Pakistan Economy - News & Updates - Archive

[Neo]

Plan A & B evaporate: Pakistan recourses to begging bowl​

KARACHI: The country has finally swallowed the bitter pill of recourse to IMF, for stabilising the ailing economy, by almost shelving the oft-repeated Plan A & B.

Finance Adviser, Shaukat Tarin on Saturday announced that IMF would extend $7.6 billion to Pakistan under 23-months loan arrangement at 3.5 to 4.5 percent interest.

The loan is issued under IMF's standby facility, which is designed to help countries address short-term balance of payments problems. Stand-Bys have provided the greatest amount of IMF resources. The length of a SBA is typically 12 to 24 months, and repayment is normally expected within 2 to 4 years.

The official announcement has finally put all the speculation, circulating in the cross-section of the country about the possible financial assistance from the IMF, to rest.

"It proves that government miserably failed to secure financial assistance from avenues other than IMF," suggests the opinions expressed by industrialists, economists and analysts.

An economy considered resilient just one year back collapsed like ninepins and now is compelled to use the IMF option, which is very unpopular amongst the people.

The economists and industry people are also unwilling to buy the argument that the financial assistance of IMF has been secured on our own terms and would not bring with it more miseries for the people at general and industry at particular.

"This can be accepted by only miss-informed people but not by those who have good knowledge of the history of IMF financial programmes for Pakistan and for the other countries of the world," they said. However, at one point most of them agreed that failure to receive any assistance left the economic managers with no other option from international financial institutions and Friends of Pakistan has pushed the government to take this unpopular decision. IMF, which is considered a lender of last resort-proved the same in case of Pakistan, as other "friendly" countries and organisations are willing to assist only by routing it through IMF, economists say. "We still believe that friendly countries are ready to help Pakistan at this critical time, but they are suspicious of the way we have behaved in the past as after every five to ten years we are knocking at their doors to help us financially, economist Dr Asad Saeed noted.

"This can be short-term solution to shore-up the depleting stocks. The long-term solution lies with development of our real sectors and to curtail the unprecedented growth of imports, which are eating up major chunk of precious forex reserves," he strongly contends.

The trade deficit jumped to $20 billion in the last financial year from just $4 billion only four years ago. Although the high international crude and commodities prices have been blamed for this increase in deficit, Saeed also attributed this to unchecked import of luxurious items like food items, garments, cosmetics by the privileged and elite class of the country.

KCCI President, Anjum Nisar also viewed the IMF as the last option in the current circumstances following the months long effort to win some financing from other avenues.

Analyst, Mohammad Sohail at JS Research said that IMF financial assistance would give some breathing space to government, at least in on one front i.e. forex reserves for the time being.

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[Neo]

‘India agrees to compensate for Chenab water’​

LAHORE: India will provide Pakistan 200,000 acre-feet water as compensation for the reduced flow of water in the Chenab River, Federal Minister for Water and Power Raja Pervez Ashraf said on Saturday.

According to a private TV channel, Ashraf told reporters as saying Indian Prime Minister Manmohan Singh had assured Pakistan of providing 200,000 acre-feet water as compensation for the water lost by Pakistan due to India’s construction of Baglihar Dam.

The minister said Bhasha Dam would produce over 4,500MW of electricity helping overcome load shedding. He said the dam would compensate for the expenditure incurred on it within seven years. daily times monitor

 

[Neo]

US investors express keenness in housing, power generation​

ISLAMABAD (November 16 2008): Investors of United States have shown keen interest for making investment in housing sector, and hydel and thermal power units. According to a press release issued by the Board of Investment (BOI) on Saturday, a two-member delegation from US visited the Ministry of Investment and called on Executive Director-General Riaz ul Haq to look into the possibilities of investment in various sectors of the economy.

The delegation comprised Jack Wilkins, Chief Executive Officer of Visionary Industries Inc, and Hamid S Khan, Country Manager, Ultimate Building Systems Inc. Foreign investor expressed interest to invest in the housing sector. In this regard, they have already signed an MOU with the Ministry of Works for the construction of a number of housing units under the Prime Minister's initiative for building one million houses.

They will construct these units in different cities of Pakistan for which funds will he invested from America and they will not raise any loan from the banking industry of Pakistan. Pakistan is facing current shortage of six million houses and needs one million houses every year.

The delegation also expressed interest in hydel and thermal power units to cope up with the electricity shortages. The members of the delegation stated that they have expertise and huge funds available, which can be utilised by Pakistan for the purpose of generating electricity,

Presently, Pakistan electricity shortfall is 5000 MW. It is expected that electricity demand will increase at the rate of 10 percent per annum with the size of economy. It is expected that the government can fill these gaps in demand/supply in both power/housing sectors with the help of such foreign investors. The Ministry of Investment is working aggressively to facilitate such investors, the press release added.-PR

 

[Neo]

Prime Minister for venturing into cargo shipments to India and China​

KARACHI (November 16 2008): Prime Minister Syed Yousuf Raza Gilani has underlined the need for catering to the trade cargo transportation needs of north western India and central China through Pakistani ports. Highlighting geo-strategic importance of the country at the inauguration ceremony of Phase-III Extension at Karachi International Container Terminal on Saturday, he said.

"Our geo-physical attributes make Pakistani ports economical and one of the strongest regional links, whether these are trade routes to India, China or Central Asian Republics." "Pakistan's geographic proximity to the over two billion population of China and India makes Pakistani ports a lucrative recourse," said the premier.

He said the centre of Chinese province of Xinkiang was closer to Karachi than Port of Shanghai. "In the Northwest for the Central Asian Republics Pakistani ports, especially Gwadar can play a major role," he added. Terming development of Phase III as a hallmark, the premier said Karachi Port had graduated from the handling of 2.5 million tons of cargo in 1947to 37 million tons of handling with its two modern container terminals.

He said 10 years ago, the container handling capacity of Karachi Port was little over 0.5 million TEUs, which had now reached over 50 percent of the total container volume of the port. The prime minister lauded M/s Hutchison Group of Companies for working with a public concern and completing the task of Phase-III development works.

He said the design of the new facility had been prepared taking into account the latest future generation technologies in the field of marine transport. Karachi Port Trust, the PM said, had embarked on a number of other development projects, the outcome of which would certainly propel the growth of the country and would lead to a healthy economy. "Our trade priorities envision a diversity of sources for developing new avenues for business and trade. It is incumbent upon our government to pursue the infrastructure development, which shall manifest in building of roads, improved provision of energy, ports, harbours, rail and mass transition," the prime minister said.

The prime minister also lauded KPT's futuristic vision in the face of Pakistan Deep Water Container Port saying that the project would bring this region once again to the forth as a regional hub. The prime minister also lauded the services of workers of both KPT and Port Qasim to handle and deliver massive quantities of much needed wheat and fertiliser at a time of crisis.

The new facility of KICT, which is member of the Hutchison Port Holdings (HPH) Group, is located at Berths 26 and 27 at West Wharf of Karachi Port. KICT now has a total area of 26.03 hectares with a quay length of 973 meters, and offers a yard stacking capacity of 21000 TEUs. The Phase III Extension was initiated in collaboration with KPT to meet growing cargo-handling needs of Karachi Port.

With extensive foreign direct investment, KICT's Phase III Extension involved increasing the depth alongside, enhancing handling capacity by redeveloping additional land adjacent to original facility, and deploying additional quayside and container yard equipment.

With the inauguration of Phase III, KICT operates a total of seven ship-to-shore (STS) gantries, two mobile harbour cranes, 23 TRGs, eight reach stackers, eight empty container handlers, 53 terminal tractors, 75 chassis, four forklifts, 58 reefer plugs capacity and radio data terminals (RDTs) on all terminal equipment.

Earlier, in his address State Minister for Ports and Shipping Sardar Nabeel Gabol lauded KPT and KICT for their efforts to make the country's ports capable of catering to a fast soaring global demand. He also assured support of his side to the port operators. Earlier, KPT Chairperson Nasrin Haque and KICT CEO Anjum Sajjad welcomed the guests and highlighted various aims and achievements of their respective organisations.

 

[Neo]

Call for transfer of technology from India​

MULTAN (November 16 2008): Chairman Pakistan Crop Protection Association, Engineer Javed Saleem Qureshi has said that our production could increase incredibly through mutual trade and transfer of technology between Pakistan and India. He said that if even we compare our agriculture standard with India, we are far behind, whereas the farmers of developing countries are taking maximum advantage from it.

He expressed these views in an interview with Business Recorder after coming back from his 5-day visit to India along a delegation of 8. Qureshi said that our rulers are talking about getting 3 maunds per acre more production, whereas we have the potential to get 30 maunds extra production by adopting the latest technology of agriculture.

He said that we are now getting hardly 28 maunds per acre production whereas in India and the other developing countries are taking about 50 maunds per acre production.

He said that the main hindrances in the better production includes high prices of diesel, electricity, fertiliser, seeds etc whereas in India, the farmer is getting every facility on his door step. India is getting most of its production from barani areas, but here in Pakistan, the cultivation in barani areas is very low.

Javed Qureshi said that the subsidy given by the government gives no benefit to farmers. He blamed that last year the middlemen minted about Rs 35 billion under the subsidy. "If the average production would be more then there would have been no need to give subsidy", he added. He further added that when the farmer would get Rs 20 to 30 thousand extra per month, then he would also purchase DAP.

He appealed to the Prime Minister and Chief Minister Punjab, that they should take out the private sector from the clutches of bureaucracy for the development of agriculture. He said that Prime Minister is himself a farmer and he understands every ups and downs of agriculture.

 

[Neo]

Boosting apple exports from Balochistan​

EDITORIAL (November 16 2008): Now that the Agribusiness Support Fund (ASF) has approved a matching support grant of Rs 0.50 million for the Balochistan Horticulture Co-operative Society (BHCS) as start-up cost for operational expenses of an apple grading plant in Quetta, it may mark the beginning of long due stimulation of that province's agricultural potential in fruits, flowers and vegetables.

Thanks to the active interest of Pakistan Horticulture Development and Export Board (PHDEB), the imported grading plant which was lying non-functional for quite some time, has been revived in collaboration with the Agriculture Department of Balochistan, the Board adding a locally made waxing unit will, hopefully, be able gainfully to process around 6000MT apples per annum, with further addition of a cold storage facility and leasing the outfit to BHCS in order to encourage local apple growers and run it for two to three years initially on experimental basis.

Quoting ASF Chief Executive, Khalid Khan, a report says that the approved ASF grant will help the BHCS meet its initial costs and that once a certain stage of progress is reached the ASF would provide it with further financial assistance towards operational and marketing expenses.

According to Khalid Khan, the grading plant would not only provide good business opportunities to the local trading community, but would also add value to the fruit, which is already grown in abundance in the province, thereby, reducing the post-harvest losses to the minimum level. This should be all the more possible as the BHCS involves medium and large sized apple growers from various parts of Balochistan.

The basic purpose of the initiative being motivation of local business community to develop entrepreneurial skills and utilise the resources available in the province, its prospects of growth should leave little to doubt.

For as it is, aridity of climate and high elevations help Balochistan produce good quality deciduous fruits in a comparatively disease-free environment, apple alone constituting 30 percent of the area under deciduous fruits and 34 percent of its total fruit production, including 220,000 tons of a wide variety of apples per year, the season lasting mid-July to end October.

Again, in the world apple market of around 5 million tonnes per year, with France, Chile, Belgium, USA and Netherlands in the lead, Pakistan also figures prominently among regional competitors - Iran and China. Needless to point out, whatever edge Pakistan has acquired owes little to any tangible effort in the sense of catching up with modern enabling measures until very recently.

First things first, this has reference to the belated formation of the PHED, itself. However, despite the fumbling in its initial years, it got a breakthrough with the launch of $24 million Agribusiness Support Fund (ASF) to develop agribusiness in Pakistan, as part of an ADB Agribusiness Development Project, focusing on enhanced farm productivity and improved marketing.

It goes without saying that improved agribusiness is an essential prerequisite to maintenance and expansion of export markets for agricultural products. Now that mangoes and some other horticulture crops have started benefiting from ASF, there should be every reason to believe that the new thrust will prove instrumental in booting apple exports from Balochistan.

 

[Neo]

IMF Loan to Pakistan May Spur Help From Other Donors​

NOVEMBER 16, 2008
By MATTHEW ROSENBERG

NEW DELHI -- Pakistan's new agreement with the International Monetary Fund over a $7.6 billion loan may lead to more help from other donors and is expected, at least for now, to stave off economic collapse in the South Asian nation.

But the IMF's package falls well short of the $10 billion to $15 billion that Pakistani officials have said they need over the next two years to fix the economy. Some of that shortfall will be made up by loans from the World Bank and Asian Development Bank. Islamabad hopes the rest will come from the so-called Friends of Democratic Pakistan, a group of allies such as the U.S., China, European powers and Saudi Arabia that is holding a meeting Monday.

Pakistani and IMF officials said Saturday that the international lending agency had reached a deal for a financial stabilization package, and that Islamabad would make a formal request this week.

The IMF will deliver $4 billion – the amount Pakistan says it needs immediately to avoid defaulting – this year, with the rest to be disbursed in 2009, said Shaukat Tarin, an economic adviser to Pakistan's prime minister, told reporters in Karachi. The annual interest rate on the IMF program will run between 3.51% and 4.51% and Pakistan will start repaying the money in 2011, Mr. Tarin said.

"The outlook for next six months will get better from the present crisis-like situation," said Samiullah Tariq, head of research at Investcapital, a brokerage based in Karachi, Pakistan's financial center.

The IMF loan is likely to boost the confidence among donors and investors who doubted Pakistan's ability to right its economy without the fund's oversight. But it is nonetheless a major reversal for the new government of President Asif Ali Zardari. Officials had repeatedly insisted the IMF was a last resort, and were banking on allies in the West and Asia for a rescue, figuring no one wanted to see an all-out economic collapse in a country at the front line of the war against the Taliban and al Qaeda, said a finance ministry official.

In recent days, however, it became "clear that without the IMF, no one was going to give us the sums we need. There was no trust there," said a finance ministry official.

Most of Pakistan's allies had either publicly or privately pressed Pakistan to seek IMF assistance, and only China had offered any money – Pakistani officials say Beijing has agreed to give a $500-million loan – prior to Saturday's announcement.

The Friends of Democratic Pakistan are holding a meeting of mid-level technical officials in Abu Dhabi on Monday, and "maybe after the meeting there should be some news," said Ashfaque Hassan Khan, a finance ministry official, in a telephone interview from Islamabad.

Following Saturday's announcement, the IMF urged major donors to offer Pakistan additional financing, and a Western diplomat in Islamabad on Sunday praised Pakistan's turn to the IMF, saying: "It should lead to more help." But the diplomat would not say if any firm commitments had been made.

Even if Pakistan gets all the money it needs, it faces a tough economic road. Inflation is running at around 25%, its stock market is down about 35% since the start of the year, the rupee has plunged against the dollar and Pakistan currently has only enough hard cash on hand to cover about two months of imports.

Pakistan has recently taken a host of painful economic measures to lay the groundwork for help from abroad, moves that were praised by the IMF in Saturday's announcement. The State Bank of Pakistan on Wednesday increased interest rates by a hefty two percentage points to 15%, and the government eliminated fuel subsidies earlier this year in a move to sharply cut its deficit.

Write to Matthew Rosenberg at matthew.rosenberg@wsj.com

 

[opinion786]

Foreign Reserves Phenomenon: Shaukat Aziz versus PPP

Written By: Afreen Baig


Foreign Reserves – a significant economic indicator and of vital importance to every expanding economy. Foreign Reserves is the first and basic economic indicator that transmits an air of confidence and trust, amongst the potential foreign & local investors and the nation. Foreign Reserves are held in abundance and accumulated - in order to sustain the confidence of a country’s capacity to carry out external trade confidently, to balance the momentum between demand & supply of foreign currencies, and also used as an intervention tool by the State Bank. Reserves also bail out the economy in times of financial crisis.

By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. His exceptional policies kept our trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.

Pakistan recently has seen a drastic drop in its Reserves by 50% and its currency devalued by 40%, which has left ordinary people confused and the usual cynics have started heaping the blame onto the policies of Mr. Shaukat Aziz, without even knowing the basic macro-economic indicators nor understanding the relationship b/w Foreign reserves, Trade deficit and Currency devaluation.


The Trade deficit (Exports minus Imports) is always managed in ratio to Revenue generation, Capital inflows and Reserves. Almost all developing economies face the dread of trade deficit but their abundant foreign reserves gives them the fiscal space to overcome those grievances.
Illustrating in mathematics for ordinary readers, on October 2007, when PM Shaukat Aziz left us:
Exports - $18 billion

Imports - $30.53 billion

Trade deficit - $12.53 billion

Foreign Reserves - $16.4 billion

What is to be seen above is that, Pakistan’s Foreign Reserves $16.4 bn exceeded the trade deficit $12.53 bn by a comfortable $3.87 billion and with an additional foreign investment of $8.4 billion – Pakistan’s currency stayed stable at Rs.61 per dollar.

Currency starts to devalue ONLY when the Trade deficit surpasses the Foreign Reserves. This rare phenomenon occurred in PPP’s incompetent & dense minded government, which has led to devaluation of the currency by 40%. They failed to protect our Sovereignty - our Foreign Reserves!

In PPP’s inept government of eight months,

Trade deficit - $20.74 billion

Foreign reserves - $8 billion

Under PPP, the Reserves fell from $14 billion to $8 billion and the trade deficit increased from $12.53 billion to $20.74 billion.

The moment the foreign reserves ($8 bn) fell below the trade deficit ($20.74 bn), the currency starts to devalue. Under Mr. Shaukat Aziz, Rupee stayed stable till October 2007, because our Reserves $16.4 billion EXCEEDED our Trade deficit of $12.53 billion.

In 2007, when international oil prices reached an alarming level of $140 per barrel it hurt the Imports bill of many developing countries, by increasing the trade deficit. The experienced Mr. Shaukat Aziz gauged this situation and immediately started monitoring & controlling individual sectors that were importing. He allowed imports only in sectors that were export specific. His efforts resulted in decreasing our Import bill by 6.53% by September 2007 (one month before he left).

Rupee stayed stable throughout Mr. Musharraf’s supported governments. Trade deficit never exceeded the foreign reserves in the last eight years. The results were as follows – a stable rupee:

2001-02: Rs. 61
2002-03: Rs. 57.7
2003-04: Rs. 57.92
2004-05: Rs. 59.66
2005-06: Rs. 60.16
2006-07: Rs. 60.5
2007 (Dec): Rs. 61

What did the inefficient PPP do in these last eight months? They failed to monitor each sector of imports to control them individually. Pakistan’s economy started destabilizing because PPP could not guard our $14 billion reserves. Nor did they utilize any effort to increase the reserves from where Mr. Shaukat Aziz left it at $16.4 billion! The easier way out for them is to beg around the world barefaced or go back to IMF disgracefully.

What did the PPP further do? They increased the import bill by 55% in the months April to June 2008 and again increased it by 52.65% in the months July to September 2008 – though world oil prices fell from $140 per barrel to $70 per barrel.

Flight of capital takes place ONLY in economies where there is lack of trust and faith! Investors and endowing Public do not trust the government of PPP and are wary of PPP’s earlier corrupt reputation.

In the first four months of PPP, around $22 billion were withdrawn from the economy and KSE’s market capitalization fell by $29 billion. The State Bank was forced to place ban on transfer of dollar outside Pakistan.

Foreign reserves get hurt twice in this depletion process. First, when the investors and public pull back their money. Second, when macro-economic indicators witness imbalance and the government is forced to pay their external liabilities through these Reserves. This second stage occurs only when the government loses other means of regular income and is unable to control their imports.

Every country in the world is forced to make Imports. Imports help boost Exports. Even the world exporter China makes an import worth around $954 billion, to further promote their exports. But, Imports should be Export specific – scrutinized and restrained monthly – which was being done under the policies implemented by Mr. Shaukat Aziz.

Let’s analyze the steady India, as an example, with GDP growth of 9%.

Indian Imports - $188 billion (compared to Pakistan’s imports of $40 billion)

Indian Trade deficit - $63 billion (compared to Pakistan’s deficit of $20 billion)

The Indian currency is not devaluing because their Foreign Reserves $308 billion exceed their trade deficit of $63 billion.

Had Mr. Shaukat Aziz continued, the Trade deficit would have been kept controlled in accordance with Pakistan’s Revenue generation, Capital inflows and Foreign Reserves – which would have kept our rupee stable and economy booming at 7% GDP growth.

If Pakistan wishes to remain free from influence of IMF, there is no better option than to assert our economic sovereignty and accumulate Foreign Reserves, which in return will keep our currency stable. Regrettably, PPP lacks the credibility and the reliability to attract back that trust and confidence!



Afreen Baig is an independent analyst majoring in International Relations and Economics. She can be reached at afreenbaig@gmail.com

 

[Neo]

'Friends of Pakistan' pledge support to Islamabad ​

ABU DHABI (November 17, 2008): A group dubbing itself 'Friends of Pakistan' pledged support to the extremism-hit country at a meeting in Abu Dhabi on Monday during which a 'framework' for cooperation was discussed, a top official said. 'It was a very successful meeting, we had (pledges of) unanimous support and solidarity,' Pakistan's additional foreign secretary for South Asia, Aizaz Ahmad Chaudhry, told reporters at the end of the meeting.

"People are interested in finding ways to help," he said, adding that the gathering had "put together a framework" for cooperation in the fields of development, security, energy and institution building.

The meeting of representatives from China, European states, Saudi Arabia, Turkey, the United Arab Emirates and the United States, came two days after Islamabad said it had secured an IMF loan of nearly eight billion dollars.

A Pakistani diplomat told AFP that countries represented at the gathering had not come to pledge donations.

"This is not a donors' club meeting," said Javed Malik, Pakistan's ambassador at large. "This is for galvanising broader support to Pakistan."

Economic support was just one of the issues discussed, in addition to building institutions, supporting Pakistan's democratic government and battling extremism.

"Pakistan played a very important role in fighting terror... that needs to be supported," Malik said.

On Saturday Pakistan announced it will receive a loan of 7.6 billion dollars from the International Monetary Fund.

Islamabad needs approximately 4.5 billion dollars (3.5 billion euros) to deal with a balance of payments crisis that has raised the risk of the violence-hit nation defaulting on its foreign debts.

"The impact of the financial crisis in the world and the difficulties we faced at home impacted gravely, particularly on our foreign exchange reserves which were 16.4 billion dollars in October 2007 and now are less than 7 billion dollars," Shaukat Tarin, top financial adviser to the Pakistani premier, said on Saturday.

 

[Neo]

All subsidies to go; no SBP intervention in foreign exchange market: IMF sets harsh conditions​

ISLAMABAD (November 17 2008): Pakistan will have to withdraw subsidies across the board by the end of the current fiscal year and bar the State Bank of Pakistan (SBP) from intervening in the forex market. These are two major conditionalities the International Monetary Fund (IMF) has placed on Pakistan under its rescue package.

The subsidies in power, gas and petroleum products will be eliminated by the end of this fiscal year, sources told Business Recorder. This is one of the two major conditions put by the IMF prior to approval of loans amounting to $ 7.6 billion as rescue package, sources added. This condition would be much harder if it was applied to agricultural inputs as presently the government provides a subsidy of Rs 32 billion on fertilisers.

The government has not made the IMF conditions public so far. But insiders are of the view that some of the conditions are very harsh and the government will have to burden the people, especially the poor, for meeting the Fund's demands.

The IMF is of the view that Pakistan would have to increase the tax-to-GDP ratio to 15 percent by 2013. This issue, according to sources, is also considered to be harsh in the sense that the government would have to increase indirect taxes, instead of direct taxes. The indirect taxes will, again, hit the people. As a result, the ratio of general sales tax may have to be increased.

However, sources did not say whether the tax-to-GDP ratio would be taken to 15 percent by increasing indirect taxes. They were of the view that the government could improve the tax net by bringing more people under direct taxes.

According to sources, the IMF is also keen that banks' profits should be linked with the inflation rate prevalent in the country. Besides these conditions, the IMF has also asked Pakistan to keep getting loans from SBP, within certain limits. They said that IMF wanted Pakistan not to get loans from the SBP till the conclusion of the IMF programme. However, the government successfully told the IMF that SBP credit could be kept within certain limits, and full ban on the facility would be very hard to meet.

Pakistan has also been asked to bring fiscal deficit to 4.3 percent of the GDP within the current fiscal year. Government circles claim tat these conditionalites are not harsh, and most of them have already been included in the current year's budget. In order to slash its deficits, current account and trade will have to be bridged by withdrawing all subsidies, sources said.

 

[Neo]

Region's biggest oil refinery to be built near Gwadar: minister​

KARACHI (November 17 2008): The people's government is committed to complete the Gwadar deep water port project making the strategic Mekran region the pearl trade and energy corridor for the entire region catering the bulk needs of the landlocked Central Asian countries.

The Minister of State for Ports and Shipping, Nabil Ahmed Gabol, said in a statement on Sunday that the biggest oil refinery and biggest oil storage facility of the region would be constructed near Gwadar besides making the port city of Balochistan the route of the Iran-Pakistan-India gas pipeline project. He hoped that work on the Iran gas pipeline would start soon, after sorting out some of the pending issues.

The minister said that both President Asif Zardari and Prime Minister Gilani would visit Gwadar soon for reviewing all development projects on the spot and issue fresh instructions guiding the officials how to proceed to make Gwadar the real hub of economic activities.

He said that the government would develop Gwadar region the biggest corridor for energy and trade catering the need of the landlocked countries of Central Asia.

Gabol pledged to develop the entire coastal belt from Karachi to Jiwani catering the basic needs of the people who were denied livelihood for the past many decades.

He said that the PPP government would fulfil all its promises and pledges with regard to the Gwadar port and President Zardari had already spelled out government policies on future of Gwadar port when he addressed the Baloch intellectuals at President House earlier last month. He pledged to defend the legitimate interests of the Baloch people in Gwadar conceding their demand for right of control over their resources.

The minister assured the fishermen and other segments of the civil society on the Mekran coast that the government was committed to develop the entire coastal region for the benefit of the indigenous people of Balochistan residing in the coastal region.

Regarding making Gwadar port operational, he said that the government would divert cargo from Karachi port and Port Qasim to make it sustainable giving an incentive to the Singapore Port Authority to implement the second phase of the Port development at Gwadar.

The minister dispelled the impression that the PPP government at the centre or in Balochistan would continue the discriminatory policies of the Musharraf regime, and said that there would be a marked deviation from the old policies and making plans beneficial for the indigenous people only, preferably the local fishermen, including preserving their fishing grounds and barring illegal fishing.

He hoped that both the federal and the provincial governments would join hands in defending the legitimate interests of local fishermen first and later on the people residing in the surrounding human settlements of the Mekran and Lasbela coast.-PR

 

[Neo]

Shahbaz to seek Chinese investment for Punjab​

LAHORE (November 17 2008): 'Pakistan's friendship with China is vital and we should extend the hand of friendship towards Chinese people,' Punjab Chief Minister, Mian Muhammad Shahbaz Sharif said this on Sunday before leaving for a official visit to China.

'I am bound for China to explore the opportunities of Chinese investment in the province and to discuss the matters of technical training with the host,' he said.

Sharing his opinion with newsmen at the airport about electricity generation, he said that coal should be used to generate electricity that would minimise the prevalent power shortage in the country.

'A lot of employment opportunities would emerge if the coal power generation is introduced,' Shahbaz said.

Talking about hydel power generation in the Province, he said that one and half to 20-megawatt production of hydel power exists.

Further, dams could be constructed on upstream of Basha Dam, the CM said adding that it was pitiable that the previous regime wasted a valuable time but could not do anything practically. On a question about extension of cabinet in Punjab he said that a 30-35-member provincial cabinet would not be a burden.

Shahbaz would return to the country after his tour to China on November 22, 2008.

 

[Neo]

US investors express keenness in housing, power generation​

ISLAMABAD (November 16 2008): Investors of United States have shown keen interest for making investment in housing sector, and hydel and thermal power units. According to a press release issued by the Board of Investment (BOI) on Saturday, a two-member delegation from US visited the Ministry of Investment and called on Executive Director-General Riaz ul Haq to look into the possibilities of investment in various sectors of the economy.

The delegation comprised Jack Wilkins, Chief Executive Officer of Visionary Industries Inc, and Hamid S Khan, Country Manager, Ultimate Building Systems Inc. Foreign investor expressed interest to invest in the housing sector. In this regard, they have already signed an MOU with the Ministry of Works for the construction of a number of housing units under the Prime Minister's initiative for building one million houses.

They will construct these units in different cities of Pakistan for which funds will he invested from America and they will not raise any loan from the banking industry of Pakistan. Pakistan is facing current shortage of six million houses and needs one million houses every year.

The delegation also expressed interest in hydel and thermal power units to cope up with the electricity shortages. The members of the delegation stated that they have expertise and huge funds available, which can be utilised by Pakistan for the purpose of generating electricity,

Presently, Pakistan electricity shortfall is 5000 MW. It is expected that electricity demand will increase at the rate of 10 percent per annum with the size of economy. It is expected that the government can fill these gaps in demand/supply in both power/housing sectors with the help of such foreign investors. The Ministry of Investment is working aggressively to facilitate such investors, the press release added.-PR

 

[Neo]

Restoration of investor confidence vital to economy​

KARACHI (November 16 2008): Speakers at an investment forum said that the nation would come out of depression and successfully put the economy at right track. However, they said, restoration of investors and general public confidence is necessary for economic revival. The one day investment forum on "Investing in Change: Pakistan and World" was organised by BMA Funds at a local hotel here on Saturday.

Speaking on this occasion, former Governor of State Bank of Pakistan (SBP) and Director of Institute of Business Administration (IBA) Dr Ishrat Hussain said that Pakistan should go to IMF without wasting time. He said that Pakistan had a growth rate of 1.8 per cent in 2000, when it entered into IMF programme. After entering into IMF program the country achieved an average GDP growth of seven per cent.

The IMF programme helped country back on track and Pakistan established access to international markets. Pakistan also launched European Bond and Islamic Sukuk. According to him the poverty reduced to 25 per cent from 33 per cent and the unemployment rate slashed to 6.2 per cent from 8.5 in the same period after entering into the IMF programme.

He said that increase in discount rate is one of the measure to control inflation. He was of the view that government should not borrow from the central bank. S. Ali Raza, President, National Bank of Pakistan (NBP), said that the banking system in the country is standing on strong footing.

Tariq Iqbal Khan, Chairman NIT, said that the investment are always made on expectations of good returns. Waqar A. Malik, President, OICCI; Farrukh H. Khan, CEO, BMA Capital; Muddassar Malik, CEO, BMA Fund; Tawfiq A. Hussain, President, Samba Bank and others also spoke on this occasion.

 

[Neo]

Businessmen urged to set up new industrial units​

LAHORE (November 16 2008): The anti-industry regulatory framework has kept the potential investors away who could have established new industry in the country but they opted investment in real estate, capital market or other sort of businesses for short-term gains.

"Unfortunately our economic managers have not right approach to accelerate industrialisation without which Pakistan can not survive in the longer run", said Engineering Consultant and Founding Chairman of the Pak-China Economic Relations Standing Committee of the Lahore Chamber of Commerce and Industry Siddiq ur Rehman Rana.

Rana, who was the key player in preparing 5-year Pak-China Economic Co-operation Plan to enhance balance trade between the two countries to $15 billion, said, "I am contesting the LCCI election from corporate class with the objective to execute plan through public-private partnership without further delay.

To a question, he said that under Free Trade Agreement, Pakistan has real potential and can export about 1700 non-traditional items. Fortunately, about 350 commercial value herbs including 56 high value herbs can be exported to China, which is currently importing these herbs from other countries, he added.

Talking to Business Recorder, he said our businessmen need to change their investment priority because the real estate or capital market are no more viable and profitable in the long-run rather they should set up new industrial units to make the country economically strong.

"It is right time to take rational and prudent decisions to ensure conducive industrialisation environment because growth of industry and Greenfield investment is the solution to present economic crises" he maintained.

Interestingly, no province, except NWFP, has department of Science and Technology that reflects the government priority, he said. He suggested that the government should immediately set up Real Economy Development Boards at district level, which could provide guidance and help setting up of new industrial units in different sectors.