpindi Chamber of Commerce and Industry (RCCI), Jalil Ahmad Malik said Pakistan has great economic potential and as a result of attractive industrial and agriculture growth, economic relations between UAE and Pakistan are increasing with every passing day. There are many Pakistani businessmen in UAE who are playing active role in socio-economic development of the Emirates, he added.

RCCI president said the private sector of two countries has a great role to play to enhance the trade volume of the two sides. Naveed Janjua invited Pakistani investors to invest in Rais Al Khaimah. “Ras Al Khaimah (RAK) is one of the seven emirates forming the United Arab Emirates (UAE) and there are no personal Income taxes, corporate income taxes and taxes on exports in Ras Al Khaimah”, he added.

 

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Thursday, June 08, 2006

KARACHI: Pakistan’s global IT revenue should reach almost $9 billion by the end of the 2009-2010.

According to a spokesman of Pakistan Software Export Board (PSEB) on Wednesday the body is launching two projects, which will contribute to the government’s objective of providing quality human resources to the industry.

Over the last couple of years, the IT sector has been growing at a pace, with an average growth rate of around 50 percent per annum (Export 60 percent and Domestic 33 percent).

The basic aim of these projects is to help IT companies expand their operations by simultaneously employing more people, and maintain a reduced financial burden on the hiring companies. This will, in turn, help companies recruit more human resources. He said in order to sustain and improve this growth, IT companies need around 232,000 professionals in the IT industry by the end of 2009-2010.

Currently, this number is little above 50,000. The industry needs to add around 180,000 more professionals within the next four years. He said in order to resolve these issues, PSEB will work as a proactive match-maker between educational institutes and the IT industry and will help to provide practical work experience to graduates and students, as expressed on many occasions by the minister of Information Technology, Sardar Awais Ahmad Khan Leghari.

The first phase of PSEB’s IT industry internship project started in 2002. Till date PSEB has placed around 2500 IT graduates throughout the industry for a three month paid internship. Out of these 2500, 80 percent graduates secured jobs based on this experience.

Minister of Information Technology, Sardar Awais Ahmad Khan Leghari would likely to launch the second phase of this program.

In the second phase of this project, PSEB intends to develop a talented human resources pool for the IT, IT-enabled services and computer graphics, animation and games development industry. PSEB aims to play a facilitating role by placing 10,000 students and fresh graduates from educational institutes within the local software industry, IT-enabled service companies, and the IT departments of public and private sector organizations.

In continuation of PSEB’s Internship program, PSEB’s IT industry Apprenticeship program will financially subsidize the IT companies to recruit graduates possessing the basic skills and knowledge in Information Technology and other related disciplines to provide IT/ITeS services. PSEB will subsidize 1,000 employees from export oriented companies.

 

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KARACHI: Computer dealers fear that removal of 15 per cent sales tax - proposed in federal budget 2006-07 - may increase the machine’s price by over 30 per cent at retail level and the decision has gathered them in Islamabad to hold talks with the authorities concerned.

Market sources say the Customs authorities had formally informed the importers about the decision and as per the new measure the new consignments would face 15 per cent general sales tax, which would be ultimately passed on at retail level.

“We are moving to approach CBR (Central Board of Revenue) to convince them that the decision would hurt overall sentiment in computer trade,” said Abdul Ghafoor of Pakistan Office Products, one of the biggest importers of computers and accessories in the country.

“The meeting is not yet decided but people are in Islamabad to meet the CBR high-ups.”

He said it was early to suggest the price increase ratio but the rates would go up by over 25 per cent. A single computer required over 140 components and the budget 2006-07 levied slabs on each component.

The federal government in the budget 2006-07 removed sales tax exemption on computer hardware and its accessories, but all the products have been offered exemption from customs duty. The country imports over Rs30 billion worth of both new and used personal computers and its related products.

On the other hand local assemblers find themselves trapped as they set up assembling units but eventually cost of their business is going to increase manifold.

“The decision would affect each and every stakeholder either purchaser or seller of computers,” said Ghias Khan, Chief Executive Officer of Inbox Computers, a local computer assembling company.

He said the duty would increase production cost of locally assembled computers, which he said would ultimately be borne by customers.

“We are still trying to convince the authorities both in IT ministry and CBR,” Khan added.

However, the importers and local traders in a desperate attempt have gathered in the capital to avoid the fresh slab as they did after budget proposals of 2004-05 when government imposed 5 per cent import duty on computers but later withdrew on industry’s demand.

Retailers of country’s biggest computer paradise housed in twin Unis - Uni Centre and Uni Plaza - situated at I I Chundrigar Road, deal in new computers and accessories are puzzled after new levy imposed in budget 2006-07.

“We have just heard that but have not formally received the orders, but the same would affect prices up to 30 per cent,” said Nadeem Malik, Chairman IT, Karachi Electronic Dealers Association.

Presently, he said, new computers were available in the local market with prices ranging from Rs20,000 to Rs70,000 which could be inflated to Rs26,000 to Rs85,000.

"It is not the cae only of importers or traders,î said Malik. ìIf the government imposes general sales tax, it would also encourage smuggling, which I believe definitely is not required by the government."

 

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Thursday June 08, 2006

ISLAMABAD: The government will once again face a trade deficit of 7.613 billion dollars as it has set the import target of 27.410 billion dollars in comparison with 19.797 billion dollars export target in the fiscal year 2006-07.
According to the statistics issued by Planning Commission on Wednesday the revised export target was 16.777 billion dollars whereas the import target was 23.629 billion dollars and the trade deficit was shown 6.852 billion dollars.

In the next fiscal year, the government will get 1324 million dollars by exporting rice and cotton besides getting 11603 million dollars from the exports of yarn, cloth, readymade garments, tents, canvas, hosiery, towels and bed wear whereas from export of fish, leather, carpets and synthetic textile it will get 1015 million dollars.

Whereas it will spend 27.410 billion dollars on imports expenditures and from the total imports outlay 7.053 billion will be spent on import of oil products, 792 million dollars on import of vegetable oil, 551 million dollars on urea fertilizer, 8.9 billion dollars on capital goods and on miscellaneous import items 12.634 billion dollars will be spent.

 

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Wednesday June 07, 2006

SIALKOT : Sialkot International Airport, costing rupees two billion, would be operational likely on Aug. 14. According to Airport sources, the country's longest runway, measuring 3.6 kilometres, had been completed, which would provide landing and take off facilities to Boeing 747 and other aircraft in bad weather like mist.

The sources said cargo terminal, apron and external roads of the airport had also been completed and terminal for domestic passengers was nearing completion.


According to a rough estimate, over 10,000 exporters of Sialkot, besides a large number of exporters and other passengers of Gujrat, Narowal, Hafizabad, Mandi Bahauddin, Wazirabad, Jehlum and Mirpur (Azad Kashmir) would be benefited with this mega project.


The regular functioning of the airport would not only accelerate the pace of trade and commerce activities, but would also help enhance the export volume to manifold while generate wide employment opportunities in the area. The Sialkot International Airport is being developed on "build, own and operate (BOO)" basis and it would be a landmark not only in the history of this export-oriented city and hub of cottage industries, but would also for the country.


This mega project had a great significance because it was being totally financed by the private sector.


The Sialkot International Airport would fully cater to the needs of golden industrial triangle of Sialkot, Gujranwala and Gujrat. Undoubtedly, the airport will bring a revolutionary change in the socio-economic development of the region.


With the merging of Dry Port, Export Processing Zone and airport at Sialkot, the importance of the area will further enhance, which will ultimately help substantial increase in the exports from the area in future.


The Sialkot Airport is being developed over 1,004 acres of land, where best facilities would be available, besides sufficient space has also been reserved for airlines offices, aircraft catering units, ground handling services, cargo warehouses, restaurant and car parking etc.


According to a rough estimate, 60 percent of aircraft movement will be for domestic, while 40 percent will be for the international carriers. The potential traffic forecast for the Sialkot International Airport is scaled down at the time of opening to 472,000 passengers a year, while estimated cargo tonnage at the time of opening is expected to be 24,000 tons. This means that by the end of year 2012, about 53,000 tones of cargo will be lifted from the SIA.

 

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Monday June 05, 2006

ISLAMABAD : The Private Power Infrastructure Board (PPIB) has decided to implement a 60 megawatts power project in Khuzdar district.

The $50 million project would be developed and implemented in the private sector on international competitive basis to ensure transparency and fair competition, a meeting presided over by Minister for Water and Power Liaqat Ali Jatoi decided on Thursday.


The project based on reciprocating engine technology, using residual furnace oil as fuel, will be located between Khuzdar and Baghbana.

 

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AMSTERDAM (updated on: June 09, 2006, 21:17 PST): Pakistan and Iran will have agreed all important elements of a planned gas pipeline by the end of this year, a government adviser involved in the negotiations said on Friday.

A plan to pump Iranian gas to India through Pakistan was first proposed more than a decade ago, but progress has been slow because of tensions between India and Pakistan and, more recently, US opposition to Iran because of its nuclear programme.

"Certainly within this year, we should have firmed up arrangements ... all the critical parameters will have been addressed," Mukhtar Ahmed told reporters on the sidelines of the World Gas Conference.

Ahmed said the pipeline was economic even without a proposed extension to India, but added Indian officials had expressed eagerness to participate.

In April, the oil ministers of Iran, India and Pakistan held talks in Qatar and said they were close to a deal on the gas pipeline, which could possibly be signed in June.

But while attending as an observer the OPEC meeting in Caracas on June 1, Iranian Oil Minister Kazem Vaziri said that despite good progress, there were issues to resolve, such as the price.

The government's energy advisor said a proposed pipeline from Turkmenistan was less certain because it was unclear if there was sufficient gas available for the project.

Separately, Ahmed said he expected progress on the privatisation of Pakistan Petroleum Limited (PPL) "imminently".

The government listed 10 percent of PPL on the Karachi Stock Exchange in 2004 and last August shortlisted four potential bidders for a 51 percent stake.

 

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RAWALPINDI (June 09 2006): President General Pervez Musharraf on Thursday expressed his strong commitment to socio-economic uplift of the people in Federally Administered Tribal Areas (Fata) through an effective system of governance and provision of economic opportunities in the region.

He was chairing a high-level meeting, which reviewed administrative reforms, development and law and order in the Fata. Prime Minister Shaukat Aziz also attended the meeting. President Musharraf emphasised that stepping up of economic activities at grassroots level would not only stem poverty but also bring prosperity to the masses. "A sustained focus on socioeconomic wellbeing of the local people, better education and health facilities will improve the quality of life for the people in the area," he stated after receiving a briefing from the NWFP governor on Fata.

The President expressed the hope that increased financial allocations would lead to a visible change and usher in an era of development in the tribal areas. He noted that construction of an elaborate road network, hospitals and schools would bring the tribal areas into the mainstream of development.

In his remarks, the Prime Minister said the government has allocated resources for the development of the tribal areas in the budget and added huge allocations would help alleviate poverty in the area and set the pace for fast-track development.

NWFP governor Ali Muhammad Jan Orakzai, chief minister Akram Khan Durrani, information minister Muhammad Ali Durrani, interior minister Aftab Ahmed Khan Sherpao, Adviser to prime minister on Fata Imtiaz Ahmed Sahibzada and senior officials also attended the meeting.

The meeting was part of a formal review of law and order situation, political reforms and development projects in the tribal region. The agenda of meeting includes local participation in development projects, creation of job opportunities, changing political agents, bringing border security forces under the control of political agents and strengthening of levies force to withdraw army from various parts of the tribal belt.

 

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LAHORE (June 09 2006): UK Trade and Investment Director Hamish Daniel has said that Britain, being the largest investor in Pakistan, wants to multiply its investment here and is taking all necessary steps in this regard.

He expressed these views while speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Thursday.

LCCI President Mian Shafqat Ali, Senior Vice-President Abdul Basit, Vice-President Aftab Ahmad Vohra and former LCCI president Mian Misbahur Rehman were also present on the occasion.

Hamish Daniel said that a number of projects were in the pipeline, as the consistent economic policies of the present government had impressed the potential British investors, who had shown their desire to shift their operations to Pakistan, which is not only a corridor to Central Asian states, but also fast getting the status of regional economic leader.

He said the British government would continue to facilitate Pakistani businessmen for the promotion of trade between the two countries. The relations between Pakistan and UK are developing very positively, as a lot of high-ranking visits are expected this year, he added.

Speaking on the occasion, the LCCI chief thanked the British government for getting anti-dumping duty on the export of bed-linen reduced from 9.9 percent to 5.8 percent by the European Union.

Although the trade between Pakistan and UK has been gradually growing from $1.1 billion in 2002-03 to $1.4 billion in 2004-05, showing an increase of 27 percent, but it still leaves much to be desired at in view of the historical relationship between the two countries, he added.

"The participation of Pakistani exporters in the international trade fairs in the UK and vice versa could also expand trade between the two countries", he added.

Shafqat Ali said that Pakistan offers good scope for investors in information technology, telecommunication, infrastructure, textiles (value-addition), oil and gas, water and power, food and food processing, SMEs, engineering, and tourism and services. "We are particularly keen in British investments that could provide transfer of technology to Pakistan", he added.

 

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SIALKOT (June 09 2006): Punjab Chief Minister Pervaiz Elahi has approved the road network project, amounting to Rs 1.42 billion, said Sialkot District Nazim Muhammad Akmal Cheema.

Addressing a press conference here on Thursday, he said under the programme, special attention would be accorded on repair and construction of farm-to-market roads and highways in the district.

Apart from this, the District Nazim said that Sialkot-Gujranwala would be converted into dual carriageway at a cost of Rs 1. 20 billion, while Sialkot-Eminabad road would be constructed, costing more than Rs 720 million, and work on both the mega projects would be carried out in near future, he disclosed. The District Nazim said that modern traffic system would be implemented in the city during the next financial year.

Under the directives of the Chief Minister, Sialkot district government had fixed the priorities for ensuring the facilities of health, education, road network, farm-to-market roads, agriculture and sports in the district, he said.

Cheema said that extra-ordinary efforts were being made for controlling the price hike, and added that a district price control committee was being made effective.

Special efforts were being made for maintaining law and order situation, aimed at protecting life and property of innocent citizen.

The Punjab government would provide more funds during the next financial year for undertaking development projects pertaining to people's welfare and to provide basic facilities to the common man, Cheema said.

Akmal Cheema vowed that all resources and means would be mobilised for converting Sialkot district into a model district as well as utilisation of development funds would be crystal clear.

 

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ISLAMABAD, June 8: The Securities and Exchange Commission of Pakistan (SECP) registered 1,135 companies last month, which is the highest number of new companies registered with the commission during a single month.

With the new incorporations up to May 31, 2006, the total portfolio of registered companies with the SECP has reached 50,001, shows SECP statistics.

Of the 1,135 companies, 1,118 were companies limited by shares having a paid-up capital of Rs1.2814billion. These comprise 11 public unlisted companies, 1,082 private companies and 25 single-member companies.

Besides, seven foreign companies, eight associations not-for-profit and two trade organizations were also registered.

The Company Registration Office (CRO) at Karachi registered the highest number of 297 companies, while Lahore, Islamabad and Peshawar CROs registered 279, 180 and 151 companies, respectively.

The CROs at Multan, Quetta, Faisalabad and Sukkur registered 92, 76, 58 and two companies, respectively.

As per the sector-wise registration, 479 companies were registered in the services sector, 299 in tourism, 64 in trading, 41 in finance and banking, and 33 in the communication sector.

Some 5,478 companies were registered during the period from July 1, 2005 to May 31, 2006 as compared to 3,078 incorporations during the financial year 2004-05.

The increase in company incorporation could be attributed to the pro-business policies adopted by the government and steps taken by the SECP to promote growth in the corporate sector, stated an official announcement.

 

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KARACHI, June 8: JS Air and Airblue’s collaborated first flight would take off on June 17. Destination: Gwadar. At a press briefing held jointly by JS Air and Airblue on Thursday, Air Commodore (retd) Munawar Alam Siddiqui, Chairman of JS Air, said the event would mark a milestone in the history of aviation in Pakistan, since it was the first-ever joint venture between any two airline operators in Pakistan.

The JS Air chairman was flanked by Shahid Khakan Abbasi, chief operating officer of Airblue, Air Cdr (retd) Rizwan Yusuf, chief executive of JS Air and Nadia Siddiqui, group head of corporate communications at JS Group.

Mr Siddiqui said the joint venture partners planned to start operations from the first ‘socio-economic route’ i.e. Gwadar-Karachi. “The volume of flights would soon be increased, with the addition of several other short haul destinations,” he said, adding that the shared vision of the joint partners was to connect socio-economic areas to bigger cities in the country.

It was observed that JS Air was a recently-launched charter aircraft company by the JS (Jahangir Siddiqui) Group that operates in diversified fields. The group core is JS Finance which runs companies in asset management, investment banking, insurance and trade finance, apart from five vertical businesses.

Airblue, designated by the government as the second national carrier, has been operating since 2004 and has a fleet of five Airbus A-320 and A-321 aircraft.

The three airmen sitting on the dais answered reporters’ queries. It was stated that JS Air was entering the aviation industry with two ‘Beach craft 1900 aircraft acquired from the US. The 19-seater (all windows and aisles) aircraft would initially undertake six flights a week on Karachi-Gwadar-Karachi route.

The joint venture with Airblue would synergize operations. Such flights called “commuter operations”, though an unfamiliar term in Pakistan was said to be popular all over the world, with some 450 planes operating in the US alone, as “commuter operators”. The joint venture partners planned to add more aircraft in the fleet in August. One month after the commencement of operations on the Gwadar sector, they planned to introduce a second frequency on the Gwadar route to operate in the afternoon.

Rizwan Yusuf said: “JS Air is a regional air charter business established to serve relatively low passenger-volume routes for commercial airlines as well as providing executive charter services to the oil and gas industry and other leading businesses.”

About Airblue, Shahid Abbasi observed that the airline operated 24 flights daily, serving Karachi, Islamabad, Lahore, Quetta, Peshawar and Faisalabad within Pakistan. In 2005, it commenced short-haul international operations to Dubai and the airline was now finalizing plans to operate additional long-haul routes. “Airblue recently placed a $790 million order with Airbus to purchase 10 additional aircraft with deliveries commencing in 2008,” Mr Abbasi said.

 

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Sanjay Dutta
Thursday, June 08, 2006

NEW DELHI: India is slipping on oil diplomacy. While New Delhi serenades Beijing with MoUs for cooperation, the dragon is choosing to dance with Pakistan for an energy corridor through Gwadar port, creating a shorter route to the Arabian Sea and West Asian oil and gas that lie beyond.

A RAW report says China and Pakistan are examining a joint investment company to finance a slew of projects, including a 21-million-tonne refinery and an oil pipeline, as part of a plan to develop an 'energy zone' around Gwadar port.

This means India's rivalry with China now spreads beyond oilfield acquisitions to transnational pipelines from Iran and Turkmenistan. Pakistan is cultivating Beijing as an alternative to India, which holds the key to economic viability of these projects.

If India walks out of, say the Iran pipeline, Beijing can step in. Beijing has built an oil pipeline from Kazakhstan across the inhospitable terrain of the Tibetan plateau and can tap into a gas pipeline coming into Pakistan from Iran or Turkmenistan.

The plans are expected to be finalised when president Pervez Musharraf travels to Shanghai on June 13 for the fifth Shanghai Cooperation Organisation summit. Oil minister Murli Deora is to represent India at the grouping of hydrocarbons-rich Central Asian countries and China.

Deora's visit comes at a crucial time as India's quest for Central Asian hydrocarbons treasure has failed to make headway, particularly with oilfield deals doddering in Kazakhstan. In contrast, China's Gwadar plan will help bring Central Asia sail closer into its fold.

 

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Abu Dhabi: Pakistan International Airlines yesterday announced that flights between the UAE and Bal-ochistan are to resume after a gap of more than four years.

According to Tanvir Ahmad Khan, Pakistan International Airlines (PIA) Gulf, Middle East and Africa Manager, based in Dubai, the airline has introduced two weekly flights on Thursday and Sundays between Sharjah and Turbat in the Makran division of Pakistan's Balochistan province.

The UAE has a strong Baloch community of about 100,000 members, mainly from Makran.

The first flight, an ATR-5 48-seater, is scheduled to take off from Sharjah International Airport at 10.45am on Sunday.

"We have already informed travel agencies about our new destination from the UAE. We are offering a special price of Dh780, including local airport and fuel taxes, for a return ticket," Khan said.

He added passengers would be allowed a 20kg baggage allowance with a charge of Dh17 per each additional kilogram of baggage.

He said tickets would be available at all PIA ticketing offices and travel agencies throughout the country.

"My advice to passengers is to avoid carrying excess baggage because we have a small aircraft on the route."

A Sharjah-based private company, Orbit Aviation, was scheduled to start its air services between Sharjah and Turbat via Gwadar on May 12.

The company had to cancel the service at the eleventh hour at the request of Pakistan's Civil Aviation Authority.

An official from the company said yesterday they would start the three weekly flights between the two destinations as soon as they sorted out insurance procedures with the Pakistani authorities.

DUBIOUS
Community members reserve judgment

The Baloch community here did not receive the news of the resumption of the air service with excitement.

According to community members, they have been promised this for years but nothing has materialised.

Haji Lal Mohammad, a resident of Al Ain, said: "We have been demanding this service for years. Every time we were promised the service would be resumed this month or the next, but nothing ever happened. Since then we have lost hope, I don't believe the first flight will take off as announced."

Another community member, Mohammad Mir, said he has been hearing this for years. He said: "However, it is a good news if it really happens. The airline should also operate international flights to and from Quetta, which is the capital of the province. It is the only provincial capital of a Pakistani province that does not have an international air link," he added.

Ali Mohammad, Baloch, Pak Baloch and Sindhi Welfare Association Secretary-General, said: "We are grateful to PIA for the support. We hope the new service will succeed. The community will cooperate with the airline to make this service a success so it is expanded in the future."

 

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Friday, June 09, 2006

ISLAMABAD: The ministry of defence is facing several objections on the overall price of land to be acquired for a new international airport in Gwadar as the proposed price is more than 180 percent higher than the amount paid by the Pakistan Railways (PR) for land acquisition in the same area in the recent past, a senior government official told the Daily Times on Thursday.

The ministry of defence has proposed that price of land should stand at over Rs 155,000 per acre for the new airport in Gwadar. The proposed cost is more than 180 percent over the land acquisition cost of Rs 55,000 per acre paid in the recent past by the PR.

The Gwadar airport has been proposed to be built in an area of 6,600 acres about 26 kilometers in the northeast of Gwadar city. The governement anticipates Gwadar to become a regional economic hub and in preparation for this has issued a directive for the development of the new Gwadar international airport. The airport will be given international status and it is expected to operate under the open skies policy. In the meantime, there are plans to improve facilities at the existing airport to facilitate the movement of wide-bodied aircraft, the official said.

The ministry of finance, the Planning and Development Division (P&D) and other authorities concerned have raised objections over the increased cost proposed for land, which is to be acquired for the new international airport. The authorities concerned have objected to the proposed price of land and said that this issue must be looked into separately from the overall project, which has been approved by the P&D in principle. The ministry of defence defended the proposed price and said that it had been calculated by the Military Land Cantonments Department and it is according to land value, which is in practice in the area. The nature of the project was such that the P&D had granted approval to the overall project, but the cost of the scheme could be revised after the report of the special committee, constituted by the Central Development Working Party (CDWP).

The committee, which includes officials from the ministry of finance, ministry of defence and government of Balochistan, will present its report on the issue to the P&D before the next meeting of the CDWP, which is to meet some time this month.

The official said that the ministry of finance and the P&D have agreed on almost all the criteria of the project implementation. However, the ministries are only looking into the land price issue separately due to recent land acquisition by the PR in the same locality. The land acquired by the PR is part of the government's overall strategy to connect Gwadar with the rest of the country and the world through rail, land and air routes as Pakistan sees the underconstruction Gwadar Port to be great hub of economic of activity of the region. Pakistan wants to provide facilities of international standards in and around Gwadar so that foreign traders and investors could get hassle-free access to and from the commercial hub of the country, the official said.