Pakistan Economy - News & Updates - Archive

[Neo]

Government to overcome power crisis by 2009: minister ​

KALAT (December 12 2008): Minister of State for Industries and Production, Dr Ayatullah Durrani said on Thursday that the government would overcome power shortage crisis by 2009 across the country. "The electricity crisis is inherited to the incumbent government which is direct outcome of the flawed policies of the previous government as it had not formulated any comprehensive strategy for power production in the country," he said.

While talking to tribal notables after offering Fateha for late-Dr Fazal Rehman Shah here at his residence. On complaints of residents of Kalat about non-availability of flour in utility stores, Dr Ayatullah directed the concerned officials of utility stores corporation to ensure provision of flour at fair price to the people in the district.

 

[Neo]

1,000 megawatts power shortage likely ​

LAHORE (December 12 2008): Pakistan Electric Power Company (PEPCO) fears a possible power shortage of 1000 MW in the country soon after business activity resumed after weeklong Eid holidays across the country. The independent power experts are however expecting an alarming power shortage of 7000 MW with the closure of canals for de-silting purposes.

The PEPCO as well as the Disco officials' have started pulling long faces after spending an ideal current week of weeklong Eid holidays, when both of industry and trade activities remained closed altogether since last Monday.

In the absence of any business activity, the Pepco and Disco officials were in a comfortable position, as they were not bound to manage the available load, already depleting with every passing day. It is interesting to note that the Pepco had tried to take the credit by announcing at the start of Eid holidays that there would be no load shedding during the period without disclosing the fact there was no need of any such action with the closing of business activity in general.

Especially, when a large number of industrial units, particularly those in the textile sector, had already opted for closing down business activity due to the non-availability of gas to their power units.

It is interesting to note that the Pepco fears a power shortage of 1000 MW in a situation when the canals are not closed yet for de-silting purposes, delayed until end of December or early January because of a change in crop pattern. Earlier, it was presumed that canals would be closed by the middle of December for de-silting purposes, which had paled the faces of electricity management companies.

However, a disconnection of gas to the thermal power producing units hanged the fact of consumers into balance, as the Pepco announced a power shortage of two to four hours last week with the disconnection of gas to thermal units. Another interesting development took place last week when the Discos sent notices to the industrial units that no electricity would be available for them during peak hours ie in between 5:00 pm to 9:00 pm.

So, in general, the PEPCO had planned a load shedding of two to four hours for domestic and four to six hours for commercial consumers. However, the industrial sources told this scribe that they were already facing an unannounced load shedding of six to eight hours daily. The independent observers of the view that the power distribution companies would be left with a meager amount of electricity say 5000 MW only, against a consumption need of 12,000 MW.

The PEPCO Director General Energy Management & Conservation Tahir Basharat Cheema, however, was adamant by the middle of November that PEPCO is likely to retain 10,700 MW electricity against a consumer demand of 11,000 - 12,000 MW in December. According to his approach, the IPPs, producing 5,200 MW electricity at present, would remain operational during December against the last December when all of them were closed down for maintenance purposes.

Besides, the DG Pepco had added that Wapda has launched an aggressive campaign on electricity conservation and about 1000 MW is being conserved through it. The Wapda thermal units will also keep on adding 3,500 MW electricity to the system besides another 500 - 1000 MW through hydel projects like Ghazi Barotha, Tarbela and Rasool hydel power resources. However, the federal government sources are constantly pointing out a power shortage of 4000 MW from December onwards on account of canal de-silting and Sui gas shortage, which is proving correct in present scenario.

The independent observers strongly believe that the failure of Pepco on the one hand in ensuring sufficient stock of electricity ahead of crisis period and false claims of the Minister of Water and Power regarding overcoming the power shortage by next December are proving fatal to the economic growth of the country. They have urged the government to bring the responsible ones to the task and do not let the follies of inefficient power managers unnoticed any further.

 

[Neo]

Tough times for banking industry ​

EDITORIAL (December 12 2008): Banking industry of Pakistan, after enjoying robust health for a number of years, finds itself under pressure these days. The problem of extreme liquidity crunch was not yet over when another affliction appears to be raising its ugly head.

According to the latest data released by the State Bank, the amount of non-performing loans (NPLs) has registered a sharp increase of Rs 37.3 billion during July-September, 2008 to reach close to Rs 290 billion despite heavy provisioning made by the banks against NPLs in the recent past.

It is generally believed that the problem is going to get much worse in the coming months due to the very low recovery rate of consumer financing and high interest rates. The recent Stand-By Agreement with the IMF is likely to exacerbate the problem further. The State Bank of Pakistan had to raise the policy discount rate to 15 percent which was a prior condition for agreement with the Fund for the approval of 7.6 billion dollars loan.

As the letter of intent, just issued, has revealed, Pakistan is committed to considering another increase in bank rate in the next few weeks. Final decision would of course depend on the trend in the rate of inflation, level of foreign exchange reserves etc, but the possibility of further tightening of monetary policy cannot be ruled out.

The commercial banks/DFIs could have managed the situation without much disruption in their activities if their liquidity position was comfortable. Since they are now operating in a very tight market, they are forced to pay high deposit rates to attract liquidity and remain in business. Although the State Bank has reduced the Cash Reserve Requirement and also given some temporary relaxation in CAR, it has helped matters only partly.

All these factors have combined to set a stage where lending rates are going to stay at high levels for quite some time and burden the balance sheets of the banks with fresh NPLs. The experience with consumer financing has also added to the woes of the banking industry. The increasing asset quality concerns would force the banks to book heavy provisions for NPLs. According to the SBP, total provisions of the banking sector rose to Rs 44 billion by November 22, 2008.

These are expected to reach Rs 50 billion during 2008 compared to Rs 32 billion in 2007. As against the frenzy of last few years, profits of Pakistan's banking sector are also projected to slide by three percent during 2008 due to decline in capital gains and higher administrative expenses because of the adverse combination of inflationary pressures and network expansion cost.

Thanks to the stringent policy of the State Bank with regard to loan provisioning and higher immunity of the banking sector from global financial crisis due to various factors, the problems of the banking industry have not assumed critical proportions as yet, but monetary authorities in Pakistan need to be vigilant.

Cash-starved banks cannot afford to have a high and continuously rising rate of loan defaults for long without destabilising the system which could be very damaging for the economy. Continued tight monetary policy with rising interest rates seems essential to fight the current inflationary pressures and is a condition for the Sate Bank which it must follow to satisfy the Fund authorities and attain key macroeconomic objectives.

This policy is not going to be short-lived. It is, therefore, time for the banks to accept the ground reality and, instead of linking higher level of NPLs with the rising interest rates and wailing about it, to be more prudent in their lending policies. They need to restructure their asset portfolios and restrict credit facilities only to genuine and credible borrowers to improve their recovery rates.

In fact, containment of credit and money supply within reasonable limits with a view to stabilising the price level is the real purpose of tight monetary policy. At the same time, banks need to avoid the temptation to join the race for attracting higher level of deposits in a tight market by offering unaffordable deposit rates and preserve the market share at all costs.

In the last few years, competition in the banking industry has been very intense due to very high profitability in the sector, but now is the time for deeper analysis and reflection. Probably, the industry, given the size of the market, has reached a saturation point where consolidation and mergers may be a preferred policy option. It is good to see that banks are now avoiding the misguided policy of raising the level of consumer financing.

The Shaukat Aziz government tried to showcase the idea as a great achievement, but such a strategy does not suit our economic environment where saving and investment needs to be enhanced and consumption to be curbed for a sustained growth of the economy and lowering the accelerating level of imports. Also, the users of consumer finance are generally not mature enough to see the full implications of the new facilities.

We are not averse to the idea of consumer finance as such, but the country should have the right priorities in place. Anyhow, the impact of consumer lending in the past would continue to be felt for some time in the form of higher level of NPLs and more provisioning by the banking industry.

Overall, what we want to emphasise is the fact that our banking industry is nowhere near the crisis as is being felt in the industrialised countries nor is it facing insolvency threat, but there are certain warning signals which need to be heeded to keep it in good shape.

 

[Neo]

WB lowers Pak GDP growth projections to 3 per cent ​

Saturday, December 13, 2008

ISLAMABAD: The World Bank (WB) has lowered the GDP growth projections for Pakistan to 3 per cent and the current account deficit to 4.6 per cent of the GDP for the current fiscal year 2008-09, states the Global Economic Prospects 2009 released by the WB.

The current account deficit stood at 8.1 per cent of the GDP in the previous fiscal year 2007-08, which would be brought down to 4.6 per cent of the GDP by end June 2009. The WB forecasts Pakistan’s GDP growth to 4.5 per cent by the next financial year 2009-2010.

According to the WB report, the slowdown in growth during 2008 reflected increasing weakness in the region’s two largest economies, India and Pakistan.

In India, growth slowed across all sectors, with tighter monetary policy, rising inflationary pressures, and mounting fiscal and current account deficits weighing down economic activity.

The more recent onset of the global financial crisis resulted in sharp losses in India’s equity markets and drove down the value of the Indian rupee. Foreign institutional investors pulled out of India to cover losses in high-income countries and as risk aversion heightened across the globe.

In Pakistan, the economy deteriorated sharply over the course of 2008, as headline inflation surged, and the current account and fiscal deficits jumped on the back of the rising oil and food prices.

Political turmoil and the ongoing security concerns have also taken a toll on Pakistan’s economy, while the global financial crisis added substantial downward pressures on its financial markets.

Prior to reaching an agreement with the IMF for standby credit in mid-November, Pakistan came close to a full-blown balance of payments crisis. In neighbouring Afghanistan, the economy has been hurt by a decline in agricultural output caused by poor precipitation, a sharp rise in international food prices, and the wheat export restrictions imposed by Pakistan, in addition to the disruptive effects of the spreading insurgency.

The initial effects of the global financial crisis in South Asia were sharp corrections in regional equity markets.

Bourses in India, Pakistan, and Sri Lanka dropped 57 percent, 39 percent, and 35 percent, respectively, over the year through mid-November (and 66, 50, and 39 percent, when measured in U.S. dollars).

Notably in Pakistan, curbs on the sale of equities were imposed in August, effectively preventing the exit of existing investors and discouraging potential new investors.

The general deterioration in regional trade balances has been offset by large remittance inflows, which represent a sizable, and generally increasing share of GDP: during 2007, 14 percent in Nepal, 8 percent in Bangladesh and Sri Lanka, 4 percent in Pakistan, and 3 percent in India.

Foreign Direct Investment (FDI) inflows remained strong through the first half of 2008, helping to ease external financing requirements. In India, FDI surged to 3 percent of GDP in 2008, up from 1.4 percent in 2007.

The FDI inflows to Pakistan remained relatively steady through the summer of 2008-on course to match the 3.7 percent of GDP recorded in 2007-but the extreme financial and economic difficulties encountered during the second half of the year were likely to have changed that for the worse.

 

[Neo]

Trade deficit at $8.74bn in 5 months ​

Saturday, December 13, 2008

ISLAMABAD: Pakistan’s economy racked up $8.74 billion in trade deficit during the first five months (July-November) of fiscal year 2008-09, which is 20.27 per cent (or $1.47 billion) more than what was recorded in the corresponding month of the last fiscal ($7.26 billion), the Federal Bureau of Statistics (FBS) reported on Friday.

According to statistical bureau’s latest snapshot of trade activity, during the period under review, the economy pulled in imports worth $17 billion which were more than double its exports of $8.27 billion.

During the same period of the last fiscal 2007-08, imports stood at $14.60 billion and exports at $7.34 billion.

This depicts a 16.47 per cent growth in imports and 12.70 per cent growth in exports.

One of the most interesting and encouraging aspects of the data was that during November 2008, although trade gap widened to $1.196 billion, yet it was 38.59 per cent less than the trade shortfall of $1.95 billion that was recorded in October 2008. During the month under review, imports dipped by 21.44 per cent to $2.72 billion and exports went up by 0.54 per cent to $1.53 billion over the previous month (October 2008).

Besides, comparing trade figures of the month under review with the corresponding month of the last fiscal, in November 2008 trade gap declined by 26.24 per cent from $1.62 billion recorded in same month of the last fiscal. Exports declined by 0.76 per cent from $1.54 billion documented in November 2007 while imports were down by 13.83 per cent from what was recorded in the corresponding month of the last fiscal ($3.16 billion).

Trend of trade activities during November of the current fiscal year eggs on the prospect of slowing down the pace of burgeoning deficit as imports reduced sizably against previous months. If the current trend persists and Pakistani economic planners are able to take reasonable measures for bridging the gap, it would be one of the major winning points to celebrate.

As for the last several years, the Pakistani economy is persistently confronted with the trade deficit gap that ultimately pushed up current account deficit, which is a potential threat to the economic health of the country. Ballooning trade deficit has also confronted the government with the dilemma of balancing its financial accounts.

Depreciating Pakistani rupee and record high inflation are the other two big monsters that have badly confused the government’s economic policymakers.

The government in its trade policy for the current fiscal year (2008-09) has projected an export target of $22.1 billion. Although the policy has not formally announced any import target, however, the commerce ministry’s officials revealed it would touch a $37 billion mark, indicating a $15 billion trade deficit by the end of June 2009.

 

[Neo]

South Korea to invest $300m in drinking water project ​

Saturday, December 13, 2008

ISLAMABAD: The Korean government on Friday expressed interest in investing $300 million in the development of drinking water supply pipeline from Tarbela dam to the twin cities of Islamabad and Rawalpindi on built-own-operate and transfer (BOOT) basis. The project’s total cost is estimated at $800 million.

To this effect, the Capital Development Authority (CDA) and Korean Water Resource Corporation signed a Memorandum of Understanding (MOU) here at the Ministry of Investment, Board of Investment in the presence of H E Shin Un, Ambassador of South Korea in Islamabad.

Korean Water Resource Corporation (KWRC) is in consortium with Sambu Construction Co Ltd and both Korean companies are to invest the amount in the project. The KWRC is a Korean state-owned water company that was incorporated in 1967. The firm’s annual turnover is $1.8 billion while the value of its assets is recorded at $12 billion.

The KWRC will raise loans through the Korean Exim Bank and through other loaning agencies, while the World Bank will facilitate CDA in meeting its financial requirements of the project. A detailed engineering design of the project would be made after a complete survey of the site which will take approximately 6 months to complete.

The Minister for Investment, Senator Waqar Ahmad Khan, Minister of State for Investment/Chairman Board of Investment, Saleem Mandviwalla, Secretary Investment/BOI Ashraf Hayat along with other BOI officials were also present during the MOU signing ceremony.

“We will hand-carry KWRC in fulfilling requirements needed for the implementation of this project,” stated Secretary Investment. Tahir Shamshad, Member Engineering CDA and Kim Kuen-Ho President & CEO KWRC were the signatories of the MOU, while Abdus Samad Khan Head of Treasury, CDA and Cho Nam-Won Vice Chairman Sambu Construction Co Lt signed the MOU as witnesses.

It was further informed that upon completion of 25 years of diplomatic relations between Pakistan and South Korea, the ministry of investment/BOI is organising an investment conference in South Korea on February 10, 2009.

There are 24 Korean Companies in Pakistan engaged in construction and development of infrastructure projects.

 

[dr.umer]

ADB to loan Pakistan $300 million​

12 Dec 2008

The Asian Development Bank (ADB) is extending three loans totaling $300 million to three provinces of Pakistan in support of local government programs to boost sustainable growth, reduce poverty, and improve the health of women and infants.

ADB is providing $100 million for the Second Balochistan Resource Management Program, $100 million for the Punjab Millennium Development Goals (MDG) Program, and $100 million for the Sindh Growth and Rural Revitalization Program.

The loans are assisting the provincial governments address key constraints that hinder growth, poverty reduction, and health gains. In the case of Punjab — which has the largest provincial population and economy in the country — funding for improving health care services will help it meet the MDGs for reducing maternal and infant mortality rates.

“The Program could potentially save the lives of up to 11,000 women and 235,000 infants by 2015 compared to a scenario without such support. It will also help Punjab improve public financial management in the health sector,” said Rie Hiraoka, Senior Social Sectors Specialist for ADB’s Central and West Asia Department.

The loan to the Sindh provincial government will help improve management of public spending and boost investment in rural areas, where poverty levels are high and economic opportunities are low. It will also promote private sector participation and public-private partnerships (PPPs) that can increase investment in much-needed infrastructure and social services. Technical assistance of $800,000 will be used to conduct studies and draw up options for PPPs.

“The large rural-urban divide is a serious concern. Accelerating growth and improving the income of the rural poor are essential for economic and social stability in Sindh,” said Xiaoqin Fan, Senior Public Resource Management Specialist at ADB’s Pakistan Resident Mission.

In Balochistan — the country’s largest but sparsely populated province — the loan will strengthen the provincial government’s management of public finances, create a more sustainable and affordable civil service pension system, and help improve governance in the lucrative but largely-untapped mineral resources sector. A technical assistance grant of $800,000 will help the provincial government implement the Program.

“The Program will address some of the binding constraints on economic growth by allowing for more efficient use of public resources, while paving the way for greater private investment especially in the minerals sector,” said Jose Antonio Tan III, Public Finance Economist in the Central and West Asia Department.

 

[dr.umer]

EU helping Pakistan in improving health & education facilities ​

ISLAMABAD, Dec 12 (APP): The European Union and Pakistan have been engaged in an ongoing political dialogue to promote understanding and cooperation to improve health, education and basic needs of life for the people especially in the remote areas.

This was stated by French Ambassador to Pakistan Daniel Jou Anneau and Head of Delegation of the European Commission to Pakistan Jan De Kok while addressing a joint press conference at French Embassy here to launch Blue Book 2008 comprising details and assistance of EU to Pakistan in different sectors.

Both the ambassadors appreciated commitment and dedication of Pakistan’s present political government for strengthening Pak-EU relations in different fields.

They said, “The EU is fully engaged in the international efforts to increase aid effectiveness for a better coordination and harmonisation of development cooperation with other donor agencies working in Pakistan.”

The French Ambassador said the Blue Book 2008, comprising details of Pak-EU cooperation has been presented to Prime Minister Syed Yousuf Raza Gilani recently.

He said, “EU is satisfied with the progress of its projects in Pakistan during the last four years.” He expressed the hope that there could be more positive progress in the next few years due to EU assistance in Pakistan in different fields.

The French Ambassador said EU is Pakistan’s largest trading partner and it is the world’s largest provider of Official Development Assistance (ODA) to Pakistan.

He said during 2005-7, the EU committed more than Euro 900 million to Pakistan and 60 per cent was invested in education, energy generation, housing and construction.

The French Ambassador while referring to meeting of EU envoys with Advisor to Prime Minister on Finance Shaukat Tareen on Friday said the EU members were convinced about the financial and economic programme prepared by Pakistan to cope with the present financial crisis.

He said an important meeting of EU-Pakistan Troika, comprising Foreign Ministers of Pakistan, EU, current EU President France and next EU President Czech Republic will be held early next year to further enhance and promote Pak-EU relations.

About Pakistan’s export problems to EU countries, EU Commission Ambassador Jan De Kok said due to lack of implementation of strict food safety regulations in Pakistan, there is a ban on the export of food items to EU.

The EU ambassador said due to anti-dumping duty issue, there has been limited access of Pakistani products to EU markets. The issue will be discussed in the meeting being held in March next, he added.

He said about giving status of Free Trade Agreement (FTA) to Pakistan, Ambassador Kok said, Pakistan is the 52nd trading partner to EU while EU is the first trading partner to Pakistan. He however said negotiations on this issue would be held at political level in the next meetings of the EU-Pakistan ministerial group.

Replying to a question about Pak-India tension and role of EU, the French ambassador said there has been no official statement or reaction from Indian side about any war threat following the Mumbai incident and there were only press statements.

He said,”We have not seen any declaration from Indian side officially of any threat of war against Pakistan.” He said there have been very cautious statements from Indian side.

The ambassador said India has accused non-state elements which was also referred by Pakistan.

He appreciated President Asif Ali Zardari’s statement in this regard and said it showed commitment from Pakistan’s side for improving good and peaceful relations with India.

The ambassador said cooperation was the only way as both the countries have said they could not afford war.

He said there is need to create and improve confidence among the people of the two countries, for putting pressure on the political leaders to find solutions to problems between the two countries.

The French Ambassador said political engagement and extra steps being taken in this regard would be taken to solve the problems between the two countries.

He said beyond official, political and trade relations, the EU and Pakistan have a long history of people to people contacts.

About providing financial assistance to Pakistan from EU, he said, EU has been involved in various projects as partner and it will continue in future.

 

[fatman17]

UK gives aid package to Pakistan

Douglas Alexander has been meeting people of Pakistani origin
The UK is giving a £480m support package to Pakistan to help increase security on the Afghanistan border.

Douglas Alexander, the UK international development secretary, said the money would also be focused on education and health projects.

The MP launched the plan at Glasgow Central Mosque, at the end of a UK tour to meet people of Pakistani origin.

The UK wanted to "help ease the suffering of the 36 million poor people living in Pakistan", he added.

More than £250m has been earmarked to increase training for young people and get five million children into school.

Mr Alexander said: "We are brought together by a shared history and strong cultural and economic ties.

"We need community groups, the private sector and civil society to work together, to work with the international community, and to work with us to fight poverty through development.

"Our aim is to continue to help improve poor people's lives in key areas, making sure they have access to better healthcare, schools and employment opportunities."

Other plans for the money include helping reduce the incidence of diseases such as TB and polio, and assisting with earthquake reconstruction.

 

[Neo]

‘Flawed projections’ ​

Private sector credit estimated to jump by Rs332bn in current fiscal​

Sunday, December 14, 2008

ISLAMABAD: Pakistan’s economic team has accepted ‘flawed projections’ related to money supply growth (M2) for obtaining bailout package of $7.6 billion from the IMF, official sources warned.

According to projections laid out in the package the private sector credit is estimated to go up to Rs732 billion in the current fiscal from Rs400 billion last financial year, although such an upsurge was never witnessed in the country’s last 60 year history, sources pointed out.

The country is already facing threat of a recession for the next couple of years if agriculture sector remains unable to rescue the ailing economy in fiscal year 2008-09 for achieving a modest growth of 3 per cent.

Real GDP growth may witness an overall negative growth again after 1952 the last time Pakistan’s economy never achieved overall negative growth.

The private sector credit would go beyond its capacity in accordance with the IMF and Pakistan deal, which was basically aimed at matching money supply growth number of 10.8 per cent for the current fiscal year that was revised downward from earlier envisaged target of 14 per cent.

The private sector credit was projected to increase up to Rs732 billion at a time when discount rate and overall investment climate is altogether moving towards the opposite direction.

“The M2 growth target of 10.8 per cent cannot be achieved therefore there are strong indications for persistent recessionary period for the economy of this country for next two to three years,” said the official.

The private sector credit stood at around Rs400 billion during the last financial year 2007-08 and it is beyond imaginations how the private sector credit would witnessed such a peak when everyone is looking forward for lower growth rate.

“The private sector credit was agreed to jack up to Rs732 billion in order to project M2 (money supply growth) in the range of 10.8 per cent during the current fiscal year,” said the official sources and added that the M2 would not go beyond 4 to 5 per cent by the end of the current fiscal year owing to higher discount rates and investors shyness to expand their businesses.

Till November 22, 2008, the M2 growth was negative Rs58.338 billion against surplus of Rs87.896 billion on the same date of the previous fiscal year.

The Net Foreign Assets (NFA) stood at negative Rs342.447 billion while Net Domestic Assets (NDA) of banks were Rs283.709 billion.

The nominal growth is projected at 27 per cent for the current fiscal year and how M2 growth in the range of 4 to 5% will be able to fuel the economic activities, is still beyond imagination, the sources questioned?

At a time of Net Foreign Assets (NFA) are in negative mode and the IMF also slapped condition to achieve zero borrowing from the central bank, the NDA requirements would touch Rs 1006 billion for the current fiscal year.

Total stock of money supply stood at Rs 4,689 billion in the last fiscal year and with 14 per cent target of M2 growth, it would touch Rs5345 billion in the current fiscal year.

If presume that the loan of private sector would remain in the range of Rs450 billion, provision for public sector enterprises Rs50 billion, commodity operations Rs50 billion and remaining Rs10 billion, there will be additional Rs350 to Rs450 billion lying unutilised.

 

[Neo]

Power deficit to increase to over 3,000MW in January ​

Sunday, December 14, 2008

ISLAMABAD: The ongoing power deficit of 1,500MW is to swell to over 3,000MW in next month wing to which, the authorities concerned have decided to extend zero power supply to all steel melting units for 8 hours with immediate effect from January 1, 2009, a senior official told The News. “The power deficit of 3,000MW that is to hit country next month has also promoted authorities to increase the load-shedding duration to 6 to 8 hours across the country from existing 4 to 6 hours power outages.

“Yes, we have decided to pull the plug on the power supply to 80 to 100 steel melting units with consultation across the country in the wake of massive power shortage. We will make the zero power supply for one shift working spanning 8 hours duration from January 1, 2009. This decision will help save 250MW of electricity,” Tahir Basharat Cheema spokesman of Pakistan Electric Power Company confirmed to The News saying that PEPCO is left with no option but to take this decision because of the canal closure period that is to start from December 26 and end by January 31.

To a question, Cheema said The PEPCO is also in consultation process with All Pakistan Textile Mills Association (APTMA) with regard to power outages duration for Mills to cope with the power crisis. Through conservation, this time PEPCO will be able to save about 1,000MW from January 1 to ease out electricity situation.

In addition, all the thermal units of 1,000MW which are right now on an annual maintenance would come on stream by December 25 except one unit of Jamshoro power house of 200MW as it will be operational in the month of January.

Cheema said Chashma Nuclear Power Plant of 300MW which is non-operational for the last months because of fuel replenishment as change of fuel rods take five to six months, will also come on stream on January 17. During the period from December 26, 2008 to January 31, 2009 the existing hydro generation of 2,500MW will come down to its lowest ebb in the wake of the complete closure of canals by all federating units for annual de-silting.

“During the period, there will be no water demand from province to cater to irrigational requirements and almost negligible water releases from Terbela and zero releases from Mangla will reduce the hydro generation up to 500MW. Because of the massive reduction in water releases, the hydro generation has tumbled to 2,000MW from 6,500 MW in August-September this year.

Another reason of the current power deficit which why the country is experiencing the load-shedding is nominal supply of gas to power houses which is around 8.5 million cubic feet gas per day. The three rental power houses which only run on gas is producing zero electricity because of non-availability of gas.”

Cheema said Pikhi and Sheikhupura rental power houses of 285MW and GTPS Faisalabad of 210MW have become non-functional as not alternate fuel other than gas can be used in the said rental power houses.

This has deprived the country of 495MW of electricity. This has actually worsened the ongoing power deficit. However, the country would have 81MW of Malakand-3 and 165MW of Attock Power and KESC and PEPCO system in the currant month. Besides this, 350MW of AES Pak Gen which is at annual maintenance would come on stream by December 13, 180MW of Muzafarabad to start generating electricity by December 15, 200MW of Jamshoro power house by December 25 and two units of Guddu power houses of 150MW would also be operational in the current month after annual maintenance.

“This would help PEPCO minimize the impact of canal closures on power deficit to some extent,” he said.

 

[Neo]

Remittances up 14.7pc in July-November ​

Sunday, December 14, 2008

KARACHI: Remittances sent home by overseas Pakistanis increased $379.44 million or 14.67 percent to $2.966 billion during July-November 2008 over the same period of the last year.

In November 2008, an amount of $620.52m was sent home that is the second-highest amount received in the current fiscal year 2008-09.

In July last, an amount of $627.21m was received as workers’ remittances.

During the first five months, remittances from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $767.12m, $600.25m, $534.25m, $496.21m, $188.95m and $81.02m respectively as compared to $733.76m, $481.81m, $423m, $380m, $197.41m and $76.09m respectively in the July-November, 2007 period.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries this year amounted to $298.39m as against last year’s $294.03m.

The monthly average remittances for the period July-November, 2008 comes out to $593.30m as compared to $517.41m during the corresponding period of the last fiscal year, registering an increase of 14.67 percent.

During November 2008 remittances from UAE, USA, Saudi Arabia, GCC countries, UK and EU countries amounted to $146.16m, $140.19m, $105.45m, $100.74m, $39.18m and $15.87m as compared to $88.18mn, $142.95m, $90.90m, $77.86m, $32.91m and $15.41m in November 2007.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during November, 2008 amounted to $72.77m.

The amount of $2,966bn includes $0.32m received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

 

[Neo]

Pakistan, China ready for FTA on services ​

Deal to be effective after ratification of accords​

Sunday, December 14, 2008

ISLAMABAD: Pakistan and China have managed to seal Free Trade Agreement on services, which will help the country in meeting skilled human resource deficit, a senior official told The News.

“This will really help translate the time tested political ties with China into economic relations,” he said.

“The technical experts of both the countries have sealed the agreement on services on December 3 under which Beijing would come up with huge investment in the Human Resources Development that would actually lead the country to a place where the developed countries are,” the official said.

Pakistan delegation headed by Shahid Bashir, Senior Joint Secretary of Commerce Ministry took part in the most crucial talks with the Chinese experts.

However, both sides will get the ratification of the deal on services sector from their respective cabinets and then top leadership of both the countries would formally ink the deal on services sector at appropriate time and then the FTA on services will be operational.

Ministry of Commerce is set to announce the salient features of the deal on services with China on Monday.

The Chinese were interested to open fully owned subsidiaries in Pakistan, but Pakistan managed to make them understand that Chinese should embark upon huge investment in services sector in the shape of joint ventures as ventures will help increase the capacity of Pakistani people to deliver services and this will also give the opportunity to harness the technology in excelling in the area of services sector.

Under FTA on services both the countries would trade in banking, communication, medical, education, labour and construction sectors.

The official said that China and Pakistan would recognize the degrees of each other institutions particularly in medical field. China would also come up with massive investment in area of Research and Development (R&D) as this area in the past has been miserably neglected and no country has come forwarded to investment in Research and Development.

Both countries would open banks branches also and make trade through each other banking facilities. The official said that China has shown interest in Islamic banking also.

In the communication sector, China would also invest a lot in various projects as it is already engaged in making vital projects of the country too. China will also transfer the technology to Pakistan in organizing the sports event, as the way China has managed to hold the Olympics is really tremendous.

Pakistan has also included a special protocol in the earlier FTA on goods, which is very much in place. Under special protocol Pak-china special investment zones would be established. All the products, which will be manufactured in the special investment zone would have access in China markets on zero duty. The official said that China would also come up Greenfield Investment in Pakistan meaning by that China would bring massive fresh investment in various sectors of economy.

Under the FTA on goods, the bilateral trade has swelled up to over $6 billion out of which Pakistan’s exports to China stands at over $1 billion and imports from China to Pakistan stands over $5 billion as per the statistics compiled by Chinese concerned department. However, as afar as Federal Bureau Statistics Division is concerned, Pakistan’s exports to China stand at $600 to $700 million, while imports from China hovers around $ 4.5 billion.

 

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Senate body for improving education ​

standard at grass-root level​

Sunday, December 14, 2008

ISLAMABAD: The Senate Standing Committee on Education, Science and Technology on Saturday discussed the education programmes launched by the National Commission for Human Development (NCHD).

The committee members were of the view that a holistic approach was required to improve the literacy rate in the country and should work jointly for improving the standard of education at the grass-root level.

The committee, met under the chair of Senator Razina Alam Khan, observed that close coordination with the provinces and other stakeholders was required to achieve better results.

The Senate body hoped that the review of the NCHD programmes would help in identifying the areas which had not been heeded so far to chalk out the future course of action to achieve the MDGs.

The committee chairperson said that it would also give recommendations to the NCHD in formulating policies for improving the literacy rate in the country.

Earlier, Begum Shahnaz Wazir Ali, special assistant to the prime minister, informed the committee that a review of the education and health programmes launched by the NCHD was underway. It was informed that the NCHD was a track support organisation and was mandated to fill gaps at lower level in social sectors to achieve the MDGs.

The committee assured its all-out support in overcoming various problems being faced in the implementation of the literacy-related programmes in the country and vowed to contribute positively to bring improvement in the system.

The meeting was attended by Senators Tahira Latif, Dr Abdul Khaliq Pirzada, Rehana Yahya Baloch, Dr Muhammad Said, Liaqat Ali Bangalzai and Prof Muhammad Ibrahim Khan.

 

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Remittances to Pakistan soar ​

KARACHI: Remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $2,966.51 million was received in the first five months (July-November, 2008) of the current fiscal year 2008-09, showing an increase of $ 379.44 million or 14.67 percent over the same period of the last fiscal year.

The amount of $2,966.51 million includes $0.32 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

In November 2008, an amount of $620.52 million was sent home by overseas Pakistanis, which is the second-highest amount received in the current fiscal year. In July 2008 an amount of $627.21 million was received as workers’ remittances.

The inflow of remittances in the July-November, 2008 period from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $767.12 million, $600.25 million, $534.25 million, $496.21 million, $188.95 million and $81.02 million respectively as compared to $733.76 million, $481.81 million, $423.00 million, $380.00 million, $197.41 million and $76.09 million respectively in the July-November, 2007 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first five months of the current fiscal year 2008-09 amounted to $298.39 million as against $294.03 million in the same period last year.

The monthly average remittances for the period July-November, 2008 comes out to $593.30 million as compared to $517.41 million during the same corresponding period of the last fiscal year, registering an increase of 14.67 percent.

During last month i.e. November 2008 remittances from UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $146.16 million, $140.19 million, $105.45 million, $100.74 million, $39.18 million and $15.87 million respectively during November, 2008 as compared to $88.18 million, $142.95 million, $90.90 million, $77.86 million, $32.91 million and $15.41 million in November 2007. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during November, 2008 amounted to $72.77 million.