Pakistan Economy - News & Updates - Archive

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$13.4 billion external funding needed: IMF​

KARACHI (November 26 2008): Pakistan's gross external financing requirement for the 2008/09 (July-June) fiscal year is $13.4 billion, a senior International Monetary Fund (IMF) official said on Tuesday. The IMF will provide $4.7 billion of that total, Juan Carlos di Tata, senior adviser in the IMF's Middle East and Central Asia Department, told reporters.

The gross external financing requirement for the 2009/10 fiscal year is estimated at $12.2 billion, Tata said. "These amounts that I mentioned are needed to cover the external current account deficit for both fiscal years, and the maturing short-term debt and mobilisation of medium- and long-term debt," Tata told reporters over a conference call.

The IMF on Monday approved a $7.6 billion loan for Pakistan to avert a balance of payments crisis, out of which Pakistan will get immediate access to $3.1 billion under the 23-month facility.

The rest will be phased in subject to quarterly review, the Fund said. The package means Pakistan will be able to cover an international sovereign bond maturing in February. The Fund said on Monday the current account deficit is targeted at 6.5 percent of gross domestic product this fiscal year, and 5.7 percent in the 2009/10 fiscal year, compared with 8.4 percent in 2007/08.

The IMF said it projected foreign exchange reserves to be $8.591 billion this fiscal year and $11.291 billion next year. Tata said the gross external financing was a "critical part of the programme" and the financing requirement, not including the IMF's $4.7 billion, was about $8.7 billion.

The requirement will be covered by foreign direct investment of about $4.5 billion and also medium- and long-term borrowing from other multilateral and regional institutions such as the World Bank, Asian Development Bank and Islamic Development Bank and some financing from bilateral creditors for projects. The second tranche will be made available after the completion of the first review under the programme, which is expected to be completed in mid-March of 2009.

"This programme also has some quarterly quantitative targets on several variables including, for instance, the budget deficit, budgetary borrowing from the State Bank of Pakistan, international reserves and the domestic assets of the SBP," Tata said.

Tata said the second disbursement would be made available if quarterly targets are met, and also after the review of some benchmarks on structural issues that are included in the programme. He did not give target details. The Fund has also asked for an end to the central bank financing of the government from November 1. Tata said in order to eliminate borrowing, the interest rates set at Treasury Bill auctions would have to be attractive.

"The interest rates will have to be sufficiently attractive for commercial banks to purchase enough Treasury bills so that the domestic requirement of the government is covered through commercial bank sources," Tata said. He further said the target of zero government borrowing from the central bank could also be achieved by using non-banking sources such as Pakistan Investment Bonds and National Saving Schemes.

 

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Cement export, white wheat import via Gwadar: EMC decision​

KARACHI (November 26 2008): The government has decided that export of cement to Middle East and Persian Gulf regions and import of white wheat from the United States and Canada, under grant/deferred payment, would be exclusively through Gwadar Port.

According to sources, the decision was taken by the Economy Monitoring Committee (EMC), in its meeting on November 20 to make Gwadar port really operational and clear congestion at two ports in Karachi, which is hurting the growth of cement exports.

Sources said that the move would not only help the visiting vessels save thousands of dollars in terms of steaming time, that on average amount to $40,000 per day, but would also help the government to avoid payment of huge ship demurrage in case of congestion. The recent congestion at Karachi's ports had cost Trading Corporation of Pakistan (TCP) (for wheat import) around $30,000 per day in terms of ship demurrage, they added.

Sources said that when fully operational, the currently congestion-free Gwadar port would be in a better position to help the poverty-stricken country saving millions of dollars in terms of dispatch earning.

The cement vessels, which have to wait at the outer anchorage, sometimes for days together, would have quick berthing facility, which would ultimately put fascinating impact on cement export growth, added the sources.

The EMC took the decision after reviewing a presentation of the Ministry of Ports and Shipping on difficulties of cement export due to insufficient berth availability at Karachi Port and Port Qasim. EMC had also decided that cement exports for other destinations, like the African continent, would be through Karachi Port and Port Qasim.

To ensure safe and efficient handling of import of wheat at Gwadar the EMC had proposed that the tender conditions should include a "minimum shipment quantity 60,000 metric tons with vessel draught more than 10.5 metres but less than or equal to 12.5 metres," they added.

According to sources, EMC had noted that although the government had imported sufficient red wheat on time, but the essential commodity could not reach the user on time due to congestion and insufficient berthing and storage capacity at the two ports. The Committee had also noted that the above-mentioned situation had caused embarrassment to the government, sources said.

 

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US pressurising Pakistan to cancel locomotive deal with China ​

LAHORE (November 26 2008): Railways Minister Ghulam Ahmad Bilour presided over a lengthy meeting with senior Railway officials in Islamabad on Tuesday which was also attended by US embassy officials and some American engineers to reconsider Pakistan Railways' contract with a Chinese company for purchase of 75 locomotives.

Business Recorder has learnt that the United States has been pressurising Pakistan and has taken up this matter at the highest level to get the cancellation of PR's locomotive purchase contract amounting to Rs 8 billion and award it to a US company.

Senior officials who attended the meeting told Business Recorder that no decision has been taken in Tuesday's meeting and another meeting would be held on Thursday to decide the matter. He said Pakistan Railways awards contract after an open and transparent tender process. In the present purchase of 75 locomotive deal, Chinese company Dongfang was the lowest bidder and its price was half of the other competitors.

The Chinese company had offered to provide 75 engines at the cost of $107 million as against the US company's tender of $227 million. The cash starved Pakistan Railways had entered several agreements with Chinese railway companies for its development and modernisation of its outdated system In 2001, Pakistan Railways signed a $91.89 million contract with China National Machinery Import and Export Corp for the manufacture of 175 new high-speed passenger coaches. The project was funded by Exim Bank China on a supplier credit basis.

Under an agreement signed with China in 2003, Pakistan Railways purchased 69 locomotives of which 15 were delivered as completely built units while remaining 54 were built at Pakistan Railways' locomotive factory. The locomotives were purchased on suppliers' credit basis with funding provided by Exim Bank China through the Dongfang Electric Corporation.

However, some influential circles have been propagating that the Chinese railway engines were not up to the mark, therefore, Pakistan should not buy additional railway coaches and engines from China.

Nevertheless a senior Railway official remarked that the coaches and locomotives provided by China on credit are being successfully used on Pakistan's mail and express trains from Rawalpindi-Lahore-Karachi, Lahore-Faisalabad and Rawalpindi-Quetta.

He said: "Pakistan Railways is already facing an annual deficit of Rs 42 billion. Therefore we have to keep in mind the price tag of each locomotive engine. A man who could afford only a Suzuki car should not dream for a Mercedes or BMW car," he emphasised.

He said the technical and the tender committee had not unduly favoured Dongfang in awarding the contract as it has fulfilled all required technical requirements and standards.

Under another project, Chinese companies are rehabilitating 450 passenger coaches at an estimated cost of Rs 2.14 billion. The project also included the conversion of 40 coaches into air-conditioned cars and the conversion of 10 power vans. Furthermore, there was a provision of 100 new high-speed bogies, 30 of which were imported from China, while 70 were manufactured locally on a transfer-of-technology basis.

 

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'Zardari's visit to UAE will generate investment opportunities'​

ISLAMABAD (November 26 2008): Minister of State for Industries and Production Ayatullah Durrani on Tuesday said the visit of President Asif Ali Zardari to UAE would help create investment opportunities in Pakistan. "Pakistan is playing an important role in the region and the decision of President Zardari to pay first official visit to UAE reflects the future strategy of present democratic government", he said while talking to PTV.

"Our government will prepare a long-term co-operation framework, which will strengthen the economic, commercial and cultural relations between the two countries," he said. Ayatullah said people wanted a welfare state where everyone should get justice and the government was taking steps to materialise their dreams.

The Minister said that under the guidance of President Asif Ali Zardari, the country would overcome its economic issues and people would soon witness a prosperous Pakistan. Asif Ali Zardari's first official visit to UAE will help boost the existing trade and economic co-operation between the two brotherly countries having common perceptions on various regional and international issues.

 

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IMF's double-edged rescue for Pakistan​

By Syed Fazl-e-Haider

QUETTA, Pakistan - The decision of the International Monetary Fund's executive board on Monday to approve a US$7.6 billion credit to Pakistan to stave off a balance of payments crisis reduces for the time being the prospect of Islamabad defaulting on its foreign debts.

In the IMF's first rescue in Asia since the beginning of the current global financial crisis, Pakistan will get between $3.5 billion and $4 billion as a first tranche, which is likely to be transferred to the country's central bank's account in the US Federal Reserve in New York. Cash-strapped Pakistan will have the money by Thursday, as the disbursement takes 48 to 72 hours.

Analysts believe that the rapid disbursement has the support of the US government, which wants to help Pakistan arrest its economic deterioration as soon as possible. Its precarious financial situation has caused widespread alarm due to Pakistan's role as a key ally in the US-led "war on terror" and its position as the Islamic world's only nuclear power.

Local analysts are, however afraid of the harsh conditions linked to the IMF loan and believe these conditions could convert the financial mess into a political crisis.

The credit will "support the country's economic stabilization program", the IMF said in a brief statement. The country's foreign exchange reserves shrunk just short of $100 million to $6.64 billion during the week ended November 15. Reserves held by the central bank declined in the week by $37.1 million to $3.459 billion.

The IMF cash may help the nation overcome a "crisis of confidence"' and improve its debt rating, Bloomberg reported, citing Asian Development Bank managing director Rajat Nag.

A rescue plan "could have the advantage of presenting an opportunity to force countries like Pakistan to come to grips with entrenched structural distortions in its economy", Dawn newspaper reported, citing a joint article from Washington's Middle East Institute by Wendy Chamberlin, the former US ambassador to Islamabad and former IMF economist Zubair Iqbal.
The Pakistani rupee ended firmer on Monday on expectation of the IMF giving the go-ahead for the stand-by arrangement, according to local currency dealers.

The rupee rose 1.3% last week to 79.29 per US dollar, touching 79.15 on November 19, the highest since October 10, after strengthening from a record low of 83.55 on October 17, according to Bloomberg. The rupee plunged in October as the balance of payments deficit in the three months from July 1 widened to $3.95 billion from $2.27 billion a year earlier.

Even so, the loan will not extend long-term help to the currency market, as one IMF condition is that the aid cash will not be used in the currency market, according to the local currency dealers. The rupee would only stabilize in the long term when there is an improvement in inflation and the current account deficit, according to the analysts.

The government is being strongly criticized for succumbing to IMF conditionalities even before the release of the bailout funds. Before approval of the loan, the IMF had called for measures including withdrawal of a wide range of subsidies by the end of the fiscal year ending next July 1, barring the central bank’s intervention in the foreign exchange market, and imposition of an agriculture tax.

Pakistan had to go to the IMF for the unpopular stand-by agreement to avert an economic meltdown because the government suffered a "trust deficit" which did not allow it to use other options with success, the Dawn reported, quoting a Finance Ministry official. Local businessmen and industrialists have strongly opposed the recent rise in the central bank's discount rate, the highest increase in more than a decade and one seen as being linked to the IMF deal.

Pakistan’s industrial landscape may soon be marked with dead and sick units and there will be massive unemployment because of the devastating impact on businesses of the higher cost of bank loans arising from the interest rate increase, according to Anjum Nisar, the president of Karachi Chamber of Commerce and Industry.

The IMF conditions have not yet been made public, but local media reports have suggested the terms may be almost impossible to implement in Pakistan.

"If Pakistan accepted the IMF funding, it would have to reduce the defense budget by 30% between 2009 and 2013 and would reduce the number of posts entailing pensions in the government and semi-government departments from 350,000 to 120,000," The News claimed last month.

According to the report, the loan terms would include the fund's intervention in central bank affairs, provision to the IMF of details of foreign exchange reserves, remittances and flow of foreign exchange through commercial banks, the imposition of a 7% tax on wheat production and a 3.5% levy on other crops, and IMF monitoring of preparations of the federal budget.

"The Pakistan government will have to provide details of loans it got from all other lenders, including China, 48 hours before signing the funding agreement with the IMF, and 25% of the government assets pledged as securities for such loans will be the property of the IMF," the report said.

Subsidies for power, gas and petroleum products will be eliminated by next July, according to the Business Recorder. This condition will be particularly tough if it is applied to agricultural inputs, as at present the government provides a subsidy of 32 billion rupee on fertilizers. The government will have to burden the people, especially the poor, to meet the IMF demands, the Business Recorder said.

Among other terms believed to be included in the IMF deal is an increase to 15% in the ratio of tax to gross domestic product. The government would have to increase indirect taxes, instead of direct taxes, which would hit the general public as the ratio of general sales tax may have to be increased, the Business Recorder report said.

Parliamentarians on both government and opposition sides have said they will strongly resist any move to tax agriculture, saying every farmer will come out on the streets against such a move after high diesel and other input costs have already made it hard to survive. The legislators claim an IMF deal is tantamount to making the country hostage to the global market.

Democratic governments in the 1990s failed to meet demands under an earlier IMF deal to levy an agriculture tax. "If Pakistanis once again fail to impose an agriculture tax, this will be the last IMF program they will have," Dawn reported one analyst as saying.

Low-income workers and the unemployed are already battling soaring prices, with year-on-year inflation according to the sensitive price index (SPI) hitting 29.02% during the week ended November 20.

Other data for the economy are as grim or grimmer. The current account deficit widened 98.5% to $5.943 billion in the July-October period compared with a year earlier, according to the central bank. The oil bill during the period jumped 93% year on year to $4.92 billion and the food bill surged 77% to $1.58 billion.

The imbalances are rising despite the recent steep fall in global prices of oil and food.

"No one could deny the fact that the conditions linked to the IMF package may be terribly harsh, but the fund's team monitoring disbursements will have a strict check on 'royal spending linked to the lavish living of a few at the top'," Dawn reported, citing a local analyst Hasnain Asghar Ali.

Another analyst, Ashraf Zakaria, said: "Although the IMF credit line has allayed fears of a possible default on foreign debt repayments, its fallout on the economy amid further increases in the discount rate and taxes could well prove a double-edged weapon. both for the financial and the corporate sector."

Syed Fazl-e-Haideem sfazlehaider05@yahoo.com, is a Quetta-based development analyst in Pakistan. He is the author of six books, including The Economic Development of Balochistan, published in May 2004.

 

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IMF bailout funds reach Pakistan, boost rupee​

KARACHI, Pakistan (AP) — Pakistan received the first tranche of a $7.6 billion loan from the International Monetary Fund on Thursday, a bailout package aimed at stabilizing the economy as it fights soaring Islamist violence.

The currency strengthened slightly against the dollar after the Central State Bank of Pakistan said the IMF had transferred $3.1 billion, part a rally that begin several weeks ago when it was clear that the fund would help.

The IMF agreed to lend money to banish the immediate risk of a currency crash and debt default in a country already creaking under the pressure of 25 percent inflation and slowing economic growth.

Al-Qaida and Taliban militants based close to the Afghan border are behind a spreading insurgency against Pakistan's secular government and are also blamed for rising attacks against Western forces in Afghanistan.

The IMF said in return for the money Pakistan had agreed to phase out energy subsidies, boost taxes and implement other money saving reforms. The rest of the money will be transferred to Pakistan in quarterly installments, subject to it implementing the reforms.

The government has said it now expects to receive more money from Western allies, which have said they do not want to see further turmoil in the country.

 

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Funds for uplift projects cut to 15pc of allocations ​

Thursday, November 27, 2008

ISLAMABAD: In pursuance of the International Monetary Fund’s (IMF) demand to curtail expenditures the government has reduced fund releases to only 15 per cent of the allocations to all ministries/divisions during the second quarter (Oct-Dec) of the current fiscal year, officials informed on Wednesday.

The funds cut is likely to halt major portion of work on 1,900 development schemes going on all over Pakistan, it is learnt.Following the IMF conditions to cut expenditures for obtaining $7.6 billion loan the government has adopted 1990s strategy of slashing development spending - the first and most easy victim - without reducing its own extravagant spending for more than 55 ministers and ministers of state.

“Yes, the Ministry of Finance has officially communicated to the Planning Commission for providing only 15 per cent funds releases for all kinds of development projects in accordance with submitted cash plans of concerned ministries,” official sources confirmed while talking to The News on Wednesday.

The sources said that the decision for releasing 15 per cent funds would provide only Rs54 billion in Q2FY09 (Oct-Dec) for all ministries/divisions.After this decision, the massive cut in funds releases during last three quarters - Apr-Jun 07-08, Jul-Sep 08-09 and Oct-Dec 08-09 would hurt the development activities on all projects.

The Finance Ministry released only 15 per cent funds for Q1FY09 and the same level persisted for the Q2FY09.The Planning Commission high-ups are seeking time from the top economic managers for holding joint meeting to get first hand knowledge about the ‘resource envelop’ the commission would get for the remaining months of the current fiscal in order to prioritise the ongoing development schemes.

“This decision will lead towards slowing down of development projects executed by the public sector in the current fiscal,” a senior official conceded. Various Ministries/Division have told the Planning Commission that the provision of only 15 per cent funds in the second quarter would not be sufficient to meet the financing requirements at all.

The sources said that the planning managers had sought 15 per cent releases by themselves, which made Finance Ministry’s work easier to slash down funding of ministries/divisions.When a high-level official in Planning Commission was contacted for official comments, he said that the funds were released keeping in view spending capacity of various ministries.

He said that the financial position of the country would improve after substantial drop in global POL prices as well as strengthening of rupee against dollar in recent days.“These developments will help the finance managers to bridge the financing gap in the remaining months of the ongoing fiscal year,” said the official and added hoped that the government would be able to catch up envisaged development spending by June 30, 2009.

But the sources in Finance Ministry high-ups say that this level of fund releases would continue for the rest of the financial year to achieve fiscal deficit target.The sources said that the government would make sure that ministries utilise the funds. “We have told the ministries and provinces to get releases when they will be able to spend it,” added the sources.The government bears the cost of taking loans from the domestic or external avenues and it cannot allow funds lying idle.

 

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RoK firms interested in hydropower project ​

Thursday, November 27, 2008

ISLAMABAD: Korean construction and power companies are interested in investment for development of Taunsa Barrage Hydropower Project (120 MW) on built-own-operate-transfer (BOOT) basis.

A visiting Korean delegation comprising of M/s Sambu Construction Co Ltd and M/s Korean Midland Power Company (KOMIPO), called on the Secretary, Ministry of Investment, Ashraf Hayat. He welcomed the Korean delegation and discussed bilateral economic relations between the two countries and appreciated the Korean company’s interest for investment in the development of Taunsa Barrage Hydropower Project.

The Country Director of M/s Sambu Construction Co Ltd mentioned that their company has been in Pakistan for the last 15 years and is committed to bringing in more foreign investment in the country for various projects. He also mentioned that their delegation is expected to meet the Prime Minister of Pakistan on 15-17 December, 2008. He thanked Secretary, MOI for arranging their meetings with Managing Director, PPIB, and Secretary, Irrigation, Punjab.

 

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SBP to get $3.1bn of IMF loan in next 24 hours ​

Thursday, November 27, 2008

ISLAMABAD: The first instalment of $3.1 billion of the IMF loan will be transferred into accounts of the State Bank of Pakistan (SBP) within next 24 hours, The News has learnt.

When this scribe contacted to spokesman of the SBP, Syed Wassimuddin on Wednesday evening, he said that the first tranche had not yet been received by the SBP. He said that there was time difference of over 10 hours and the offices in USA would not start opening so the confirmation of received instalment could be made on Thursday.

When Secretary Finance Ministry, Dr Waqar Masood was asked in this regard, he said that the money will be transferred into SBP accounts within next 24 hours. However, the sources said that the money would be transferred into the accounts of the SBP during Wednesday night (in accordance with Pakistan Standard Time) when there would be day time in USA. The SBP will confirm about receiving the $3.1 billion amount as first tranche of the IMF loan today (Thursday), said the official.

 

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Foreign cos to set up $2bn fund for Pak economy ​

Thursday, November 27, 2008

ISLAMABAD: Federal Minister for Investment Senator Waqar Ahmed khan has said the foreign investment companies operating in Pakistan have agreed to establish an infrastructure fund with an amount of $2 billion, which will help to boost the economic activity in the country.

The minister opined after a dinner meeting hosted in the honour of representatives of the investment companies at his residence in Islamabad here on Wednesday. He said the ministry is working on a comprehensive investment plan/strategy and expects to fetch its share especially from China and Middle East countries. He said he will encourage foreign investors to come forward to benefit from the investment friendly policies of Pakistan.

He said there is great potential especially in agriculture and livestocks, oil and gas exploration and in the power sector. The minister said the ministry of investment has been established under the mandate to work as facilitator/coordinator and to remove the bottlenecks and ease the official procedure. He said, “we are working to create an investor-friendly environment.”

 

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Engineering goods’ share in total exports rises to 4pc ​

Thursday, November 27, 2008

LAHORE: Local engineering industry, lacking technology, increased its share in total exports from Pakistan from 2.4 per cent in 1999-2000 to 4.1 per cent in 2007-08, which is still only 0.12 per cent of the global engineering trade.

World engineering goods trade exceeds $6 trillion while the engineering goods exports from Pakistan were 708 million in 2007-08. The exports though increased three times from the $203 million exports of engineering goods achieved in 1999-2000, and are still negligible when compared with global engineering trade.

Engineering experts said that some of the low valued engineering industries of the country have achieved required efficiencies to capture some markets in developed economies that have stopped producing low value added products due to high labour costs.

However, the entrepreneurs say they have not been able to exploit this potential due to various policy flaws. They said steel is the basic raw material of the engineering industry but it is available in Pakistan above the global rates due to the protection provided to Pakistan Steel Mill.

They said more than two thirds of the steel used in the country is imported. Its cost increases because the government provides protection to the local mill that produces less than one third of the steel and steel products. The shortage of power and energy and their high rates are the other factors, they added.

 

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Pakistan to export its tanks, says Mukhtar​

KARACHI: The successful inauguration of the Fifth IDEAS-2008 exhibition will bolster Pakistan’s defence industry, and it is hoped that the country would start exporting its battle tanks from next year, Defence Minister Chaudhry Ahmed Mukhtar said on Wednesday.

He said this while visiting the manoeuvres of the locally built AI-Khalid, Zarar and Saad Main Battle Tanks at EXPO-Centre Karachi. The defence minister said that Pakistan had achieved the technical know-how to build the tanks - AI-Khalid, AI-Zarar and APCs according to international standards.

The minister held a meeting with Chinese and Tanzanian officials at the Expo centre and discussed bilateral issues to promote interaction between respective defence industries.

While talking to journalists at a press conference, he said that the International Monetary Fund had not imposed any sanctions, which would cut the country’s defence budget. app

 

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Government urged to grant EPZ status to district of Sialkot​

SIALKOT (November 27 2008): Sialkot is total export-oriented city of Pakistan and possesses century-old industrial heritage. It has developed a remarkable export culture over the period and is contributing more than $1 billion in foreign exchange annually.

The business community of the area has urged the Federal and provincial governments that Sialkot district should be given the status of export processing zone for accelerating the pace of export activities and to increase the volume of exports from the district.

The exporters community is trying its utmost for doubling its export volume despite tough competition in the world market, to fetch more foreign exchange into the country. The small and medium enterprises (SMEs) are playing a significant role not only in strengthening the national exchequer but also in providing employment to thousands of workers.

In order to develop true and secure small and medium industries culture of Sialkot the government should formulate a special package of incentives and concessions for SMEs of the area to increase its export volume manifold and to solve their problems.

The development of cottage industries in Sialkot has assumed a model status for the developing world. The city has thousands of small and medium enterprises, engaged in meeting their global commitments for export of value-added quality goods such as sports goods, surgical instruments, leather goods, gloves, badges, musical instruments, etc.

The city has developed industrial edge over other cities of the country, especially in sports goods and surgical instruments. Over 0.12 million industrial workers are engaged in these industries and are earning their livelihood in a respectable way.

Many researchers of different foreign universities are considering conducting research on the unique export culture of Sialkot, which is a hub of cottage industries and an export-oriented city of Pakistan. The researchers would concentrate on ascertaining how Sialkoties are doing the export business successfully where every third person is an exporter. The business community of Sialkot is playing a tremendous role not only in bringing boom in exports but also fulfilling the social responsibilities and the uplift of the city on voluntarily basis.

Over 85 percent of production of soccer balls of the world comes from Sialkot, while all international brands are sourcing their supply of footballs from this city. The success story of Sialkot-based industries can be attributed to unmatched skill of local workers and their craftsmanship.

The soccer ball industry has totally been purged of the menace of child labour, and Sialkot has become a role model for others to follow for the elimination of child labour. The business community has developed the culture of 'Do-it-yourself' in Sialkot, under which the business community is playing a pivotal role for the development of the city and welfare of the people.

For the construction of city roads and drains, Sialkot Chamber of Commerce and Industry (SCCI) has initiated Sialkot City Package in collaboration of other trade bodies in the city.

Under the programme, exporters are voluntarily contributing 0.25 percent against their export invoices, as a result of which many city roads and drains have been constructed. The mega project of Sialkot international airport has become operational, which has been constructed by the local business community on the basis of 'Build, Operate and Own' (BOO), costing over Rs 2 billion.

It is expected that the more foreign airlines would soon start their passenger and cargo flights from Sialkot in near future. Sialkot international airport is a unique project in private sector and first of its kind in not only in the country but also in South Asia. Despite extraordinary contribution of the local exporters, the city is being ignored in many respects, which deserves a very special status.

Keeping in view the importance and contribution of Sialkot, the city should be treated as a city of cottage industry and both federal and Punjab governments should announce special concessions and incentives for this export-oriented city for the larger interest of the SMEs.

 

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Country to get out of economic crisis soon: Naveed​

KARACHI (November 26 2008): Federal Minister for Privatisation Naveed Qamar has said that the higher interest rate will affect the investment, however the country will soon get out of economic crisis which is part of the global economic meltdown.

Speaking as a chief guest, at the graduate employer awards 2008 organised by PSHRM and Engage Human Resources (HER) at a local hotel on Tuesday, he said that the agreement with the International Monetary Fund was a difficult decision for the government.

He added that the government's decision to go to IMF was aimed to cope with the economic problems. He said that the government's consolidation was aimed to stabilise the political and economic systems of the country, in which it succeeded despite problems.

Later, he gave the PSHMR HR Awards 2008 to Telenor Pakistan for its employee life cycle engagement HR initiative. Other institutions received the award were Royal Bank of Scotland (RBS), Unilever Pakistan, Mobilink, P&G, Microsoft, Schlumberger and Siemens. While Wateen and British petroleum were identified as the most preferred graduate employers. On the occasion, Paul Keijzer, CEO HER, Khursheed Hadi, chairman HER and Navroz Surani president PSHRM also spoke.

 

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Non-trade barriers restrict exports to India​

KARACHI, Nov 26: Pakistan’s two-way trade volume with India is being estimated to have exceeded $5 billion in a year in which share of exports from Pakistan is only $400 million. Top leaders of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) blame non-trade barriers by Indian authorities for restricting exports from Pakistan.

“Pakistan should not be made a dumping ground of Indian goods,’’ demanded S. M. Muneer, the recently-elected president of Indo-Pakistan Chamber of Commerce and Industry at a press conference. He revealed that the formal trade volume between two countries is $2 billion a year. “But the bulk trade is routed through Dubai, which amounts to $3 billion a year.”

Overland trade with India through trucks was resumed in October 2007 after which about 80 to 100 Indian trucks come with perishables virtually every day, Muneer said but no truck from Pakistan is going to India because of logistics. Indians have not provided enough space on their side for parking of trucks, he revealed.

Mr Muneer was in India with Pakistani business leaders, where he was elected president for a two-year term of the Indo Pakistan chamber. Tanveer Sheikh, the FPCCI president said that the Indo Pak chamber as well as the apex trade bodies of two countries is taking up the issue of non-trade barriers with Indian authorities.

Despite complaints about non-trade barriers in India, the Pakistani business leaders shared Indian businessmen view that the Pakistan government should trade with India on negative list rather than a positive list of items as is being done now. “Why am I not allowed to import machinery and equipment from India, which is cheaper than those being imported now from Europe and USA and on much less freight and within a timeframe that suits me,’’ Muneer said.

Muneer, Tanvir Sheikh and many other leaders in the press conference shared the view that bureaucracies of the two countries were responsible for creating hurdles in two-way trade and resumption of normal relationship between Pakistan and India.

Muneer wondered as to why containers are not allowed for overland transportation of cargo between two countries when there is a provision for railway bogies and trucks.

He demanded that the governments of both India and Pakistan should take necessary steps to develop infrastructure and logistics at international borders to promote two-way trade between them.

“Not only through Wagah but also at international border in Sindh, the cross border trade be promoted,’’ he replied when informed that all through in his statement he talked of overland trade between Pakistan and India through Wagah border only.

Mr Muneer will convene the meeting of the executive committee of the Indo Pakistan chamber in February next and plans to hold a meeting at least once in a month.

“All the countries of South Asia have a common history, common cultural heritage and family connections with their neighboring countries,’’ says a prepared document given to journalists in the press conference to point out that almost all the disputes between South Asian nations are not based on beliefs, faiths or religions, they are mere politico economic in their nature.

Businessmen of the two countries have identified potential areas of mutual cooperation and joint ventures, which relate to agricultural products, tyres, auto parts, minerals, chemicals, pharmaceuticals, leather, textiles, telecommunications, gas pipeline, electricity generation using coal and wind energy in Sindh.

The businessmen urged the two countries to conclude a bilateral investment agreement to further broaden the scope of cooperation between India and Pakistan that should pave way to opening of banks and resumption of a full- fledged shipping connection.