Pakistan Economy - News & Updates - Archive

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http://www.dailytimes.com.pk/default.asp?page=2006\06\15\story_15-6-2006_pg1_3

Thursday, June 15, 2006

ISLAMABAD: The government has decided that it will pay for the education up to age 18 of single-child families, Population Minister Chaudhry Shahbaz Hussain told a PTVprogramme on Wednesday. Shahbaz said that the budget offered a lot of incentives for the parents who followed the population welfare policies of the government. He said he would visit the Northern Areas, AJK and FATA from July 15 to make the ongoing population welfare campaign more effective and result-oriented. He said that the government had a political commitment to control population and provide a better standard of living, adding that the high population growth was seriously affecting government efforts to provide people with health cover, education, housing, jobs and foodstuff. He said the government was committed to bridging the gap between resources and the population. “We should educate and teach people that a small family can prosper in a better way.”

http://www.dailytimes.com.pk/defaul...15-6-2006_pg1_3

 

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Thursday, June 15, 2006

KARACHI: The trade volume between Pakistan and India moved to $ 835 million in 2004-05 from $ 476 million in 2003-04 because of recent thaw in the relations.

According to a press release of Karachi Chamber of Commerce and Industry (KCCI) on Wednesday it said, “India and Pakistan are the biggest economies in South Asian region, but unfortunately, the vast bilateral trade potential could not be actualized, which is benefiting the third countries and vested interest”.

During visit of a delegation of South Asia Free Media Association (SAFMA) to KCCI it suggested the trade between two countries through third country or illegal channels is still much bigger and is estimated at $ 3 billion annually.

The data shared by leaders of business community of Karachi, suggests that with the elimination of non-tariff barriers and reduction in customs tariff, there would be manifold increase in legal trade.

“The recorded trade between India and Pakistan is low side, but several tariff and non-barriers are major impediments in growth in bilateral trade,” it stated.

Pakistan mainly exports fruits, vegetables, crude vegetables materials, cotton yarn and fabrics with the addition of petroleum products in recent times while the imports from India are chemicals, dyes, iron ore, steel products, tyres and tubes, cotton, spices etc.

It said Pakistan can export with advantages to vast SAFTA market products such as textile, leather, surgical instruments, processed food and agricultural products to meet regional shortfalls. The business community opines that liberalizing the visa restrictions would facilitate the opportunities for cross border investment, joint ventures as well as technology transfer and upgradation.

Identifying various bottlenecks in bilateral trade between the two countries, according to press release there are bright prospects for collaboration in different sectors of economy, but it would be possible only through the promotion of regional trade.

The volume of trade between SAARC countries, disappointedly is just around five percent while in the case of ASEAN and European Union, it stands at 25 percent and 70 percent respectively.

High hopes were pinned in SAARC accord, but unfortunately, it has not yet achieved the prospects and benefits, which were expected from this agreement. There is a vital scope for joint ventures between India and Pakistan, which ultimately would lead to expansion of two-way trade. It will be in mutual interest of the two countries to complement each other in the textile sector, instead of being competitors with each other.

 

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Thursday, June 15, 2006

* Says Sino-Pak agreement on free trade will be finalised this year

SHANGHAI: Pakistan can be an energy corridor for China and it wants the Iran-Pakistan-India (IPI) gas pipeline extended up to China, President General Pervez Musharraf told a group of Chinese traders during a meeting on Wednesday.

“The Sino-Pak agreement on free trade will be finalised this year,” Musharraf said, noting that the Karakorum Highway linking Pakistan and China could help boost trade between the two countries. He proposed a rail track along the Karakorum Highway to enhance trade between Pakistan and China. He said that Pakistan was setting up modern industrial parks in its major cities, and invited Chinese investors to these parks.

Talking to a delegation of the Chinese Industry and Trade Federation, President Musharraf asked the private sector to come forward to enhance trade and investment between the two countries.

Addressing Chinese think tanks at the Shanghai Institute of International Studies, President Musharraf called for the promotion of a strong system for the United Nations, resolution of longstanding political conflicts and sustained efforts against terrorism and extremism. He said that concerted efforts were needed to end conflicts in Kashmir, Palestine, Iraq and Afghanistan and the Iranian nuclear crisis. He urged six-party talks on North Korea.

President Musharraf said that Islamabad was doing all it could for the political and economic rehabilitation of Afghanistan. He said that Pakistan was engaged in dialogue with India and its success depended on “sincerity, flexibility and courage from both sides”.

Later in an interview to Russia’s official news agency Itar-Tass, President Musharraf underlined the need for enhanced Islamabad-Moscow cooperation against terrorism.

President Musharraf said that it was important to find out the causes of terrorism and extremism. “The military approach cannot become the absolute solution to the phenomenon of terrorism,” he said. “No one must be misled into thinking that all problems can be solved by force.”

“Regrettably, our counteraction to terrorism now boils down to fighting its consequences,” he said, adding that the root causes of the problem lie “in political differences into which Muslims are drawn in Kashmir, Bosnia, Kosovo, Iraq and Afghanistan”.

President Musharraf will attend the Shanghai Cooperation Organisation (SCO) summit, where Pakistan has observer status, today (Thursday). He is also expected to meet the heads of SCO member states on the sidelines of the summit.

http://www.dailytimes.com.pk/defaul...15-6-2006_pg1_1

 

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ISLAMABAD (June 16 2006): The United States government on Thursday provided $200 million economic assistance for Pakistan's Federal Public Sector Development Programme (PSDP) 2006-07, to finance projects relating to education, health and water.

Under the assistance during 2006-07, US would fund 64 percent of the federal Education budget, 54 percent of the Health and 38 percent of the clean drinking water schemes.

US Ambassador to Pakistan, Ryan C. Crocker and US Agency for International Development (USAID) Director Jonathan Addleton and Minister of State for Economic Affairs Hina Rabbani Khar, and Secretary for Economic Affairs Division Khalid Saeed signed this bilateral agreement.

It is worth mentioning that during President Musharraf's visit to US in June 2003, both Musharraf and Bush reached an agreement that United States will provide Pakistan with $3.0 billion in assistance over the five-year period from 2005-2009.

This support includes $1.5 billion in economic assistance (including this $200 million), and $1.5 billion in military assistance. The agreement is the second of five annual, $200 million instalments of US economic assistance to support Pakistan's investment in human capital.

At the signing ceremony US Ambassador Crocker commented, "This assistance demonstrates the strong support of the American people for Pakistan's efforts to address its development challenges. By providing this funding directly to the Pakistani government budget, as Pakistan has requested, we can ensure maximum impact. The American people are delighted to know that their assistance will be used to finance half of Pakistan's federal budget for education, health and water and sanitation this year."

"The goal of US assistance to Pakistan is to support peace and stability in South Asia over the long term. Continued economic growth and stability in Pakistan creates the conditions for our continued joint success in the fight against terrorism," Crocker added.

The Ambassador remarked "Providing US financial assistance of this magnitude is a vote of confidence in Pakistan's development plans. Eradicating poverty and meeting the social needs of the population are important objectives that our two government share".

Minister of State, Hina Rabbani Khar, added that, "Co-operation between the United States and Pakistan is making both countries stronger. These funds supports the Government of Pakistan's strategic goals in poverty reduction".

The education funds will make a difference by building schools, providing scholarships and training teachers. Health programmes will fight communicable disease, train and equip midwives and improve child health. Clean water assistance will benefit people throughout Pakistan.

 

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ISLAMABAD (June 16 2006): Prime Minister Shaukat Aziz on Thursday assured the currency would not be devalued and promised more concessions for the agricultural sector in coming years. While addressing the National Assembly, the Prime Minster said the present government had paid special attention to the development of agricultural sector and would continue to do so in future.

He said due to sustainable economic policies of the present government, there was no room for devaluation of the currency. Referring to the October 8 earthquake and international oil prices, he said availability of over $13 billion foreign exchange reserves and sustainable policies of the government were major factors, which helped in overcoming these shocks without devaluation of currency.

The Prime Minister said his government has presented a pro-poor budget and counted incentives given to lower classes, including increment in salaries, pensions, allowances, subsidies on kitchen items, increase in the marriage allowance, etc.

The Khushal Pakistan Programme (KPP), he said, has direct link with the poor, particularly the rural population, which would address basic problems of water, electricity, sanitation, health and education. He said about 58 percent KPP funds were being spent in Balochistan, saying it was its right due to its backwardness.

The government would provide electricity to 13,000 villages during the current year which, he said, had not been provided during the whole decade of 90s. He again reiterated the present government has broken the begging bowl.

Due to the pragmatic economic policies, international community, including US, European Union and Arab countries invested in Pakistan investment bonds for next 30 years, he informed.

We even turned down the offer made by the International Monetary Fund for $350 million loan for the earthquake reconstruction, he said and added we would not mortgage the country and its sovereignty against any loan for which the present government enacted the "Fiscal Responsibility Law", under which loan would be taken after approval of the parliament.

He said defence should be the top priority of the government and it would not curtail its budget, as nations with weak defence capabilities can not survive.

Earlier, Pakistan Muslim League (PML) president Chaudhry Shujaat Hussain informed the house the President's uniform and election issue would be resolved according to the Constitution. He said his party has done a lot to bring a sustainable democracy in the country.

He further said his party wanted to form a national government by involving all political parties in 2002, since not a single party had achieved majority, but, he said, the idea was rejected by Pakistan Peoples' Party and MMA.

He said his party also offered deputy prime minister's slot to Maulana Fazlur Rehman and Makhdoom Amin Fahim with Senate chairmanship, but they did not accept the offer.

 

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SHANGHAI (June 16 2006): President General Pervez Musharraf on Thursday underscored Pakistan's strong credentials for securing full membership of the Shanghai Co-operation Organisation (SCO) and said the country is most suitably positioned to contribute to realising the SCO objectives.

He stated in his address at the 6th summit meeting of the SCO that Pakistan is prepared to work closely with this important regional organisation and contribute constructively toward its goals.

Strongly pleading Pakistan's genuine desire to associate itself with the SCO, the President referred to Pakistan's importance in geo-political, geo-strategic and geo-economic terms for playing an effective role as per its charter.

Amidst the gathering of state leaders from China, Russia and four Central Asian states - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan - as well as Iran, Afghanistan and Mongolia, Musharraf highlighted the leading role that Pakistan has been playing in recent years for peace and development.

Pakistan, he said, would strengthen SCO's endeavours toward peace, security and overall harmony in the region. Besides playing a critical role in countering terrorism and extremism, Pakistan could also contribute effectively against drug and arms trafficking.

The President also saw Pakistan's contributory role in the social sector toward promoting education, tourism and cultural exchanges leading to enhanced people to people contact.

While hoping examination of Pakistan's case for full membership positively, the President suggested firming up more substantive participation of observer states in the SCO processes. Arguing for full membership, the President further said, Pakistan is most suitably positioned to promote the interests of the SCO.

"Pakistan provides the natural link between the SCO states to connect the Eurasian heartland with the Arabian Sea and South Asia. "We offer the critical overland routes and connectivity for mutually beneficial trade and energy transactions intra-regionally and inter-regionally," he pointed out.

The President noted the SCO represents hopes and aspirations of a quarter of humanity. "It has the potential to emerge as a most potent force of stability in the region," he said, adding he has no doubt that in the years to come, the SCO would make further progress in diverse fields, particularly security and development in the Eurasian region.

Pakistan with its strong commitment to SCO charter, principles and purposes would spare no effort to promote objectives espoused by the organisation. While expressing feelings of friendship with the SCO member countries, President Musharraf also spoke about the existing deep-rooted Sino-Pak friendship, saying: "We greatly values and cherish this long relationship."

 

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MOSCOW (June 16 2006): Russia's gas monopoly Gazprom is prepared to take part in a pipeline project to link Iran's reserves to the growing Indian market, Russian news agencies quoted President Vladimir Putin as saying on Thursday. Putin said state-controlled Gazprom's role could include attracting finance for the gas pipeline, which would pass through Pakistan.

The project has been under discussion for over a decade but progress has been slow. "Gazprom is ready to participate, including in terms of financing, in implementing this project, especially as a project like this can pay for itself," Itar-Tass news agency quoted Putin as saying in Shanghai.

 

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ISLAMABAD (June 16 2006): The government on Thursday claimed that the country is poised to attract the highest ever 36 billion dollars investment in diverse fields during next five years.

Minister of State for Privatisation and Investment Umar Ahmad Ghumman said the planned investment includes the London Taxi (black cabs), equipped with modern gadgets like satellite tracking, which will be plying on roads of Karachi, Lahore and Islamabad by next month.

The minister when told admitted that the London Taxi International (LTI) was shrinking its business in the UK due to heavy costs. The government has allowed duty-free import of 300 taxis (CBUs), while the Prime Transport Limited, a company owned by a US-based Pakistani, will invest one billion dollars for setting up an assembly plant of LTI at Gharo, Sindh, he told a press conference.

Minister of State for Foreign Affairs Khusro Bakhtiar, State Minister for Finance Omar Ayub Khan, State Minister for Environment Malik Amin Aslam, MNAs Donia Aziz and Waqas Akram were also present on the occasion.

Ghumman said that President General Pervez Musharraf will inaugurate the London Taxi terminal at Karachi Airport by the end of next month, while Prime Minister Shaukat Aziz will perform the ground-breaking of LTI assembly plant, for which 300 acres of land has already been allocated.

He said the company would offer affordable fare package (Rs 11.20 per kilometre), adding that LTI plant would assemble 18,000 taxicabs annually out of which 9000 would be exported.

The export of 9000 taxis will fetch around $2.8 billion every year, Ghumman said and added that 2400cc (2.4 litres diesel engine) London Taxi which is priced at 42,000 pounds in UK will be available at around 20,000 pounds in Pakistan.

The minister said that Dubai World (DW) of the UAE, Daimler Chrysler, Dubai Islamic Bank, and certain other organisations of international repute would also invest in Pakistan.

DW will construct new modern cities at Clifton, Sandspit, Manora, Hawks Bay and Cape Monte in Karachi with the investment of $15 billion, he said.

It will also build housing units in Lahore and Islamabad which will not only help overcome the six million shortfall in the country but will also put a check on the property prices, Ghumman added.

The State Minister for Privatisation and Investment said Daimler Chrysler would establish its assembly plant near Sheikhupura for the production of Mercedes-Benz trucks, buses and cars. Ghuman said Volkswagen, Renault and Jetta would set up their car manufacturing plants in Pakistan with billions of dollar investment.

 

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SIALKOT (June 16 2006): Under Vision-2010, a fast track has been prepared to increase export volume of Silakot's surgical industry. This was stated by Surgical Instrument Manufacturers Association of Pakistan (Sima) Chairman Naeem Anwar Qureshi, while talking to newsmen here on Thursday.

He said under "Surgical Instrument Cluster Developing Vision 2010", adequate efforts would be made for increasing export volume of surgical instrument from 180 million dollars to 500 million dollars annually.

The surgical industry would work on a specific "road map" as identified in the Vision-2010 for overcoming the multifarious problems being faced by the industry, he said.

Naeem Anwar said that implementation of Vision-2010 would certainly help address the chronic problems being faced by the industry as well as help bring out the industry of "price war". Under the said programme, efforts would be made for setting up "Surgical Training Institute" for producing maximum trained and skilled workforce for the industry, he disclosed.

Naeem said that extra-ordinary efforts would be made for setting up a common facility centre and upgradation of Metal Industry Development Centre for facilitating the surgical industry, and added that in the absence of surgical training school, the industry was suffering adversely because of non-availability of trade and skilled force. He pledged that with the consultation of the members of the Sima, collective effort would be made for developing a cluster park for the surgical industry.

The Sima would play its pivotal role to help boost the export of surgical instruments and track the industry on modern manufacturing lines, he vowed. The Sima Chairman said that before implementing the Vision-2010, priorities would be fixed for initiating the mission in surgical industry.

Naeem was confident that the implementation of Vision-2010 would surely help in bringing out the industry from multifarious problems and would be supportive for tracking it on modern lines.

 

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Daimler-Chrysler to invest $5.8bn


ISLAMABAD, June 15: Daimler-Chrysler and Coastal Group has decided to invest $5.85 billion in Pakistan by starting production of Mercedes-Benz trucks, both commercial and military, buses and Mercedes cars of various types to create a vendor industry.

The group would set up their plant on 1,200 acres of land near Shaikhupura provided by the government. The investment would create 5,000 jobs directly and indirectly, said Umar Ahmed Ghumman, minister of state for Privatisation and Investment and chairman Board of Investment (BoI) at a news conference at the Parliament House here on Thursday.

Coastal Group would make all the financial investment in the project, while Daimler-Chrysler would provide technology transfer.

It is to mention here that on May 7, 1998 two of the world's leading car manufactures, the German Daimler-Benz AG and the USA-based Chrysler Corporation, announced the largest industrial merger in history. The new company, called Daimler-Chrysler, became the world's fifth largest car maker with combined revenues of around $130 billion, a combined operating profit of around $7 billion, and a combined workforce of more than 420,000 employees.

The minister said the group would export products to neighbouring countries as well as to the Gulf region, which would earn billions of dollars in foreign exchange for Pakistan. A training institute conforming to the international standards would also be established in Pakistan to update the technical knowledge in the country.

An industrial estate for vendor industry would also be set up to locally produce spare parts as per European standards for local and export purposes, Mr Ghumman said.

Black cabs: Responding to a question about the reported violation of rules in import of black cabs from the United Kingdom, Mr Ghumman said: "We are importing duty-free 300 black cabs for testing purposes. The government had to give this facility in order to invite $1 billion investment from Prime Transport Limited to assemble, manufacture and operate London taxis in Pakistan under joint venture partnership with LTI of UK and ST Electronics of Singapore."

The minister said 150 of the black cabs would be tested in Karachi, 100 in Lahore and 50 in Islamabad so that to keep in mind the local conditions while manufacturing the cabs locally. He said no rules of the Public Procurement Regulatory Authority (PPRA) had been violated as the matter did not involve any investment by the government and the investment did not create any scam.

"I have no personal connection with the person who has invested the money. He is a Pakistani and his name is Dawood Khan. He belongs to Karachi. He wanted to introduce a secure and safe taxi system in Pakistan after a 15-year-old girl from his family was raped and killed by a taxi driver," he said.

The minister said no one was ready to provide such an investment for the purpose-built black cabs, but still, “we invited the tenders through various newspapers to ensure transparency," he added.

The minister said that as per the agreement, the London taxis would charge Rs11 per km which was reasonable. To a question, he said the manufacturing plant of black cabs was being set up in Gharo, near Karachi on 300 acres. The plant had to be shifted to Pakistan because the manufacturing of a single black cab required 43,000 sterling pounds in the UK compared to the 22,000 sterling pounds in Pakistan.

He said the government wanted to change the culture of taxis in Pakistan by revolutionising, introducing and implementing the most economical, dependable, comfortable and safe satellite-controlled taxi service in the country.

http://www.dawn.com/2006/06/16/ebr2.htm

 

[Owais]

Historic raise in workers' remittances in May


KARACHI (June 17 2006): Workers' remittances registered the highest ever increase in Pakistan's history when a record amount of $506.57 million was remitted by the overseas Pakistanis in May, 2006 as against $358.30 million received during the same month of the last fiscal year depicting an impressive increase of $148.27 million or 41.38 per cent.

Pakistani workers have remitted $313.14 million, $348.41 million, $341.10 million, $372.50 million, $308.81 million, $371.24 million, $391.32 million, $358.13 million, $423.56 million and $401.47 million in July, August, September, October, November & December, 2005 and January, February, March & April, 2006 respectively.

During 11 months of the current fiscal year (July 2005 - May, 2006), Pakistan received an amount of $4,136.25 million as workers' remittances as against $3,809.81 million received in the corresponding period of the last fiscal year registering an increase of $326.44 million or 8.57 per cent. The amount of $4,136.25 million includes $11.10 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The inflow of remittances during 11 months of the current fiscal year from USA, Saudia Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,119.34 million, $670.93 million, $635.54 million, $537.39 million, $400.00 million and $109.92 million respectively as compared to $1,184.93 million, $567.54 million, $652.11 million, $471.85 million, $338.21 million and $92.26 million during the corresponding period of the last fiscal year.

Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during July 2005 - May 2006 amounted to $652.03 million as compared to $487.76 million in the corresponding period of the last fiscal year.

The monthly average remittances for the period July 2005 - May 2006 comes out to $376.02 million as compared to $346.35 million during the same period of the last fiscal year.

The inflow of remittances into Pakistan from almost all countries of the world increased last month as compared to May 2005.

According to the break up, Pakistan received workers remittances during May, 2006 from USA ($124.56 million), Saudi Arabia ($86.29 million), UAE ($79.70 million), GCC countries including Bahrain, Kuwait, Qatar and Oman ($60.09 million), UK ($53.60 million) and EU countries ($12.86 million) as compared to the corresponding receipts from the respective countries during the same month of the last fiscal year ie $108.71 million, $61.32 million, $71.24 million, $45.90 million, $28.22 million and $9.01 million. Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during May 2006 amounted to $89.18 million as compared to $30.49 million during the same month of the last fiscal year.

 

[Owais]

Pakistan and China vow to boost strategic partnership


SHANGHAI (June 17 2006): President General Pervez Musharraf and his Chinese counterpart Hu Jintao held an hour-long meeting here on Friday and reaffirmed their resolve to strengthen the existing partnership in its all dimensions, particularly in the economic sector.

Both the leaders agreed to continue co-ordinating their stated position on the regional and international issues at the UN and other levels, to serve the common interests of their people.

Expressing satisfaction over the pace of progress of their bilateral co-operation in the economic sector, they hoped that the negotiations between the two countries on the free trade agreement would be completed soon.

President Hu Jintao said his country agreed to work together to develop Pakistan as energy corridor through the Gwadar seaport. The Chinese President offered to enhance his country's support for undertaking reconstruction work in the areas that were hit by the devastating earthquake in Pakistan last year.

China is prepared to help in the construction of hospitals and schools in the affected region, he added. President Hu Jintao welcomed President Musharraf for the second time after a meeting early this year during the visit by the Pakistani leader to Beijing in February.

"I have great pleasure in receiving you again after four months," said the Chinese leader, adding that President Musharraf's presence at the SCO meeting was testimony to Pakistan's active participation in the regional grouping and a big support to China.

"We highly appreciate Pakistan's efforts for promotion of peace and development," he added. The Pakistani leader thanked his Chinese counterpart for supporting Pakistan in getting observer status on the six-nation grouping that comprises China, Russia, four Central Asian States, besides Iran, India and Mongolia as three other observer countries.

He sought China's support for Pakistan to become a full member of the regional grouping. President Musharraf noted with absolute satisfaction over the overall development of bilateral relations and interaction between the two countries at regional and international forums.

He expressed his strong hope that the strategic partnership between the time-tested allies would keep growing with the passage of time. Later, Chinese Foreign Minister Li Zhaoxing, while talking to APP, described the meeting as very successful and productive.

"It was a very successful and productive meeting to further enhance understanding and co-operation on wide-ranging issues of bilateral interests," the Foreign Minister said. He said, it was always great for the two countries to have interaction at the top level.

The two leaders met for the second time this year after President Musharraf's February visit to China during which the two countries signed about 12 accords and memorandum of understanding (MoUs), including the general framework agreement for expanding co-operation in the energy sector. The meeting assumed a special significance as the two countries are celebrating 55 years of establishment of their diplomatic relations.

Federal Information Minister Muhammad Ali Durrani, Co-ordination Minister Salim Saifullah Khan, Deputy Chairman Planning Commission Akram Sheikh, Chairman Export Promotion Bureau Tariq Ikram, Governor State Bank Shamshad Akhtar, Foreign Secretary Riaz Muhammad Khan and Pakistan's ambassador to China Salman Bashir accompanied the President during the meeting, held at the state guest house

 

[Owais]

World Bank hires consultant for Tajik-Pak power line project
RECORDER REPORT


ISLAMABAD (June 17 2006): The World Bank (WB) has hired the services of Harvey Salgo, an international consultant, to prepare technical, financial, social, environment and legal studies for transmission of 1000 MW electricity from Tajikistan to Pakistan, via Afghanistan, sources in Wapda told Business Recorder here on Friday.

Harvey Salgo is an economist and attorney, with over 25 years experience in energy industry, including power sector legislation and regulation, privatisation and finance, supply- and demand-side planning, procurement, competitive bidding, and contracts.

He has substantial international experience as a long-term advisor to the World Bank and others in developing countries such as India, Montenegro, Zimbabwe, and Ukraine regarding power sector reform, privatization, and market transformation.

"WB has engaged Harvey Salgo, one of the international consultant, with rich experience in regional electricity trade to lay 900-km transmission line for materialising 1000 MW electricity from Tajikistan to Pakistan," sources said.

They said that international financial institutions (IFIs) have not only nominated the World Bank as focal institution but also agreed to finance the expert consultant and set the deadline of June 15 to hire the services of the consultant.

The hiring of the consultant was a follow-up of the two-day energy Central Asia and South Asia electricity trade conference on May 8-9 in Islamabad mainly sponsored by US State Department, United States Energy Association (USEA), World Bank, Asian Development Bank, Islamic Development Bank, International Finance Corporation and private sector organisations like Rao, UES and AES.

Sources said that the World Bank had communicated the name of the consultant to GoP and other stakeholders within the deadline for formally taking their approval.

The countries participating in the project had formed a working group, comprising Shabbir Chaudhary, CEO, NTDC (Pakistan), Sulimonov Akram Rahimovich, Deputy Minister of Energy and Saidov Siroziddin, Deputy Chairman of Barki, Tajik (Tajikistan), Engineer Ghulam Rabani, Advisor Ministry of Energy and Water, Afghanistan and Ilias Dadarov, Head of National Grid Company, Kyrgyz Republic to materialise the project for which the US was very keen and considering it as alternative to Pak-Iran gas pipeline.

The Tajik transmission line would be routed through Pul-e-Khumri (Jalalabad) via Kabul to Pakistan. The official statement, which was changed several times on the insistence of the donors and participating countries, said that the conference deliberated upon the demand-supply situation, infrastructure needed for transmission of electricity from Central Asian to South Asian states, commercial arrangements, elements of electricity pricing, financing structure, possible risks and risk management.

The conference also agreed that surplus power from Kyrgyz Republic could also be transmitted through this line by suitable interconnections, but the proposal would be finalised after completion of Tajikistan-Pakistan electricity trade talks.

Sources said that Pakistan is likely to convey its consent to the World Bank in a couple of days for further action, but did not give the details of the fee to be paid to the consultant.

 

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Trade Policy may be announced on July 19: $19 billion export target likely



ISLAMBAD (June 17 2006): Commerce Minister Humayun Akhtar is likely to announce the 'Trade Policy 2006-07' on July 19, with more or less $19 billion export target. Sources told Business Recorder that Commerce Ministry officials were fully engaged in giving formal shape to proposals received from different trade bodies and associations.

They that the Commerce Minister would discuss the proposals formally and informally with the officials who have been given the task of framing the policy. But officials believe that the trade bodies and associations did not submit any feasible proposal this time, saying that most of the proposals were of "personal nature".

They said that Commerce Ministry officials were making hectic efforts to achieve the export target of $17 billion for the current year (2005-06), but it may not be possible to achieve $2.1 billion exports in one month. They expect $300-400 million shortfall in the target.

Sources said that the government was considering to include 100 more Indian items in the positive list from next fiscal year and also remove anomalies on the proposals of traders.

Trade analysts say that several export-related initiatives announced in 'Trade Policy 2005-06' did not materialise due to one reason or the other. For example, the Commerce Ministry had announced that trade lobbying firms and consultants would be hired to enhance exports and market access in the United States and the European Union (EU).

QuinngillespieAssociates, an American firm, had been hired for lobbying for Free Trade Agreement (FTA), Bilateral Investment Treaty and Trade and Investment Facilitation Agreement (TIFA), which was given a chart of tasks to be completed in one or two years.

However, the name of the marketing company has not been finalised which would be given the task for match-making and procurement of orders for Pakistan exporters in the EU member States, sources said, adding that Pakistan embassy had dispatched the names of three companies, but the matter is still undecided.

It was also announced that retail sale outlets would be established in major importing countries for introducing and exporting high quality and brand-name exports of Pakistan, but no one is ready to act on the scheme.

The Ministry had also promised that steps would be taken to reduce cost of transportation but there was no substantial reduction in freight forwarding.

The scheme of promotion of Pakistani trade marks announced in the policy has not attracted the exporters. In this scheme, it was announced that exporters who registered their trade marks abroad for export purposes would be provided subsidy equal to 50 percent of official registration fee, but none of the exporters was prepared to follow it.

 

[Owais]

Government borrowings stand at 7.07 percent above target



ISLAMABAD (June 17 2006): The State Bank of Pakistan (SBP) on Friday reported that during the period from July 1, 2005, to June 6, 2006, the government's net borrowings for budgetary support stood at Rs 104.927 billion, which was about 7.07 percent above the 2005-06 target of Rs 98 billion. The widening budget deficit is pressing the government to borrow more from the central and scheduled banks for bridging the revenue/expenditures gap.

The deficit, which the government has to finance either from external or internal sources, indicates that in the coming months debt burden may further increase.

The notable point is that during July 1, 2005 to March 4, 2006, the government's borrowing had touched Rs 155.59 billion, which was 58.76 percent higher than FY 2006 limit. Afterwards, it sharply declined, but again started climbing and stood at Rs 104.927 billion on 6,6,06.

However, compared to the same period of last fiscal year, it rose by Rs 46.70 billion (80.21 percent). It should be noted that Pakistan's budget deficit has widened to Rs 201.35 billion (2.70 percent of GDP), up by 0.60 percentage point, in the third quarter (July-March) as compared to Rs 131 billion (2.1 percent of GDP) in the corresponding period of last fiscal year.

Economic experts believe that it would further increase. However, for financial year 2006-07, the government has estimated overall fiscal deficit at Rs 373.5 billion which is equivalent to 4.5 percent of the GDP.

According to the break-up of the data, the central government's net borrowing rose to Rs 126.95 billion between July 1, 2005 and June 6, 2006, from Rs 75.925 billion, borrowed from SBP and commercial banks in corresponding period of last year.

However, the provincial governments retired 22.25 billion rupees during the period under review against Rs 17.70 billion retired during the corresponding period last fiscal year.

The data further shows that the central government borrowed Rs 123.98 billion from SBP as against Rs 172.97 billion last year. From scheduled banks, it had borrowed Rs 2.98 billion against Rs 27.04 billion it retired in corresponding period of last fiscal year. The SBP says that the provincial governments borrowed Rs 224 million from scheduled banks against Rs12.37 billion repaid last fiscal year.

During the period under review, they retired Rs 22.25 billion of the central bank as compared to Rs 5.33 billion borrowed during the same period last fiscal year.