Pakistan Economy - News & Updates - Archive

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ISLAMABAD: Chairman Pakistan Agricultural Research Council (PARC) has underlined the need for a fast-track approach between Pakistani and Chinese scientists working on developing high yield hybrid rice.

He was talking to a four-member delegation of Chinese agricultural scientists that called on him here on Tuesday.

The delegation, currently on a visit to Pakistan, is led by Dr Chang-xiang Mao, Chief of the International Project Office, Guangxi Academy of Agricultural Sciences (GXAAS).

Dr Tasneem, appreciating the efforts and achievements of the Chinese scientists said China was pioneer in hybrid rice that gives high yield with equally better quality.

He recalled that way back in 1986 Pakistani scientists started developing hybrid rice with Chinese technology but no tangible results have been produced.

Chairman PARC was of the view that it was time that the scientists of both the countries focused on other value-added crops relating to rice through more collaboration and joint ventures.

Chinese delegation offered long-term cooperation between GXAAS and PARC in developing hybrid and super hybrid rice in Pakistan, based on resource-sharing, exchange of expertise and training o f scientists.

It is noted that the Chinese delegation is visiting Pakistan under the 16th protocol.

The purpose of the visit is to exchange information regarding hybrid rice, R&D and to develop long term collaboration between China and Pakistan for the development of good grain quality hybrids to meet the requirement of South Asian and Middle Eastern markets.

 

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Wednesday June 21, 2006

ISLAMABAD: Owing to geo-strategic importance in the region, Pakistan has offered China, Russia and central Asian states access to warm waters.
Talking at a press conference here Tuesday, Muhammad Ali Durrani, federal minister for information told that Pak-China eternal friendship was based on inter dependency, which would be taken forward to new heights.

President General Pervez Musharraf in his recent China visit presented charter, which would usher an era of potential peace and prosperity in the region, he hoped.

He expressed optimism that under Pak-China historic agenda, the cordial established relations in commerce, culture, trade, investment, cultural and exchange of youth delegations including cooperation in defence area would be taken forward.

The leaderships of Pakistan and China had established deep-rooted ties under which both the countries would take practical steps to link both countries through railway and road links in addition to cooperation in gas pipeline.

President Musharraf exchanged views with his Chinese counterpart to daulize Silk route and its up gradation would ensure easy access of Chinese goods into Pakistani markets.

He went on to say under Pak-China fresh defence cooperation, JF-17 thunder aircraft and frigate preparation respectively for Pakistan Air Force and Pakistan Navy would prove a mile stone for strong defence.

On relations with Russia, he said that recent meeting between President Musharraf and his Russian counterpart Vladmir Putin would help boost Pak-Russia ties in various areas.

"The meeting between Pakistani and Russian leaderships is of immense importance in which they agreed to forget the past and initiate fresh steps to forge ties for prosperous future," he added.

The Russian President also thanked Pakistani leadership for offering observer status in the OIC, he said adding that Pakistan has also offered that Iran could use Silk route as a trade route.

He informed that Gwadar port could play greater role in access to warm waters adding that President Musharraf presented both the issues of Kashmir and Palestine effectively.

Quoting President Musharraf, he said that Musharraf told the global community that disputes of Palestine, Kashmir and others should be resolved to control the menace of terrorism.

He said that Musharraf invited Chinese investors to invest in Pakistan’s energy, new dams, highways and establishment of new industries.

He said that China had pledged $900 million to promote the cause of Shanghai Cooperation Organization (SCO). Musharraf meeting with Iranian President would help bolster Pak-Iran relations in the long-run, he concluded.

 

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Wednesday June 21, 2006

KARACHI: America will provide $ 200 million aid to Pakistan for promotion of public health and education and alleviation of poverty. An agreement in this regard was signed by Pakistan and America.
Chairman Pakistan American Business Council, Iftikhar Ali Malik, said that the aid, which would be provided under the agreement to Pakistan would help in construction of schools in Northern Areas including other part of the country. He said that the aid for health sector would help in controlling and combating many diseases.

He said that the living standard of masses would be enhanced due to the steps taken for promotion of education and alleviation of poverty.

 

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RAWALPINDI (updated on: June 22, 2006, 20:17 PST): President General Pervez Musharraf on Thursday said the government is committed to facilitating investment in infrastructure sector to ensure Pakistan's shift to industrial economy and expressed satisfaction at growing international confidence in the country's economic scenario.

He was addressing a meeting on the President's Investment Initiatives, which meets every month to review progress on implementation of decisions and initiatives for attracting investment in various sectors of the economy.

President Musharraf held out a firm assurance to provide protection and an equal playing field to foreign entrepreneurs and directed for removal of any bureaucratic hurdles in the way of investment.

President Musharraf particularly noted the tremendous prospects and foreign companies' interest in development of tourism, infrastructure, property development, housing, information technology and hotel industries.

"The development of a strong infrastructure will ensure that Pakistan offers high quality of services to businesses", he said, welcoming the keen interest of the Gulf, European and American companies in these sectors.

 

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ISLAMABAD (updated on: June 22, 2006, 20:27 PST): Oil giant BP Plc will invest $20 million in oil and gas exploration off Pakistan in collaboration with Pakistan's Oil and Gas Development Corporation, the oil ministry said on Thursday.

BP aims to invest a minimum of $20 million in offshore exploration jointly with OGDCL, the ministry said. It gave no more details.

Senior manager Steve Peacock briefed Minister for Petroleum and Natural Resources Amanullah Khan Jadoon on BP's plans in talks in Islamabad, the ministry said.

BP is already producing 12,000 barrels per day of crude from Pakistan's Badin fields, it said.

Pakistan imports 85 percent of its energy needs, including about $4 billion worth of oil a year.

It is struggling to increase domestic oil production of about 63,000 barrels per day, which it hopes to raise to 100,000 bpd within five years.

The government estimates the country has 27 billion barrels reserves of oil and 280 trillion cubic feet of natural gas.

 

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ISLAMABAD (June 22 2006): Pakistan's external liabilities - external debt plus foreign exchange liabilities - totalled $36.557 billion at the end of March 2006, indicating an increase of 3.72 percent or $1.312 billion since December 30, 2005, said the State Bank of Pakistan (SBP).

Of the total liabilities, the external debt of the country has surged by $1.38 billion (4.12 percent) to $34.90 billion during the third quarter of 2005-06 against $33.523 billion recorded at the end of December 2005.

During the first nine months (July-March) 2005-06, total external liabilities increased by $723 million against $35.834 billion recorded by end June 2005. Thus, the external debt increased by $866 million during the period under review.

According to the SBP provisional data, the country's public and publicly guaranteed debt has been on the rise for the last four years.

On June 30, 2005, it was $31.084 billion as compared to $29.875 billion of June 2004. And now, during the first nine months of this fiscal, it stands at $31.82 billion with an increase of $737 million compared to June 2005.

In public and publicly guaranteed debt, the medium and long-term debt (more than one year) during the period under review augmented by $800 million to $31.613 billion as it was $30.813 billion at the end of June 2005.

According to the break-up of the medium and long-term debt, the multilateral debt by end-March 2006 grew by $518 million to $15.876 billion; Euro bonds/Saindak bonds by $642 million to $1.908 billion; and bilateral debt up by $126 million to $931 million compared to June 2005 when it stood at $15.358 billion, $1.266 billion and $805 million, respectively.

While during the period under review, the volume of Paris Club debt declined by $418 million to $12.596 billion, military debt by $51 million to $137 million and commercial loan/credit declined by $17 million to $165 million as compared to $13.813 billion, $188 million and $182 million in June 2005.

The significant feature of the SBP data was that the short-term external debt (less than one-year) from Islamic Development Bank (IDB) also declined to $208 million during March 2005-06, as at the end of last fiscal year, it was $271 million.

The private non-guaranteed debts (more than one-year) during the period increased to $1.588 billion from $1.342 billion at the end of FY05.

The SBP data also depict a decline of about $117 million in the International Monetary Fund (IMF) debt. During the first three-quarters of FY06, as it was $1.494 billion compared to $1.611 billion in the final quarter of last FY05.

The foreign exchange liabilities, excluding foreign exchange bearer certificates, foreign currency bearer certificates and Dollar bearer certificates (which stand at $7 million) declined by $143 million during the period under study to $1.654 billion from $1.797 billion at the end June 2005.

Of this, during the period under review the special US dollar bonds declined by $121 million to $300 million, as it was $421 million at the end of FY05. Besides, foreign currency bonds (NHA/NC) declined by $22 million to $4,109 million from $131 million end June last fiscal year.

While the central bank deposits, NBP/BOC deposits and other liabilities (Swap) remained unchanged for the last three years at $700 million, $500 million and $45 million, respectively.

 

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ISLAMABAD (June 22 2006): Mitsubishi Corporation, Japan will start Clean Development Mechanism (CDM) in Pakistan from January 2007 with $30 million investment. Hajime Katsumura, CEO Mitsubishi Corporation said that the Clean Development Mechanism (CDM), will be first of its kind in the world, private TV reported.

Apart from Pakistan, a similar project is being launched in Japan as well The project aims to reduce global warming by treating industrial emissions. An investment of $30 million would be made in this project. Under the project nitrous oxide emissions from Pak-Arab Fertilisers will be treated to create Carbon Credits (CRs), which will be sold in the carbon market.

 

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TEHRAN (June 22 2006): Iran will not sell its gas at knock-down rates to Pakistan and India, a senior oil official said on Wednesday amid a pricing dispute in talks over a planned pipeline.

"The price suggested by Pakistan and India is almost half of the price we offered," Deputy Oil Minister Mohammad-Hadi Nejad-Hosseinian said on state radio. "If the two governments intend to subsidise their domestic gas, there is no reason for Iran to pay this subsidy," he added.

The Iran-Pakistan-India (IPI) gas project envisages a pipeline of about 2,600 kilometres (1,600 miles) that would help meet South Asia's growing energy needs.

The United States has voiced opposition to the project, reflecting concerns about Iran's nuclear ambitions - and the three parties engaged in the discussions have also been at odds over pricing.

Quoted by the Iranian Oil Ministry's Shana news agency, Nejad-Hosseinian said Iran was not desperate to sell its gas to Pakistan and India.

"The tripartite peace pipeline agreement is not an absolute obligation," he said.

He also warned Pakistan and India that if the nuclear issue was resolved, other countries "will be the first customers of our gas (and will pay) even better prices."

The official also said there was disagreement with Pakistan and India over the amount of gas to be exported - with Iran unwilling to sell a large chunk of its planned daily exports of 480 million cubic metres (17 billion cubic feet) to just two countries.

"We think it is better for us to have various customers," he said.

The three sides held their last round of talks on the project in May

 

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LAHORE (June 22 2006): The Punjab government has asked the authorities concerned to ensure 100 percent completion of work on Ghazial, Khai and Domeli dams and 70 percent work on six other small dams in the districts of Chakwal, Jhelum, Attock and Rawalpindi in 2006-07.

Official sources told Business Recorder here on Tuesday that the provincial government is also going to start construction work on two hydropower projects through the public sector. 'There are 48 sites in the province where potential of generating more than 2 MW power exists. The provincial government has been working on the feasibility to undertake these projects in a phased manner', the sources said.

According to them, the provincial government has also finalised a regulatory framework for inviting the private sector to undertake the construction work on hydel projects on BooT/BoT basis.

During the period from 1960-1995, only 32 schemes of small dams in the Barani areas were taken up by various governments, while the sitting Punjab government has started construction work on 19 new dams. Two of these dams, Basal dam and Mial dam have been made operational, while work on eight other dams will be completed by the end of current financial year. The work on remaining nine dams will be completed by June 2007. On completion of these dams, an additional 31,110 acre land would be brought under cultivation, the sources said.

About Basal and Mial dams, the sources said Basal dam was constructed in district Attock at a cost of Rs 30 million. This has started irrigating about 400 acres of virgin land besides meeting drinking water needs. Mial dam was constructed in district Chakwal at a cost of Rs 60 million. This has started irrigating around 1,500 acres of virgin land apart from meeting drinking water needs, the sources added.

The sources further said that the provincial government is augmenting renewable energy resource base through installation of low-head hydel stations on canal falls, apart from implementing remediation measures and initiatives to reverse environmental degradation and groundwater mining.

 

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ISLAMABAD, June 21: Average inflation measured by the Consumer Price Index (CPI) resurged in May and stood at 7.1 per cent year-on-year (YoY) as compared with 6.2 per cent in April 2006, thus hitting the lowest income group.

The average inflation during the July-May period of the current fiscal year stood at 7.9 per cent, which is significantly higher than 5.6 per cent inflation witnessed during the same period past five years.

Similarly, monthly inflation at 0.5 per cent in May 2006 was also higher than deflation observed in May 2005 as well as in the same month past five years, according to the State Bank of Pakistan’s monthly publication titled `Inflation Monitor’ released on Wednesday.

The report also observed resurgence in other two measures of inflation -– the Wholesale Price Index and the Sensitive Price Index. Although both food and non-food inflation increased during the month, the food group remained the key contributor to the overall inflation.

The report says in contrast to the previous months, the lowest income group recorded above average inflation in May 2006. Since the current wave of inflation was mainly due to the food group and food has a relatively higher weight in the consumption basket of the low income segment of population, the incidence of inflation was higher as compared to those of other income groups during the month.

Food inflation increased to 5.6 per cent in May 2006, up from 3.6 per cent in April 2006. The reasons for this increase pointed out were mainly due to a weak base along with significant increase in prices of a number of important items, including milk, meat, sugar, potatoes, cold drinks, and pulses.

Price movements of individual items in the food group show that YoY rise in prices of wheat and its products, pulses, besan, milk, meat, and sugar overshadowed the impact of the YoY decline in prices of vegetable ghee, cooking oil, poultry, onion, and tomatoes, along with a subdued inflation in number of other items.

Moreover, wheat prices, which have been showing YoY deflation since October 2005, increased by about one per cent in May 2006, over the corresponding month last year. However, the wheat prices are still lower than those in the last six months of the current fiscal year. The average price of pulses also recorded more than 60 per cent increase, over May 2005. Price of sugar, though slightly lower as compared with the last month, is still 40 per cent higher than that during May 2005.

Other commodities showing double digit inflation are milk, meat, cold drinks, ice-cream, potatoes and bananas. In terms of percentage contribution to food inflation, sugar was the highest contributor during May 2006, followed by milk, beef and grams.

Non-food inflation rose to 8.2 per cent during May 2006 as compared to eight per cent recorded in April 2006 as well as in the corresponding month last year. The increase in this group during the month under review was mainly contributed by higher inflation in fuel and lighting, furniture and equipments, cleaning, laundry and personal appearance and education.

The increase in fuel and lighting resulted primarily due to significant increase in gas cylinder prices; higher prices of air-conditioners and fans caused rise in household furniture and equipment sub-group; record high gold and silver prices pushed up inflation in cleaning, laundering and personal appearance; and higher inflation in education was the result of an increase in university fees.

Core inflation (non-food non-energy) also witnessed an increase of 6.6 per cent in May 2006, after a continuous decline for the last several months. The increase in core inflation was mainly due to second round effect of the earlier increase in oil prices which has been reflected in the rising transportation cost and consequently in general price level.

 

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Thursday June 22, 2006

ISLAMABAD - UNDP has prepared projects in the development-planning framework besides institutional strengthening for the National Disaster Management Commission (NDMC) and the National Disaster Management Authority (NDMA).

The projects will also support creation of similar mechanisms at provincial, regional, district and local levels, training programs for capacity development of the stakeholders concerned and development of disaster preparedness plans at local and national levels, said UNDP officials.


“Disasters impede sustainable development thus the integration of disaster risk reduction into development strategies will compliment efforts in poverty reduction, rural and urban livelihoods, education, environment, equality, health services, local governance, political or policy advocacy, empowerment of women,” said the official adding that the October 2005 earthquake exposed Pakistan’s vulnerability to natural disasters and accentuated the need for preparedness.


UNDP will play its role in the implementation of the ERRA-UN plan, particularly in the livelihoods, governance and disaster risk reduction sectors. UNDP is also seeking support for priority initiatives included in this plan that are critical to the transition from relief to rehabilitation and recovery.


UNDP has designed three initiatives, one in support of local government institutions while the other two supporting the government’s capacity to coordinate recovery and reconstruction efforts. “The first initiative will aim at developing capacities to plan and implement early recovery and to engage and mobilise all partners, including affected citizens and communities,” the official said, adding that this project will especially focus on the most vulnerable population in the remote areas that are difficult to access.


The second initiative will aim at strengthening the institutional and programmatic capacity of ERRA by supporting the establishment of planning, tracking and monitoring systems for recovery, reconstruction and rehabilitation in AJK and NWFP.

The third initiative will provide capacity development for aid coordination to support coherent aid management, and promote accountability and transparency in the use of external resources. This initiative has two projects; one will focus on building government’s capacity for aid management through the establishment of an information management system within the Economic Affairs Division (EAD), Ministry of Finance.


Official said that other project would strengthen an integrated UN Resident Coordinator’s office to provide long-term strategic planning and development process in line with the existing development assistance frameworks, including the Millennium Development Goals.

 

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KARACHI: Twenty-two creeks along the shoreline of Sindh province can electrify the whole of Karachi without the use of gas, furnace oil or any other fuel.

It’s a nature’s gift with no consequences. The more used the better. Only one-rotor wave-powered turbine at each of these identified water inlets can energize half of the metropolis for as long as sun rises from east and sets in the west.

This out-of-the-box technology is not being commercially used anywhere in the world partly due to its high cost and because of mankind’s addiction to fossil fuels. And considering the developing status of Pakistan, it won’t be fair to expect any breakthrough in this regard.

But this very fact makes it all the more important for the country to push innovation vis-‡-vis energy production. Energy will be needed to feed industries, which in turn employ growing population in developing countries.

The Economic Survey 2005-06 indicates the usage of gas that makes up more than half of the energy mix is increasing and demand will outstrip domestic production by next decade.

To meet this shortfall government is pursuing various options including multinational gas pipelines, incentives for onshore and offshore hydrocarbon exploration, import of liquefied natural gas (LNG), and promotion of non-conventional energy resources.

Where it has also moved to ensure optimum utilization of indigenous gas reserves, the concept of inelastic nature of petroleum is too strong to ease its influence over emerging economies any time soon.

But as the vulnerability of international oil prices continues to threaten the global economies, Pakistan has witnessed a structural shift in its energy consumption pattern.

Since 2000-01, industries that used oil are now diverting towards other sources while average consumption of petroleum products has showed an annual decline of 3.3 percent in last five years, though it remains the darkest aspect of national trade deficit.

Over a million vehicles are now running on compressed natural gas (CNG) but for how long remains to be seen. Power sector that consumes the biggest chunk of gas uses power generation machinery, which is outdated and wastes natural gas.

To offset the damage, government is encouraging cogeneration power plants but even with this damage control exercise, gas reserves of 32 trillion cubic feet are estimated to be enough for next 23 years only.

On the other hand, the share of coal in electricity production has decreased over the years to a negligible level. However, the government has decided in principle to enhance the share of coal in energy mix to 18 percent in next twelve years.

It has also announced to establish a coal mining and power generation company on pattern of WAPDA to harness the Sindh coal reserves, estimated at 175 billion tonnes.

The survey that was published before budget does not suggest the feasible price of imported gas. In case the cost of imported gas is more than that paid to exploration and production companies, it would discourage the activities in upstream oil and gas industry.

This has placed a daunting challenge before official circles to maintain a balance between prices of piped gas and local production while also ensuring a fair consumer price.

Until the prospects for alternate energy resources are properly explored and a final decision is not taken on import of gas, the way forward will be to promote energy conservation.

 

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ISLAMABAD: Contrary to the government’s tall claims, country’s exports to 83 countries where Pakistan was doing better in the past, have shown decline, according to export receipts data prepared by the State Bank of Pakistan for the period July 2005-January 2006.

The commerce ministry on trade policy had fixed the export target of $17 billion for the current fiscal year and so far exports have reached $15 billion, posing a gigantic task for ministry and Export Promotion Bureau to register the export of $2 billion by June 30, 2006 which seems remote keeping in view the exports trend in the last one and half months of fiscal years in the past.

Asif Shah, Secretary Commerce Ministry said the ministry would analyse exports after the fiscal year ends as the State Bank had calculated the trade figure of first six months.

Shah said that by May 30, exports reached $14.9 billion and in June, the country needs to have export of $2.1 billion to meet the target of $17 billion.

The disclosures of SBP show that out of 83 countries, exports to six countries were zero during July 2005-January-2006. They were Andorra, Antigua & Barbuda, Cayman Island, Guam, Nauru and Kiribati.

However, exports during the period under review in last fiscal stood at $0.110 million for Andorra, $0.117 million for Antigua & Barbuda; $0.230 million for Cayman Island; $0.1 million for Guam; $0.17 million for Nauru and $0.112 million for Kiribati.

Pakistan’s exports to UK have decreased by $122 million (71 per cent) in July 2006-January 2005 to just $522.126 million from $644.174 million in the same period of the last fiscal 2004-05.

According to the data, export to Germany fell to $1.5 million to $391.557 million during the period under review from $393.091 million in the corresponding period of the last fiscal.

 

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Thursday June 22, 2006, 6:29 pm


KARACHI, June 22 Asia Pulse - The National Engineering Services of Pakistan (Nespak) in association with Airport de Paris Ingenierie (ADPi) of France has been awarded the project management consultancy services for the US$1 billion expansion of Seeb and Salalah airports in Oman, the company said in a statement.

The expansion of these two airports is being carried out by the Oman's Ministry of Transport and Communication to meet the needs of growing air traffic in the country.

The traffic at Seeb International Airport in Muscat is expected to increase from 3 million passengers at present to 24 million by 2020.

The expansion of the airport will include a new passenger terminal building, a new VVIP (very very important persons) terminal, a cargo terminal and a new runway.

At Salalah Airport, a new passenger terminal, cargo terminal and associated infrastructure will be built.

 

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RAWALPINDI (June 23 2006): President General Pervez Musharraf on Thursday said the government is committed to facilitating investment in infrastructure sector to ensure Pakistan's shift to industrial economy and expressed satisfaction at growing international confidence in the country's economic scenario.

He was addressing a meeting on the President's Investment Initiatives. President Musharraf held out a firm assurance to provide protection and a level playing field to foreign entrepreneurs and directed removal of any bureaucratic hurdles in the way of investment.

He particularly noted tremendous prospects and foreign companies' interest in development of tourism, infrastructure, property development, housing, information technology and hotel industries.

"The development of a strong infrastructure will ensure that Pakistan offers high quality of services to businesses," he said, welcoming keen interest of the Gulf, European and American companies in these sectors.

Industries and special initiatives minister Jehangir Khan Tareen and minister of state for privatisation Omar Ahmed Ghumman attended the meeting and briefed the President about progress vis-à-vis decisions and implementations since the last meeting that took place on May 10, 2006.

The President, speaking at a presentation on alternate energy sources, said Pakistan would encourage investment in utilisation of alternate sources to fuel its economic growth through provision of cost-effective energy as well as reducing its dependence on expensive thermal power.

He directed earliest implementation of projects envisioned for making use of wind and solar energy.

"We must make the best use of untapped energy potential in the form of wind and solar energy to meet growing requirements in the long-term, as this has become all the more important in the face of soaring oil prices," he said.

Minister of state for privatisation Omar Ahmed Ghumman, Wapda chairman Tariq Hameed, Nepra chairman Lieutenant General Saeeduz Zafar (Retd), PPIB managing director Khalid Rehman, and alternate energy development board secretary Brigadier Dr Nasim A. Khan attended the meeting.