Pakistan Economy - News & Updates - Archive

[Neo]

Agenda revised: CDWP to take up 52 projects worth Rs 322.460 billion now​

* Foreign exchange component of projects amounts to Rs 117.966bn​

By Ijaz Kakakhel

ISLAMABAD: The agenda for the first meeting of Central Development Working Party (CDWP) of the current financial year 2008-09 to be held on Sept 18 has been revised and now it is likely to take up 52 development projects worth Rs 322.460 billion including foreign exchange component (FEC) worth Rs 117.966 billion.

Planning Commission Deputy Chairman M Salman Faruqui will preside the meeting in projects for 14 sectors including agriculture and food, devolution and area development, education, water resources, energy, environment, forestry and wildlife, governance, health, Higher Education Commission (HEC), information technology sector, mass media/culture, social welfare, transport and communication sectors.

Some of the projects of national importance in the CDWP are the Chasma Nuclear Power Project units 3&4 worth Rs 139.011 billion, establishment of 43.5 MW Jagran Hydropower Station (Phase-2) District Neelum AJK worth Rs 5.003 billion with Rs 2.222 billion as FEC. Agriculture Sector Development Loan Project Phase-II worth Rs 10.029 billion and Indus Water Sector Capacity Building and Advisory Services Project (WCAD) with a cost of Rs 2.546 billion.

The CDWP can only approve projects costing up to Rs 500 million and projects costing above this limit must be approved by the Executive Committee of the National Economic Council (ECNEC). Therefore, the CDWP will recommend projects costing above Rs 500 million to ECNEC for further approval.

The revised CDWP agenda obtained by Daily Times shows that the agriculture and food sector consists of three projects worth Rs 10.289 billion. The devolution and area development sector consist two projects worth Rs 872.391 million having Rs 402.68 million as FEC.

The education sector has five projects worth Rs 1.848 billion. The agenda shows six projects for water resources sector with a total cost of Rs 11.364 billion with FEC worth Rs 2.546 billion.

The energy sector consists of 11 projects worth Rs 267.936 billion with Rs 103.030 billion as FEC. The environment sector consists of four developmental projects worth Rs 1.956 billion with Rs 1.039 billion FEC. The revised CDWP agenda further revealed that the forestry and wildlife sector has a single project namely, ‘Rehabilitation of denuded forest areas through sowing and planning and development of farm/social forestry with community participation in northern areas’, with a cost of Rs 170.869 million having Rs 1.200 million as FEC.

The governance sector consists of three projects worth Rs 6.163 billion with Rs 190 million as FEC. The health sector has a single project worth Rs 796.050 million with Rs 787.500 million.

The Higher Education Commission (HEC) has eight development projects with a total cost of Rs 5.912 billion having Rs 1.731 billion as FEC. The information technology sector has single project namely, ‘IT training for the elected lady representatives: Phase-II’, worth Rs 97.288 million. The mass media, culture, sports and tourism sector has single project namely, ‘Establishment of Pak China Friendship Center at Islamabad (Modified PC-1)’, worth Rs 1.602 billion. The social welfare sector also has single project namely, ‘Communication for effective social services delivery (CESSD): A community participation project, Phase-II’, worth Rs 560.500 million, with Rs 560.500 million as FEC.

The transport and communication sectors have five development projects worth Rs 12.888 billion with Rs 6.450 billion as FEC.

 

[dr.umer]

E-banking transactions grow by 32% to Rs 13.9 Tln in FY08​

KARACHI, Sept 13 (APP): Electronic Banking (E-banking) is getting increasingly popular as the number and value of E-banking transactions in the country have shown a significant growth in the last fiscal year.

According State Bank of Pakistan’s report titled “ Retail Payment Systems of Pakistan” (Paper-based and E-banking) , a total of 124.6 million E-banking transactions valuing Rs 13.9 trillion were recorded during the last fiscal year (FY08), showing a growth of 25.4% in numbers and 32.3% in amount when compared with the fiscal year (FY07).

During FY08 , the volume and value of e-Banking channels (POS, Internet and Call Center/IVR , and Mobile) transactions in the country reached 20.0 million and Rs 120.1 billion depicting an increase of 15.6 percent in numbers and 31.9 percent in value as compared to 46.0 percent in numbers and 63.8 percent in value in the previous fiscal year.

According to the Report , the quantity of active (in-use) debit / credit cards during FY08 reached at 6.7 million, which shows an aggregate growth of 15.8 percent compared to 53.7 percent increase in the previous fiscal year. The quantity of credit cards has in fact decreased by 8.9 percent as compared to 74 percent increase in the previous fiscal year reaching at 1.5 million. In contrast, the debit cards registered a growth of 24.7 percent as compared to 45.3 % increase in previous fiscal year and stood at 5.0 million.

The Report pointed out that the total number of Automated Teller Machines (ATMs) during FY08 reached at 3,121 registering a growth of 21.0 percent as compared to 17.0 percent increase in the previous fiscal year. The volume of Real Time Online Branches (RTOB) during FY08 reached at 5,282 and recorded a growth of 26.4 percent as compared to 5.0 percent decline in the previous fiscal year. The volume of Point of Sales (POS) reached at 55,853 showing a growth of 21.0 percent in number as compared to 4.0 percent increase in previous fiscal year.

According to the Report, during FY 08 the volume and value of ATM transactions in the country reached 67.9 million and Rs 453.0 billion showing an increase of 31.8 percent in numbers and 43.2 percent in value as compared to 47.1 percent increase in numbers and 49.9 percent in value in the previous fiscal year. Moreover, the volume and value of RTOB transactions in FY08 reached 36.9 million and Rs 13.3 trillion showing an increase of 19.9 percent in numbers and 32 percent in value as compared to 46.2 percent increase in numbers and 49.0 percent in value in the previous fiscal year.

The Report said that the volume and value of paper-based transactions in the country during FY08 reached 334.4 million and Rs.137.4 trillion registering an increase of 3.1 percent in numbers and 20.9 percent in value as compared to 48.1 percent increase in numbers and 29.4 percent in value in the previous fiscal year.

The Report said the overall total retail payments in the country during FY08 reached at 459.0 million and Rs.151.3 trillion respectively registering an increase of 8.4 percent in number and 21.8 percent in value as compared to 17.2 percent increase in numbers and 35.0 percent in value in FY07.

It may be mentioned here that retail payments are mainly made by consumers and between commercial counterparts to purchase goods and services. At the retail level, most transactions use paper based instruments. However, electronic mode is also getting momentum with the passage of time. Retail payments in Pakistan are comprised of various paper-based and electronic instruments from conventional cheques to modern smart cards.

 

[dr.umer]

Growth target to be cut in new integrated economic package​

ISLAMABAD: With the deliberations of Planning Commission's Panel of Economists, the government will announce an integrated economic package next month with revised macro-economic targets, including cutting the GDP growth below five per cent.

The Panel of Economists, comprising eminent economists and members of academia and headed by Dr Hafeez A Pasha, started two-day deliberations here on Saturday as they got briefings from all secretaries of economic ministries about the latest developments in their respective areas.

They would hold their internal meeting today (Sunday) for finalising their recommendations to put the economy back on the right track. They also held meeting with Prime Minister Syed Yousuf Raza Gilani.

The new package will give a clear-cut roadmap to apprise the donors and the nation of its future course of action on immediate, short and long-term basis for stabilising the ailing economy.

"We have formally kick-started brain storming sessions with eminent economists of this country as the government wants to come up with stabilisation package within one month period," Deputy Chairman Planning Commission, Salman Faruqui, told a couple of journalists after attending daylong maiden deliberations of the Panel of Economists constituted by the Planning Commission (PC) to get input on overall economic situation here on Saturday evening.

The PC deputy chairman said that the government was so far doing good work in "piecemeal" but now they have decided to put in place an integrated programme for achieving stabilization of the national economy.

The country's eminent economists, he said, would present various options before the government for tackling the challenging economic situation on the macroeconomic front as well as monetary and fiscal policies. He said the panel of economists constituted by the Planning Commission and Economic Advisory Council (EAC) under the chairmanship of Finance Minister Syed Naveed Qamar, would hold joint meetings in future to firm up the stabilisation programme.

He said the Finance Ministry was preparing a separate stabilisation programme and these two formulated programmes would be integrated into one for putting in place an effective programme for short as well as on long-term basis.

He said the comprehensive package would provide out of box solutions to the existing energy and food crises and giving a roadmap to overcome loadshedding till December 2009.

The ongoing exercise is aimed at revising all macro-economic targets including the GDP growth as estimates showed that cotton production was not up to the mark. The production of rice and upcoming wheat crop is expected to achieve the envisaged target but lower cotton production will hamper the overall growth of the agriculture sector.

"The continuous loadshading and surge in mark-up will also hamper growth of large scale manufacturing so we will have to revise downwards the overall GDP growth from 5.5 per cent to below 5 per cent for 2008-09," a federal secretary who briefed the panel of economists told The News outside the Planning Commission Auditorium on Saturday afternoon.

The major challenge for the government, the secretary said, is to stabilise the economy at the first stage as all economic indicators are in nosedive mode and the immediate requirement is to reverse this trend.

The panel was further informed by the secretaries of economic ministries that Islamabad would be able to get over $5 billion package from Saudi Arabia in the shape of deferred oil payment, cash assistance and fertilisers on deferred payments.

"There is expectation of holding another follow-up meeting between officials of Saudi Arabia and Pakistan probably after Eid either in Islamabad or Jeddah in order to finalise the modalities," said the sources while quoting secretaries as saying.

 

[Neo]

Remittances rise 23pc to $1.22bn ​

Sunday, September 14, 2008

KARACHI: Remittances sent home by overseas Pakistanis continued to rise as $1,219.51 million was received in the first two months (July-August) of the current fiscal year 2008-09, showing an increase of $234.31 million or 23.78 per cent over the same period of the last fiscal year.

According to the State Bank of Pakistan (SBP), the amount of $1,219.51 million includes $0.06 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The monthly average remittances for the period of July-August, 2008 comes out to $609.76 million as compared to $492.60 million during the same corresponding period of the last fiscal year, registering an increase of 23.78 per cent.

The inflow of remittances in the July-August, 2008 period from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to $319.84 million, $264.64 million, $206.70 million, $201.45 million, $74.82 million and $32.70 million, respectively as compared to $265.33 million, $202.40 million, $142.88 million, $156.88 million, $82.81 million and $28.88 million, respectively in the July-August, 2007 period.

“Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first two months of the current fiscal year 2008-09 amounted to $119.30 million as against $105.60 million in the same period last year,” SBP said.

During the previous month (August 2008), Pakistani workers remitted an amount of $592.30 million, up $102.79 million or 21 per cent when compared with an amount of $489.51 million brought into the country in August 2007.

The inflow of remittances into Pakistan from almost all countries of the world increased last month as compared to August, 2007. According to the break up, remittances from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to $151.45 million, $131.38 million, $101.39 million, $101.35 million, $32.78 million and $15.63 million, respectively as compared to the corresponding receipts from the respective countries during August 2007, ie $137.34 million, $95.85 million, $72.58 million, $79.53 million, $43.31 million and $14.07 million.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during August, 2008 amounted to $58.31 million as compared to $46.70 million during August, 2007.

 

[Neo]

Situation in Fata depressing businessmen​

KARACHI, Sept 13: The uncertainty triggered by increasing US attacks in the tribal areas is hurting business sentiments in Karachi, Lahore and other cities, but businessmen are not forthcoming with a direct and straight comment because of obvious reasons.

Few warn that outcome of the present firework would emerge after some time, but many believe that business and economy in Pakistan is in its worst phase and any further worsening would deteriorate the situation.

In private, the businessmen agree with the assessment given by politicians, academics and well known analysts that US administration is applying all pressure on Pakistan to get some tangible results to show to US electorate before next American presidential elections.

They believe that extremists have been using women and children as human shield and their casualties in Pakistan-Afghan border from US intrusion is stimulating strong anti-American feelings which has a potential of turning into a strong anti-Islamabad wave and may cause destabilisation.

Many businessmen believe that business sentiments in Pakistan were shaken by the killing of PPP leader Benazir Bhutto on Dec 27 and it never recovered from that shock.

“There are very few occasions to enjoy,’’ a business leader recalled while reminding Feb 18 election results, the formation of a coalition of major political parties. That was followed by depressing events.

“It has all along been dull and drab, and the situation has remained uncertain for the last eight or nine months,’’ said a corporate leader who added that the flight of capital from Pakistan was witnessed on an unprecedented scale. Multinational corporations, international organisations, world sport bodies and business bodies are reluctant to hold events in Pakistan.

“Imagine Harvard alumni from South Asia planned to have their annual session in Pakistan in December 2007,” a well known corporate leader said to point out that the event was held in New Dehli.

A task force on Small and Medium Enterprises of Organisation of Islamic Countries (OIC) held its meeting in Bangkok last month instead of Pakistan because of the reasons known to all.

“No impact at all,” remarked Akbar Sheikh, a former chairman of All-Pakistan Textile Mills Association, as he is convinced that business sentiment in Pakistan, at present, is at its lowest ebb to the extent that it cannot be pulled further down. “Why should we bother on implications of US intrusion in our territory when Pakistan’s industry has been given a crippling blow by the budget and post-budget measures,’’ he remarked in a telephonic conversation from Lahore.

Nonetheless, as a Muslim, a Pakistani and as a human being “my heart bleeds on killing of innocent men, women and children in these attacks.’’

“Any threat on national security is bound to dampen business sentiment,” remarked spontaneously another former chairman of All-Pakistan Textile Mills Association who fears further mounting pressure in the days to come.

Saudi Arabia’s delay in taking a decision on extending six billion dollars oil facility to Pakistan is the first manifestation of how Americans can pressure Pakistan.

As he disclosed, the elected government was planning to approach Kuwait, Qatar and UAE to seek financial relief from the present acute economic crunch.

At least for the next few weeks, till the next US presidential elections, he advised that we should wait and see.

Iqbal Ibrahim, the All-Pakistan Textile Mills Association chairman in Europe, endorsed the position taken by the Army chief and the government, but refused to go beyond this as what he said, “I am not a politician.”

He made it clear that as a businessman and leader of business community it was none of his business to advise what the government should do and what it should not do.

He declared that the business community would be with the government on whatever position it takes on external relations.

Majyd Aziz, a former president of Karachi Chamber of Commerce and Industry, said that the business community is yet to take stock of the situation arising from recent developments on Pakistan-Afghan border.

He appreciates the position taken by the Army chief which was later endorsed by the elected political leadership, but supports opposition parties’ plea of convening a joint parliamentary session.

“Prudence and caution should be the hallmark of the position to be taken on such a sensitive and explosive issue,” he suggested.

The best course, he said, would be to demonstrate to US and world at large that all Pakistanis share same concern on US intrusion into our territory.

“Only Pakistanis have a right and the capacity to address this issue,’’ he stressed.

 

[Neo]

Gilani asks for solutions to economic issues​

ISLAMABAD, Sept 13: Prime Minister Syed Yousuf Raza Gilani on Saturday emphasised on the eminent economists and members of the academia to engage in an active dialogue for finding solutions to major economic problems.

In a meeting with the participants of the first round-table of the Planning Commission’s Panel of Economists who called on him at the PM House, Mr Gilani said the government was taking bold initiatives and seeking out of the box solutions to face the pressures on economic front which include rising inflation and low economic growth.

The prime minister welcomed the setting up of the panel at a time when the economy was faced with serious challenges.

He said the government was committed to protecting the poor and vulnerable groups.

Mr Gilani expressed the confidence that the panel would assist the government in formulating policy response in key areas by identifying structural changes for sustained growth, transforming the economy to production-led growth, investment, prioritising sectors for economic growth especially agriculture sector, best utilisation of available resources, attracting private investment and encouraging public-private partnership in infrastructure development.

He also emphasised the importance of health and education sectors being the basis of future economic development and most effective ways of assisting the poor in improving their living standards.

The round-table was informed that the Planning Commission was being converted into a knowledge commission where the best minds of the country could debate and discuss the pressing economic challenges.

Task forces have been set up on food security, energy, science and technology, infrastructure, social sector and climate change.

The panel comprising the brains in the economic field was holding a two-day round-table to advise on how best the country can regain macroeconomic stability with respectable growth in the most efficient and equitable manner.

Dr Hafeez A. Pasha, chairman of the panel, pledged his best to the nation saying that the panel comprises representatives from all the provinces and will work in close coordination with the Economic Advisory Council.

Other members of the advisory panel included Dr Rashid Amjad (Convener), Dr Akmal Hussain, Dr Akhtar Hassan Khan, Dr Naveed Hamid, Dr Riazuddin, Dr Kaiser Bengali, Dr Qazi Masood Ahmed, Dr Ali Cheema, Haris Gazdar, Dr Asad Sayeed, Dr Toseef Ahmed, Dr Aisha Ghaus Pasha, Dr Faisal Bari, Dr Naseer Ali Khan, Dr Saqib Sherani and Dr Rehana Siddiqui.

Ehtisham Ahmed of the IMF and Ijaz Nabi of the World Bank also attended the round-table.

State Bank of Pakistan Governor Dr Shamshad Akhtar, secretary finance, secretary water and power, secretary economic affairs, secretary commerce, secretary food and agriculture, secretary industries, acting secretary petroleum and the Wapda chairman also attended the meeting.

 

[Neo]

Macro-Economic Stabilisation Plan being finalised ​

* Panel of economists formed by PC to recommend short-, medium- and long-term strategies​

ISLAMABAD: A Macro-Economic Stabilization Plan will be finalized as an integrated package in one-month time to cope up with fiscal and monetary difficulties, setting short, medium- and long-term goals, Deputy Chairman Planning Commission M Salman Faruqui told Daily Times on Saturday.

Planning Commission’s Panel of Economists started its work in this regard here on Saturday. Ministry of Finance in collaboration with Economic Advisory Committee would also recommend measures for economic stabilization and final plan would be integrated to meet the challenges.

In the light of Macro-Economic Stabilization Plan, the government is expected to revise downwards its Macro-Economic targets fixed in the budget for the current fiscal year 2008-09. First Roundtable of Planning Commission’s Panel of Economists was held here Saturday. Deputy Chairman Planning Commission M. Salman Faruqui chaired it. Governor State Bank Dr Shamshad Akhtar, Secretary Finance, Secretary Water and Power, Secretary Economic Affairs, Secretary Commerce, and Secretary Food attended the roundtable.

The Panel of Economists termed as “best human capital of Pakistan” is comprised of eminent economists like Dr. Rashid Amjad (Convener), Dr Akmal Hussain, Dr. Akhtar Hassan Khan, Dr. Naved Hamid, Dr. Riazuddin, Dr. Kaiser Bengali, Dr. Qazi Masood Ahmed, Dr. Ali Cheema, Haris Gazdar, Dr. Asad Sayeed, Dr. Toseef Ahmed, Dr. Aisha Ghaus Pasha, Dr. Faisal Bari, Dr. Naseer Ali Khan, Dr. Saqib Sherani and Dr. Rehana Siddiqui. Ehtisham Ahmed of IMF and Ijaz Nabi (associated with World Bank till recently) also attended the roundtable.

Faruqui told Daily Times that during the first roundtable issues relating to energy, wheat, hydal power, dams, industry, commerce, petroleum and food and agriculture were discussed in the light of presentations given by the respective ministries. The Panel of economists would be proposing within a month a Macro Economic Stabilization Plan to the government to meet the challenges faced by each sector of economy with short-, medium- and long-term strategies.

He said task forces for Economy, Energy, Infrastructure, Social Sector, Food and Agriculture have been formed to recommend concrete measures for the Macro-Economic Stabilization Plan. He said the PC has also decided to form a task force on Climate Change to suggest ways to deal with the situation arising out of melting of glaciers.

 

[Neo]

GDP growth target likely to be lowered to 5 percent​

* IMF team starts review of economy to help meet challenges​

ISLAMABAD: Pakistan’s Gross Domestic Product (GDP) growth target for the fiscal year 2008-09 is likely to be lowered from 5.5 percent to around 5 percent, a senior official at the Ministry of Finance told Daily Times on Saturday.

GDP growth targets are being revised in view of disturbed manufacturing due to the increased load shedding and the cotton crop output being less than expected, the official disclosed.

Changes being finalised in the macroeconomic framework would result in the lowering of the growth forecast of the economy in the current fiscal year, the official said, adding that macroeconomic targets would be re-adjusted and a revised growth forecast made ready in a month.

The Ministry of Finance had set the GDP growth target at 5.5 percent for fiscal year 2008-09, despite having 6.8 percent GDP growth in the previous fiscal year 2007-08. This was due to power shortages, less water availability for agriculture production and rising oil prices.

Challenges: The official added that a technical mission from the International Monetary Fund (IMF) had started a technical review of the economic situation and was holding meeting with economic managers.

He said the purpose of the mission’s visit was to help the Pakistani authorities to meet the challenges posed by the current economic imbalance.

The IMF would provide technical input to Pakistan to meet the economic challenges in the short term as well as the medium term, he said.

Explaining the background of the Letter of Comfort condition imposed by the IMF authorities for new loans, the official said that recent economic destabilisation needed immediate correction and stabilisation measures. The stabilisation of Pakistan’s economy would help remove the condition of the Letter of Comfort, the official explained.

Earlier, the World Bank (WB) and the International Finance Corporation’s flagship report ‘Ease of Doing Business 2009’ had ranked Pakistan 77 among 181 countries around the globe.

The report had noted that in terms of the ease of procedures to start business, Pakistan stood at the 11th place.

An entrepreneur is required to pay 47 types of taxes in Pakistan. Tax rates as percentage of profits in are 28.90 percent, according to the report.

WB expert Karim Belayachi had told journalists that in terms of investors’ protection, Pakistan’s performance had been remarkable and its efforts were ranked the highest in South Asia.

 

[Neo]

Redesigning gas pipeline: Pakistani team to hold talks in Tehran on September 27 ​

ISLAMABAD (September 14 2008): Pakistan has simply ignored US advice to stay away from the India-Pakistan-Iran (IPI) gas pipeline as it will be sending a three-member official delegation to Tehran on September 26 for two-day talks with Iranian authorities for redesigning the gas line as a two-nation project.

The talks are to be held in Tehran on September 27 and 28. Petroleum Secretary (Incharge) G A Sabri will lead the Pakistan side. Pakistan's Ambassador to Tehran will assist the Pakistan delegation. Sources said that Pakistani would ask the Iranian counterpart in next round of talks to give a final deadline for completing all formalities and executing the project as early as possible.

Pakistan's concern is that its gas reserves are quickly depleting and market demand is growing. Islamabad is fully conscious of the significance of early execution of the IPI line for supplementing domestic gas supply. The government is desperately looking for materalising at least one of the three gas line projects.

Since IPI pipeline project has made some progress in the recent past, Pakistan wants to bring it on the ground within the possible shortest time period. The concerned authorities are of the view that Pakistan's side would tell Iranians about urgency in the coming talks and seek a well-defined timeframe for laying down of the pipeline.

The two sides had agreed to follow a segmental approach for IPI line to avoid delay in an accord they signed in Islamabad at the end of steering committee meeting held in May last. Islamabad is not bothering what the US thinks on Iranian gas pipeline. It is convinced that IPI project is the only possible option for importing gas for plugging the gap in demand and supply of gas.

The US had shown concern over Pakistan's consistent approach for IPI project. Its delegation, which visited Islamabad last month for talks with Pakistani officials on energy, reiterated its stance on the issue. The US delegation led by Secretary on Energy told the officials in Islamabad that Iran-Pakistan-India (IPI) gas pipeline project was not acceptable to Washington, as long as its standoff with Tehran on nuclear issue persisted. The US officials demanded that instead of wasting its time and resources on IPI project Islamabad should work on some alternative sources to get additional sources of comparatively cheaper sources of fuel.

The US Secretary for Energy who held talks with the officials on Pakistan's energy crisis and possible resources was categorical in one of the meetings that Washington was seriously concerned over the way Pakistan was pushing forward its plan for making IPI project a two-nation project. IPI is the worst victim of US policy of blocking any project which Washington feels is not in line with its interests in today's quickly changing world. During the last over one decade it has suffered for one reason or another.

 

[Neo]

250 million tons of coal reservoirs discovered near Chakwal ​

LAHORE (September 14 2008): About 250 million tons of coal reservoirs have been discovered near Chakwal. Punjab government is considering generating energy on cheaper rates from these reservoirs. This was revealed during a meeting held to review various proposals and options regarding provision of energy to industrial estates in Lahore. Punjab Chief Minister, Shahbaz Sharif presided over the meeting.

Sources told Business Recorder that the Punjab government is considering various options to meet the electricity demands in industrial estates for which top priority has been given to energy generation from coal.

Addressing the meeting, Shahbaz said that provision of energy to industrial estates is of paramount importance for the promotion of industrial production and foreign investment and Punjab government is considering various options to meet this demand in which top priority has been given to energy generation from coal. Besides this, suggestions for generation of energy from waste bio-mass and hydel power are also under consideration, he added.

Shahbaz said that we have to utilise all resources for generation of energy to enhance industrial production and experts should compile their recommendations as soon as possible so that final strategy could be evolved in the light of these recommendations.

He said that private sector should be included in the projects of generation of energy from coal and it should give proposals regarding exploration of coal from mines. He said that foreign companies should also be contacted in this regard. Shahbaz directed to set up a committee for giving final shape to various suggestions.

Nadim Babar highlighted various suggestions regarding provision of energy to industrial estates. Secretary Industries, Secretary Irrigation, Chairman Planning & Development, Haroon Khawaja, Mohsin Syed, Ahmad Alman Aslam, Shafqat Elahi, Mansoor Afrin, Waqar Ahmad Khan and other concerned officers were also present in the meeting.

 

[Neo]

Significant fall in oil production ​

KARACHI (September 13 2008): Oil production of the country fell by a significant 9.3 percent on year-on-year basis in July 2008 due to the annual turnaround and maintenance jobs at some key oil fields. However, gas production increased by 2.5 percent whereas LPG production fell by 13.7 percent in this period.

According to official figures Pakistan's hydrocarbon production has shown a meager increase of 1.2 percent on year-on-year basis in July 2008. OGDC's oil and gas production fell by 9 percent and 5 percent on yearly basis respectively, whereas LPG production fell by a sizeable 46 percent during the first month of FY09.

"The fall in oil production was mainly on the back of production falls in the Bobi, Chanda, Pasakhi and Sono fields", Saad Arshad, an analyst at Invest Capital Securities said.

However, this decrease was somewhat offset by a jump in production from the Kunar, Tando Alam and Mela fields, he added. Gas production of the company was affected by falls of 4 percent and 8 percent in the operated and non-operated fields respectively.

PPL's overall production rose by a modest 1.3 percent on yearly basis in July 2008, following an increase of 1.4 percent in gas production. The increase in gas production was mainly on account of production hikes in the Qadirpur and Kandhkot fields. Oil production of the company fell by a meager 0.2 percent, largely due to annual turnaround at the Adhi field. The fall in production from the Adhi and Manzalai fields offset the production increases from the Mela and Makori fields.

POL's overall production fell by 21 percent in July 2008 as the company's oil and gas production fell by 29 percent and 15 percent respectively. The company's LPG production was also down by 20 percent. The fall in oil production was mainly due to 63 percent fall in Pindori field's production.

The other three major fields of the company, Meyal, Balaksar, and Pariwali also suffered production falls of 11 percent, 38 percent and 21 percent respectively. Gas production was down due to production falls of 8 percent, 26 percent, 20 percent and 15 percent in the Pariwali, Ratana, Adhi and Manzalai fields respectively.

 

[Neo]

Agriculture sector performs poorly during 2007-08 ​

ISLAMABAD (September 14 2008): The agriculture sector has performed poorly in the financial year 2007-08, growing at 1.5 percent against the target of 4.8 percent. "The poor performance of agriculture can be attributed to an equally poor performance of major crops and forestry, registering negative growth of 3.0 percent and 8.5 percent, respectively," official sources said.

Livestock, minor crops and fishing have been the saving grace as these sectors have performed reasonably well to compensate the performance of major crops and forestry to arrive at 1.5 percent growth in agriculture this year. Major crops, accounting for 34 percent of agriculture and 7.1 percent of GDP, suffered on account of poor sowing of wheat and cotton and less than satisfactory performance of rice crop.

Sugarcane and maize being other two major crops performed impressively in 2007-08, sources added. The cotton crop suffered for a variety of reasons including heavy rainfall in May 2007 causing poor germination in Punjab, high temperature during August and September 2007 causing more shedding of fruit parts and pest attack, especially dangerous mealy bug infestation. Consequently, cotton production declined to 11.7 million bales this year from 12.9 million bales last year, thus registering a negative growth of 9.3 percent, sources added.

The wheat crop was adversely affected by the shortage of irrigation water by 23.3 percent over normal supplies during Rabi and inordinate spike in prices of DAP fertiliser. Accordingly, production of wheat declined to 21.7 million tons from 23.3 million tons last year, registering a decline of 6.6 percent. However, the two other major crops performed better with sugarcane recording highest ever production level of 63.9 million tons, 16.8 percent higher than last year.

The production of rice witnessed a modest growth of 2.3 percent and stood at 5.6 million tons. Minor crops accounting for 12 percent in agriculture value added posted a growth of 4.9 percent against the negative growth of 1.3 percent last year.

The performance of livestock accounting for 52.2 percent of agricultural value added was satisfactory at 3.8 percent. The performance of fisheries has been impressive as it grew by 11 percent in 2007-08 because inland fish catch has increased by 11.1 percent while the output of marine fishing grew by 11.5 percent during 2007-08.

Forestry followed the traditional negative growth pattern for the fifth year in a row. This small sector with only one percent stake in the overall value-addition in agriculture, registered negative growth of 8.5 percent in 2007-08 as the turnout of production of timber and firewood during the year declined by 9.3 percent, the sources added.

 

[Neo]

Pakistan out of default risk ​

ISLAMABAD (September 15 2008): Pakistan is out of any default risk, as reduction in oil prices in the world market and cut in subsidy have provided it much room to manage its foreign liabilities comfortably. This was a message from the Secretary of Economic Affairs Division (EAD), Furrukh Qayyum, for economists who met here the other day.

The Planning Commission had convened the economists' meeting for taking input from government departments for its five-year development plan. EAD Secretary shared, with the participants, that Pakistan was 100 percent in comfortable position to meet in time its foreign liabilities, and there was no risk of default at any stage. Finance Secretary Dr Waqar Masood, SBP Governor Dr Shamshad Akhtar, Petroleum Secretary Incharge GA Sabri, Secretary Industries Shahab Khawaja and Secretary Food and Agriculture, and Wapda chairman gave presentations at the meeting on their respective ministries' issues/challenges and future plans.

Dr Waqar Masood told the participants that Finance Ministry was following a multi-pronged strategy to save every possible penny by cutting down non-developmental expenditure and removing distortions in economy that pushed Pakistan's economy into the grey area during the last few years.

Petroleum Secretary Incharge GA Sabri told the economists that unprecedented rise in oil prices in the global market had exposed Pakistan's economy to serious risks. However, with sharp decline in crude oil prices, things were now shaping up for improvement.

Wapda chairman briefed the panel on power crisis. He said that the government was doing its level best for the new power generation projects to materialise to overcome loadshedding. He said the government was focusing on hydel and coal-based power projects to get comparatively cheaper electricity for the consumers.

The State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar made a stunning disclosure. She said the Shaukat Aziz government had kept her in 'custody' for stopping from voicing concern over Pakistan's deteriorating economy.

"In Previous (Shaukat Aziz) regime, I was not allowed to meet the people to let them know the real economic condition. Now those who are at the helm of the affairs do listen to me and also give weightage to my opinion" she said.

She briefed the panel about SBP's policies for implementation of the monetary policy. She also had a message for the government that it should minimise borrowing from SBP and live on own resources.

Akhtar had been known for giving this kind of statements at different forums, asking the government not to exceed budgetary limit for borrowing from SBP, but she for the first time accused Shaukat Aziz government of keeping her in 'custody' when she wanted to voice concern over Pakistan's weakening economy.

 

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Pakistan may follow 'shadow programme' ​

ISLAMABAD (September 15 2008): The deteriorating economic fundamentals might force Pakistan to follow the International Monetary Fund (IMF) 'shadow programme' under which the country would follow the IMF policy without taking financial assistance.

This was stated by two prominent economists who are members of the Economic Advisory Committee (EAC) and the panel of economists formed by the Planning Commission (PC).

They said it is too early to predict anything precise about the course of action to be proposed by the two teams for 'Macro-Economic Stabilisation Plan'. "However, it looks to be almost certain that Pakistan would follow the Fund's policy in one way or the other," they stated.

If Pakistan enters into this programme, which looks imminent, then the government would have to follow the IMF instructions or conditionalities without taking any financial assistance. The options for the country, they said, are limited in the context of increasing budget and trade deficits.

President Asif Ali Zardari, in his maiden media interaction after taking oath as president, said that Pakistan would not seek an assistance package from the IMF. He said the government will go for austerity measures to cut down the expenditure.

However, economic analysts are of the view that Pakistan's re-entry in IMF programme would help gain the investors' confidence as the country is in the dire need of foreign investment and curtailing the capital flight from the country.

The PC's panel of economists has started its work. This work would be integrated with that of the EAC and final report would be submitted to the government most likely by the end of this month or early next month.

The first and foremost task of the PC panel of economists is to frame terms of reference (TORs). This task is going to be finalised in a week time. Following this, some working groups would be formed and TORs will be framed for each group.

Groups on growth, social protection, institutional framework, and micro economy will be formed, said a member. He was of the view that EAC and PC panel of economists will also look into each other work before submitting the Economic Stabilisation Plan. He also opined that political stability is must for the economic stability.

"We hope that political stability will come to the country after the presidential election," he said. Since the transition is over, the central government needs not to take any ill-conceived measure in any province, especially in Punjab that could spark a wave of political instability. The PC has already constituted task forces on energy, food, infrastructure, and social sector to recommend necessary measures to the commission, they said.

 

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Five-year policy framework: IMF analysing economic statistics​

ISLAMABAD (September 15 2008): The International Monetary Fund (IMF) team has started analysis of Pakistan's economic statistics submitted by the finance ministry before assisting the government in finalisation of new five-year macroeconomic policy framework, informed sources told Business Recorder here on Sunday.

The IMF delegation, which arrived in Islamabad on September 12, will submit its recommendations by September 24 before leaving for Washington. "This is a beginning; the IMF has just started examination of economic data. We will enter into policy mode after September 18," the sources added. Asked if the IMF delegation will dictate about economic policies of present government, the sources said that Fund's delegation was here to assist Pakistan and not to dictate it. "Pakistan has drafted a new five-year macroeconomic policy framework, which will be reviewed by the IMF team," the sources added.

Sources said the IMF team will examine what steps the government has suggested to deal with economic crisis and what are shortcomings in proposed policy measures.

"They (IMF team members) will look into the targets fixed by the government along with policy measures to achieve those targets," the sources added. Sources said that IMF will also suggest actions to improve the proposed macroeconomic policy framework after completing analysis of performance of every sector.

Recently, Prime Minister Syed Yousuf Raza Gilani had attributed the increase in oil and electricity prices to the IMF and the World Bank. On the other hand, World Bank President Robert B. Zoellick had grilled Pakistan's economic team headed by the Prime Minister Special Assistant on Economic Affairs Hina Rabbani Khar for presenting exaggerated statistics of the country's economy to seek project and program loans.

Hina Khar was part of the official delegation accompanying Prime Minister Syed Yousuf Raza Gilani during his much talked about visit to the United States. The economic team, which met the World Bank president, comprising former Secretary Finance, Furrukh Qayyum and Jeved Talat, Pakistan Executive Director to the World Bank.

"Zoellick was very harsh with Pakistan's delegation for reportedly presenting a picture of the economy which was far away from the reality," the sources added. However, The IMF team visiting Islamabad is said to be cool and not using pressure tactics as was used in the past, said another official.