Pakistan Economy - News & Updates - Archive

[Neo]

New oil policy envisages incentives for exploration ​

Saturday, 10 Jan, 2009

ISLAMABAD: The new petroleum policy approved by the Economic Coordination Committee (ECC) of the cabinet on Friday envisages an increase in tax exemptions and fiscal incentives to spur oil and gas exploration and a reduction in bureaucratic hurdles in the award of contracts for exploration.

During the ECC meeting, it was also decided to increase dealers and marketing companies’ profit margins on the sale of petroleum products and also to revise oil prices on a monthly basis instead of fortnightly review.

Under the Petroleum Exploration Policy, consumers will have to pay up to 38 cents per million British Thermal Units (BTUs), amounting to 10 per cent price increase, for new gas discoveries in different zones.

In zone-I, the gas price has been raised to $5.03 a unit from $4.65, while in zone-IV from $4.10 to $4.38.

Presided over by Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin, the ECC increased the profit margins of dealers on the sale of all petroleum products, except diesel, from four to five per cent. It also enabled oil marketing companies (OMCs) to earn a four per cent profit instead of the previous 3.5 per cent.

On diesel, the dealers’ margin has been increased to Rs1.50 a litre from Rs1.14. OMCs, however, will now earn Rs1.35 per litre of diesel, increased from Rs1.3 a litre.

‘The government is ethically bound to raise the margins of OMCs and dealers after the decline in international crude oil prices,’ the additional secretary of the ministry of petroleum, G.A. Sabri, said at a press conference after the ECC meeting.

The government has pocketed over Rs50 billion through the imposition of Petroleum Development Levy (PDL) and sales tax on petroleum products over the past six weeks and there are no signs that the government will reduce prices in the near future despite a sharp fall in international oil prices.

When the secretary was asked why the government was not passing on the benefit of decline in world prices, Mr Sabri said the government owed the OMCs Rs12 billion in price differential claims when it had asked the companies to sell oil at lower than market prices, and it had to pay them back to recover the subsidies paid to domestic consumers.

When asked whether there was any limit to PDL as it constituted more than 50 per cent of petrol and HOBC prices, Mr Sabri said: ‘There is no law under which PDL is levied. PDL itself is a law. And, law has no limits.’

OIL PRICE: Mr Sabri said next price revision would take place by the end of this month, because from now on petroleum prices will not be reviewed fortnightly but on a monthly basis from Jan 16..

Mr Sabri said various stakeholders, including transporters, were not ready to reduce fares to match the decline in domestic prices of petrol and diesel. He also said diesel and petrol prices could not be decreased further to save the compressed natural gas (CNG) industry.

The ECC also set aside a proposal to empower the Oil and Gas Regulatory Authority (Ogra) to monitor the furnace oil price, which is so far unregulated. The committee turned down the proposal because it amounted to controlling the prices of furnace oil, a task that did not come under the purview of the government.

The ECC also rejected a proposal under which there should be a two-tier prices of Liquefied Petroleum Gas (LPG) on domestically-produced and imported LPG.

 

[Neo]

Pakistan July-Dec Trade Deficit Widens 15% To $9.559 Billion​

KARACHI -(Dow Jones)- Pakistan's trade deficit in the first six months of the current fiscal year widened by 15% on year to $9.559 billion, an official of the Federal Bureau of Statistics said.

Pakistan's exports in the six months to Dec. 31 rose by 11% to $9.573 billion compared with $8.658 billion a year ago.

Imports recorded an increase of 13% to $19.133 billion, compared with $16.951 billion, the official said.

Pakistan's trade deficit in December alone narrowed to $816 million compared with $1.029 billion in the same month last year. Exports showed a marginal decline in December, amounting to $1.31 billion, compared with $1.32 billion, while imports dropped 9% to $2.127 billion.

The government set a target of $39 billion for imports and $20 billion for exports in the current fiscal year ending June 30, 2009

 

[TopCat]

The government had earlier tabled ventures worth $60 billion in the FoP’s last meeting in Abu Dhabi on November 17 last year, however, after the donors’ feedback, the list was being amended, they said.

Wow its a lot of money!!!!!!!!!!!!
Why would those country give Pakistan that kind of money? Also I dont understand, how Pakistan could ask that? Its kinda awe full though

 

[Neo]

US tries to muster another $4b for Pakistan​

Washington—Keen to help Pakistan straighten out things,America is trying to muster another US $ 4 billion from Friends of Pakistan consortium expected to meet in Islamabad early next month authenti soures here revealed.It simultanesouly has been playing a key role in helping ease india-Pakistan tension and was awaiting eagerly last Monday about the outcome of the meeting the Indian Foreign Secretary Menon had with Pakistan Envoy Shahid Malik.

“We have been actively engaged with India and pursuading to avoid conflict with Pakistan, give up idea of troops movement and resume the dialogue process,hurt badly by the Mumbai blasts of last November.” said an official on condition of anonynimity.

Sympathy is generally found here for the not-too-old democracy,although certain amount of disillusionment about government performance can also be felt but opinion leaders conede that problems were far too accentuated to have easy soloutions.

In conversation with official agencies, intellectuals and legislators during my three days of stay here, it was candidly clear that some result has atleast been achieved by the IMF loan of $ 3.6 billion,first tranche of a total of $ 7.6 billion pledged for two years.Experts here concede that rupee has been stabilised, and eonomy has shown signs of improvement.

However. policy makers here seem to agree that the new government which took over last year in March, needs to be much more active in its policy framing and exeutions than it has been so far. These Amerians do not however comment on the internal situation in Pakistan, showing great interest though in NWFP situation. When reminded that the newly formed friends of Pakistan consortium has been a major disappointment so far, and that nothing has ome out as yet despite two meetings in New York and Dubai they replied that it takes time to process requests,but the coming meeting will be fruitful.

Pakistan needs more than 13 billion dollars to bail itself out from the morass it has been in for more than a year, but such a huge amount apppears a distant dream. Islamabad foreign policy experts have been naive enough to evoke a negative reply for cash even from a brotherly country like Saudi Arabia.

There seems a deep distrust in government’s ability to invest in projects because of corruption stories about Pakistan. However many countries are ready to finance projets provided their feasibiity is good. It is not a very happy situation but bitter facts sometime need to be accepted as reality and swallowed.

Similarly, the government apathy towards multitude of problems, absence of poliy framework so far too is causing anxiety here and in some other major capitals of the world.

 

[Neo]

CPI inflation stood at 23.34pc in December ​

Sunday, January 11, 2009

ISLAMABAD: The Consumer Price Index (CPI) inflation during December 2008 stood at 23.34 per cent that decreased by 0.50 per cent from November 2008, when it stood at 24.68 per cent.

Last year, in December 2007, CPI-based inflation was recorded at 8.79 per cent, the Federal Bureau of Statistics' (FBS) latest CPI snapshot available with The News showed on Saturday.

Furthermore, during the first-half (July-December 2008-09), average inflation stood at 24.43 per cent while Wholesale Price Index (WPI) stood at 27.98 per cent. Last year during the same period, CPI stood at 8.01 per cent and WPI at 10.26 per cent.

Huge increase in WPI-based inflation indicated further hike in retail prices of essential commodities. The rising inflation is also making it more difficult for pensioners and low-income masses to live on their nominal fixed income.

The most depressing aspect of CPI bulletin was that, food inflation during December 2008 stood at 27.92 over December 2007. Another factor responsible for worsening the situation is the dwindling value of Pakistani rupee that touched the lowest as a result of huge current account deficit.

It is worth mentioning that during the last six months rupee depreciated by about 32 per cent and is now trading in the open market at about Rs80 a US dollar.

This also has pushed up prices of essential commodities and made imports costlieróanother contributing factor for inflation. At the moment, the government looks helpless to rein in the spiraling inflation and save rupee from free fall. Huge price pressure of necessary kitchen items compelled households to struggle for meeting the minimum standards of living and they might have no choice but to cut down their expenditures on health and children’s education.

CPI that covers the retail prices of 374 items in 35 major cities reflects roughly the changes in the cost of living of urban areas.

According to it, in December 2008, fuel and lighting charges went up by 29.53 per cent, food and beverages by 27.92 per cent, transport and communication 25.71 per cent, clearing laundry and personnel appearances 19.77 per cent, house rent 17.56 per cent, education 17.01 per cent, apparel textile and footwear by 15.72 per cent, household furniture and equipments 14.61 per cent.

Medical expenses increased by 12.67 per cent and entertainment by 12.58 per cent over December 2007. Interestingly, the government has reduced oil prices about 40 per cent in the local market but unfortunately due to the government’s lousy governance, it was not translated into lowering transportation cost. Transporters have not reduced its fares and are making unlawful profits. Communication charges are almost the same as were in the period when the oil prices were at the highest ebb.

Independent economists believe that declining prices of crude oil in the international market would help decrease cost in the coming months unless its impact was passed on to the consumers. It is interesting to mention that for each one per cent increase in inflation, more and more Pakistanis fall into poverty indicating that inflation was hitting poor Pakistani consumers harder than the more affluent ones.

Specifically, the poor are highly sensitive to the price changes in food, particularly staple food items. Despite their adverse impact on the low-income group, no effective steps are being taken by the government to reverse the trend.

The government seems to be indifferent to the plight of the poor and the lower middle class who find it increasingly difficult to make both ends meet with soaring prices of foodstuff and medical expenses.

It is interesting to note that high inflation trend in food has been noticed since the start of the last fiscal (July 2007), food inflation stood at 8.47 per cent, August 8.62 per cent, September 12.97 per cent, October 14.67 per cent, November 12.47 per cent, December 12.21 per cent.

In January, 2008 it stood at 18.25 per cent, February 16.05 per cent, March 20.61 per cent, April 25.5 per cent, May 28.48 per cent, June 32.05 per cent, July 33.81 per cent, August 34.09, September 29.91 per cent, October 31.67 per cent, November 30.44 per cent and now during the month under review (December 2008), it stood at 27.92 per cent.

 

[Neo]

Trade deficit rises to $9.56bn in first half ​

Sunday, January 11, 2009

ISLAMABAD: The country’s trade deficit rose to $9.56 billion in the first half (July-December) of 2008-09, up 15.27 per cent (or $1.26 billion) from $8.29 billion recorded in the corresponding period of last fiscal, the Federal Bureau of Statistics (FBS) reported on Saturday.

According to the latest snapshot of trade activity, imports were recorded at $19.13 billion in the six months, more than double the exports worth $9.57 billion. During the same period in 2007-08, imports stood at $16.95 billion and exports at $8.66 billion. That depicted 12.87 per cent growth in imports and 10.57 per cent in exports.

One interesting and encouraging aspect of the data was that during December 2008 the trade gap, though widened to $815.93 million, was 31.8 per cent less than the shortfall of $1.196 billion in November 2008. During the month, imports dipped 21.92 per cent to $2.126 billion and exports fell 14.18 per cent to $1.53 billion over the previous month (November 2008).

In December 2008, the trade gap dropped 20.67 per cent from $1.028 billion recorded in the same month last fiscal. Exports were down 0.70 per cent from $1.32 billion in December 2007 while imports fell 9.45 per cent from $2.35 billion.

The trend of trade activities during December raised the prospect of a slow-down in the pace of runaway deficit as imports fell appreciably. If the current scenario stays and economic planners are able to take reasonable measures for bridging the gap, it would be one of the major winning points to celebrate.

For the last many years, the country had been confronted with the trade deficit which pushed up the current account deficit. Depreciating rupee and record high inflation are other big factors which have worried economic policy-makers.

The government in its trade policy for the current fiscal year has set export target at $22.1 billion. Although it has not formally announced any import target, commerce ministry’s officials say it will touch $37 billion, leaving a gap of $15 billion by June-end.

 

[Neo]

FPCCI urges Joe Biden for free market access ​

Sunday, January 11, 2009

LAHORE: Federation of Pakistan Chamber of Commerce and Industry, a top body of chambers in the country Saturday urged the visiting US Vice President elect Joe Biden to proclaim lifting of all economic sanctions to provide direct free market access to Pakistani exporters, especially in textile and garment sectors.

President FPCCI Tanvir Ahmad Sheikh, all federation VPs and founder Chairman Pak-US Business Council and Vice President SAARC CCI Pakistan Chapter Iftikhar Ali Malik said in a statement issued on behalf of the business and traders community of Pakistan.

Tanvir said that President Asif Ali Zardari and Prime Minister Syed Yousaf Raza Gilani had always attached great significance to further developing strong and tough affable friendly relations with USA. He said Joe Biden should also reciprocate these sentiments by lifting the economic sanctions. He said Pakistan is suffering from $6 billions loss annually in its economy due to the war on terror.

He said the United States Chamber of Commerce (USCC) has always been urging for augmented and sturdy business relations with Pakistan. He said the USCC is the most vital channel for contacts in the US for the promotion of trade ties between the two countries.

He said Pakistan is a budding market, rich in opportunities for US investments as the US is one of Pakistan’s important trading partners. Tanvir said Pakistan in prevailing scenario will persist to fight against terrorism world over, as Pakistan itself had been the victim of terrorist activities. He said western countries and media must understand that the religion Islam is a widespread religion which tightly believes in peace, international brotherhood and equal rights for all human beings irrespective of their cast, creed and colour and sturdily condemns the acts of terrorism.

Iftikhar Ali said there was a need for presenting Islam in its true viewpoint in the US and appealed to President elect Barack Obama to disperse wrong philosophies credited to religion which has vitiated the atmosphere and spread fright and distrust.

This he said was essential to reinstate the relationship to the level of pre 9/11 days. He said the establishment of good working relations between the US and the Muslim Ummah would direct to attaining world peace and bring back mutual confidence.

He said Islam is being distorted and portrayed in a way wholly divergent to its teachings. He said now South Asia is becoming the hub of international economic activities and it is time the US President elect and VP elect Joe Biden to implement their sphere of authority to help restore peace in South Asia which would have an optimistic impact on the world peace.

He said peace can be restored with ruling an enduring solution to two long positioning issues of Kashmir and Palestine.

He said that Prime Minister has been reiterating that Pakistan is a peace loving country and wants to live in peace with all its neighbours. It also wants resolutions to all issues through dialogues.

Iftikhar Ali said the lifting of economic sanctions would result in direct access to US market and help enhance economic ties between the private sectors of two countries.

 

[Neo]

Positive economic news take KSE to 24-week high ​

Sunday, January 11, 2009

KARACHI: The Karachi stock market turned positive this week on the back of investment-friendly news, which helped revive interest and put to an end a long period of depression.

The benchmark KSE 100-share index continued its upward momentum throughout the week and crossed 6,000 points. The index rose 6 per cent from the previous week to close at 6,143.81 points, a 24-week high.

The free-float market capitalisation-based 30-share index surged 437.39 points or over 8 per cent to 5,778.61 at the end of trading week on Friday.

Volume in the ready market showed a substantial improvement over the week as strong activity was seen in top-tier stocks as well, after thin trading in most of these shares since the lifting of index floor on Dec 15 last year, said Atif Zafar of JS Research.

Average daily volume in the ready market was recorded at 173.6 million shares compared to 108.99 million, showing a handsome increase of 59.3 per cent from the previous week.

Market capitalisation rose Rs94 billion to Rs1.936 trillion. Foreign portfolio investors, however, withdrew over $25 million during the week.

Energy stocks led the rally with exploration and production (E&P) sector up 14.5 per cent, independent power producers (IPPs) 12.2 per cent and refineries 10.5 per cent. It was driven by value-hunters seeking double-digit dividend yield and renewed government commitment to end the thorny issue of inter-corporate debt, said Muhammad Saqib Sajjad of KASB Securities.

Although oil marketing companies (OMCs) were among laggards, Friday’s news about upward revision in marketing margin from 3.5 per cent to 4 per cent provided much-needed boost. On the macroeconomic front, a high-level meeting to improve energy supply remained the focus of attention. The government also approved Petroleum Exploration and Production Policy 2009 on Friday. Moreover, the finance adviser’s statement ruling out further hike in discount rate also enthused investors, he added.

He advised investors to work in E&P, IPP and fertiliser sectors as they had strong balance sheets, offered double-digit dividend yield and had less exposure to cyclicality.

He expected that higher oil marketing margin coupled with positive moves to tackle inter-corporate debt should revive inventor interest in OMCs as well.

The economy has started showing some signs of stability on both fiscal and external fronts, supported by a fall in inflation based on the Sensitive Price Index (SPI). However, political developments both on the domestic and international fronts would continue to haunt the government as well as the private sector. Key external events would be the visit of US Vice President-elect Joseph Biden to Pakistan and developments in Pak-India relationship, he added.

During the week under review, PICIC Growth Fund, Standard Chartered Bank, Faysal Bank, KESC and WorldCall Telecom were major gainers while Mybank, Pakistan Services, Shell Pakistan, Dawood Hercules and Al-Ghazi Tractor were major losers at the Karachi bourse.

 

[Neo]

AEDB to help set up 10MW renewable energy plant ​

Sunday, January 11, 2009

ISLAMABAD: An American firm Sheladia would undertake a viability study for generation of up to 10 megawatts (MW) of electricity from solid waste in Karachi under a US-funded project.

Funds for the study would be channelled through Alternative Energy Development Board (AEDB), the focal point for promotion of renewable energy resources in the country. An agreement to this effect would be formally inked next week between Sheladia and AEDB.

The firm plans to commence the $325,000 project shortly, which would be concluded in about five months. It has been asked to complete the waste management study, defining the best options for converting it to energy and preparing required tender documents for the power plant. The plant will then be set up under public-private partnership.

AEDB Chief Executive Officer Arif Alauddin, speaking after a briefing held in connection with the feasibility study, said all efforts would be made to get it completed on a fast track.

“It is really encouraging to note that an agreement between AEDB and Sheladia would be signed in a week’s time for conducting the study for producing 5-10MW through solid waste, which will not only expand electricity production sources, but would also make modest contribution to reducing the energy deficit facing the country,” said Richard O’Shea, representing the US Consulate General and USTDA.

Alauddin said it will be the first study of its kind and the project when implemented will become a model waste to energy project for other cities to follow. “Not only such a project will administer local waste, it will also add to power generation, lessen load-shedding and utilise renewable energy resources for increasing the security of energy supply.”

The CEO said AEDB was working on expeditious development of renewable energy resources in the country and the First commercial wind farm established by M/s Zorlu would be inaugurated in about two weeks. Karachi City Nazim, Syed Mustafa Kamal welcomed the AEDB initiative and called it appropriate. He guaranteed AEDB of absolute support of his office to certify that the study is completed in time and is of the topmost eminence.

Mustafa Kamal stated that he considers Solid Waste Management an imperative bustle for Karachi and has been functioning on fast tract on this for some time. He stated that he had set up 8 stations to ensure that the waste is collected in these centres during the day and is transported to the dumping site in the night, where the traffic is thin. Karachi having a population of 18 million produces 10,000 tonnes of solid waste daily. Power generation through waste would not only facilitate cut down the electricity deficit, but would also help in addressing the issues of pollution.

 

[Neo]

Country’s tea imports decline by 19.8 percent​

KARACHI: Pakistan imported 5332.46 metric tonnes (MT) black tea at a value of $10.0 million during the month of December 2008, as compared to 7982.43 metric tonnes imported in December 2007 at a value of $14.1 million.

According to the numbers provided by Pakistan Tea Association (PTA), the country registered a decline of 19.8 percent in the imports during the said period.

Pakistan imports tea from 21 countries and the major portion is imported from Kenya. During the said month 60.60 percent of the total quantity of tea was imported from Kenya as compared to 62.60 percent imported in the corresponding period last year.

Total 51.80 MT green tea was imported at a value of $7.7 million as compared with 51.27 MT imported at a value of $6.7 million in the same period of 2007.

Pakistan meets its green tea requirement from five countries in which Indonesia and Vietnam take the lion's share. This year 62.16 percent and 37.84 percent of the total quantity of green tea was imported from Indonesia and Vietnam respectively. Chairman Pakistan Tea Association (PTA) Hanif Janoo giving his comment on the cut in tea import, said that despite a decline in tea import, consumption of tea has increased.

According to PTA, there is a natural increase of about 4 percent in tea consumption but traders and importers have attributed the increase mainly to the aggressive market strategy adopted by the tea companies by targeting new markets, which has also given a boost to the business of unbranded tea.

He said that now the country uses about 170 million kg of tea annually as Pakistan is the third largest importer of tea in the world, but around 70 million kg tea is also being smuggled into the country through Afghan Transit Trade, that is not only hurting the official import but also creating difficulties to fulfil local demand. In this situation, the ratio between tea imports through legal and illegal channels is said to be equal.

The government is annually losing $50 million to $80 million revenue due to tea smuggling through Afghanistan, he added.

The price of imported one kg tea bag, depending on grade, was $1.75 in the last fiscal year, while the same now is available at $2.75. The main reason of this increase is that the importers have to pay 16 percent general sales tax along with income tax and customs duty as well, sources said, adding that the illegal tea traders pay nothing to the government.

 

[Neo]

Pakistan lobbying for new avenues to gain EU access: Baig​

KARACHI: Following the failure of the country to qualify for the Generalised System of Preference (GSP) Plus scheme for market access to the European Union, a new scheme—GSP Democracy—is under consideration for securing market access to the 27-member EU block.

Adviser to Prime Minister on Textile, Dr Ikhtiar Baig told Daily Times on Saturday that since the democracy is restored in the country, market access should be given as a “democracy dividend.”

Dr Baig said that extensive lobbying for the success of this venture is being done. “ I held meetings with EU Trade Commissioner in Pakistan a couple of days ago and advocated for duty free market access to the EU.

Further, I would be leading a delegation to Brussels in the first week of next month to hold meetings with the concerned quarter in the EU capital for this purpose, he said. Also, the ambassadors of Netherlands, France, Italy, Turkey, Germany and UK in Pakistan assured their full cooperation to help Pakistan for accomplishment of this objective, he revealed.

It is pertinent to mention that European Commission has denied Pakistan the duty-free access for thousands of products under the GSP Plus scheme 2009-2011. Textile, leather and carpet industries are the worst affected by this barrier to entry in the EU markets.

The European Commission has granted GSP Plus status to Armenia, Azerbaijan, Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Honduras, Mongolia, Nicaragua, Paraguay, Peru, Sri Lanka and Venezuela.

Pakistan lost the case of GSP Plus qualification owing to its failure to meet the criterion despite the fact that for the past couple of years, intense efforts at diplomatic level were carried out. This has been termed the trade diplomacy failure of the country in convincing the EU for grating this status to Pakistan. Pakistan lost the access by a narrow margin-with only one vote- when Germany opposed Pakistan for this scheme, advisor pointed out. However, he said that positive signals are emanating from the EU side and hoped that country would be able to receive some “good” on this front.

Pakistan is front line state of the west in its war on terror, however, the western capitals seem to be least interested to grant the country any sort of concession on trade front despite Pakistan’s effort for market access.

“At the friends of Pakistan forum, this proposal will also be advocated. We need the long-term benefits for the country in the shape of market access rather than merely receiving the cash, which could is short-lived,” Dr Baig maintained.

 

[linkinpark]

Friends of Pakistan meeting postponed
Some friends critical of Islamabad’s ill-preparedness

Shah Hasan

Islamabad—The much-trumpeted meeting of Friends of Pakistan, earlier scheduled for January 12-13 here has been postponed and now it will take place some time in early next month.

According to a senior official in one of the economic ministries that the FoP’s meeting has been postponed as Pakistan was not still prepared and needed to do some homework in detail as Islamabad wants to include new projects of paramount importance from social sector, education and health in the next meeting.

With a view to finalizing the projects, Planning Commission is currently in consultation with various ministries and the objective would achieve in the inter-ministerial meetings some time the last week of January.

Pakistan earlier in Abu Dhabi meeting on November 17 had placed about 71 projects of $ 60 billion, which drew a lot of criticism from some of the member countries in Friends of Pakistan’s forum. Japan took stern notice in Abu Dhabi meeting of ill preparedness of the officials of Pakistan, clad in precious dresses with costly wristwatches in their, who poorly presented the case of the country in the meeting seeking help to steer Pakistan out of economic morass.

According to a letter communicated to Finance Ministry, Tokyo through the economic minister in Pakistan’s embassy expressed its reservations about the Abu Dhabi meeting saying it seemed that Islamabad came with shopping list as it marketed about 71 projects without any preparation.

Japan also noted that top officials in Pakistan’ delegation did not come up with preparedness and there was no presentation made in the meeting which should be based on figure and facts. Tokyo also noticed that Pakistan floated some projects on which Japan is already working.

Keeping in view the reaction of Japan and other member countries with regard to poor homework, now Pakistan authorities have decided to take more time and the projects, which are to be flouted other than the early 71 projects should be presented in the meeting along with feasibilities and detailed engineering.

Pakistan earlier sought cooperation from FoP in the field of alternate & renewable energy sources, petroleum and oil exploring industry, heavy mechanical industry, electronics, E- governance and E-commerce, Oceanography, Biotechnology and information technology and telecommunication.

For establishment of universities of Engineering, Sciences and Technology Pakistan needs financial assistance of $ 542 million from China, $ 543 million from Germany, $ 519 million from Austria and $469 million from Italy.

Pakistan had also placed the demand seeking investment in projects of national importance that mainly include Thar Coal Project, Munda Dam, Hingol Dam, National Trade Corridor, Gharo-Keti Bandra Road, Connectivity of Gawadar Port, Up gradation of KKH (Mensehra-Sazin section of 258 km), Realignment of KKH (Bhasha Dam site-Railkot Section of 141 km), Bhasha-Diamer Dam. Pakistan also sought investment for 30 small and medium dam across the country.

In agriculture sector, Friends were briefed that Pakistan needed $ 2 billion investment in various initiatives which include the value addition in horticulture and dairy, strengthening agriculture research, rain harvesting, drip irrigation, farm forestry, farm mechanism, food grain storages and social sciences research in agriculture sector, crop monitoring and forecasting.

Pakistan placed the demand in Abdu Dhabi of $ 750 million assistance from Friends of Pakistan for implementing Madarasa Reforms as a part of the drive to erase the extremist tendencies in the seminaries students.

World Bank Trust Fund for FATA has also been established basically to help enhance the capacity of Pakistan’s security forces to combat terrorism and extremism.

 

[Neo]

Work on $4 billion refinery at Lasbela likely to start soon​

KARACHI (January 11 2009): Board of Investment Chairman Saleem H Mandviwala on Saturday informed the business community that work on setting up of a refinery at Lasbela at an estimated cost of four billion dollars is likely to start soon. Speaking at a meeting of Lasbela Chamber of Commerce and Industry at the chamber here, he said that during his visit to the UAE along with the Prime Minister, the issue was taken up with the interested parties.

He said the government has already allotted 1200 acres land for the proposed refinery. The investors are asking for more land for the refinery. He said that during his stay in UAE, the issue of cement plant also came under discussion with investors and they agreed to restart it during 2009.

The chairman recalled his visit to Italy and said that the Italian companies have shown interest in developing 'Marble City' and marble training institute in Lasbela.

Referring to a demand of setting up of 'Seafood City,' he said that the possibilities could be examined. The chairman said that Japanese investors have shown interest in introducing corporate farming in Pakistan. The issue will be discussed with the government of Balochistan for allotment of land for this purpose.

He said that the government is examining possibilities of reducing taxes. Replying to a question during a chat with newsmen after the meeting, he said that a number of units are closed in Hub industrial estate owing to variety of reasons. The government is ready to provide all possible facilities to revive these units, he added.

Replying to a question about electricity crisis, the chairman said that efforts are under way to overcome energy crisis and hoped that the government will succeed in achieving its targets in shortest possible time. He said the government is expecting around 30 billion dollars investment in energy sector in next 10 years.

The chairman said that a firm has proposed setting up of a shipyard at Gwadar. The chairman did not agree with questions of having another port at Sonmiani and saying that due to shallow seabed, it may not be possible. About tourism, he said that tourism is a different area. This area also has perception problem. However, this is an area where investment can be made attracted.

Representative of Hub Power Company, Aziz said that the company is facing serious finical problems due to non-payment of Rs 52 billion by different organisations. He said that 1200 MW power may go out of the system if these organisations failed to make payments.

Saleem H Mandviwala assured the representative that he would arrange a meeting of the company with the Prime Minister's Advisor on Finance to resolve the issue. Lasbela Chamber President Dr Muhammad Aslam suggested that in order to facilitate the industrial investment in the region, the import of plant, machinery, accessories and raw material be declared as zero-rated which will help boost the industrialisation. He suggested that Hub Town is the most suitable place for setting up of Japanese Investment Zone.

 

[Neo]

Canada to double C$60 million Cida assistance to Pakistan​

ISLAMABAD (January 11 2009): The Canadian government has decided to double Canadian International Development Agency (Cida) assistance for Pakistan to 60 million Canadian dollars, mainly for local government, basic healthcare for girls and primary education. In addition, Canada will also support projects under the Friends of Pakistan Forum.

This was stated by Canadian Federal Minister for Citizenship, Immigration and Multiculturalism Jason Kenney during a meeting with Foreign Minister Shah Mahmood Qureshi here on Saturday. The escalating tension between Pakistan and India aroused after the Mumbai attacks also came under discussion.

The Canadian Minister expressed the hope that both Pakistan and India would be able to overcome the current tensions and resolve their differences peacefully. Besides, the two ministers also discussed various aspects of Pakistan-Canada bilateral relations with particular reference to immigration issues, employment of Pakistani manpower in Canada, investment in Pakistan, the role of Pakistani community in Canada, regional situation and other issues of mutual interest.

Qureshi appreciated the continued Canadian assistance to Pakistan for human resource development and capacity building. He also appreciated co-operation between the two countries for improving border management between Pakistan and Afghanistan.

 

[Neo]

Pak-US talks on energy start in Washington on January 12​

ISLAMABAD (January 11 2009): Pakistan and the United States of America (USA) will hold a two-day energy dialogue on January 12-13 in Washington in which Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain will give presentation to the US investors on new Petroleum Policy 2009.

Sources said that Pakistan wants to explore the indigenous oil and gas resources, and the government has offered incentives in the new approved Petroleum Policy to attract investors. Asim will brief US investors about the incentives announced in the oil industry.

Under the new policy, all local and foreign companies presently operating in Pakistan will be eligible to acquire exploration rights. Foreign companies not operating in Pakistan, but having operated concessions in other geographical areas of the world, will also be eligible to acquire petroleum exploration rights subject to demonstration of technical and the financial capability.

The government has simplified bidding and pre-qualification process, and the processing period has been reduced. Bids evaluation process has also been simplified to attract investors.

Pakistan has huge oil and gas reserves but there is no new activity for the last many years. Balochistan has also huge reserves of copper and gold whereas Sindh province has huge reserves of coal also. Government is working on the use of coal reserves for power generation purposes and US investors would also be invited during the energy dialogue to make investment for exploring mineral reserves and involve the oil and gas exploration activities.

Sources said that during talks in Tehran on Iran-Pakistan-India (IPI) gas pipeline project on December 29-30, Iran had sought the gas price which is not affordable for Pakistan. Now the government is making efforts to explore indigenous oil and gas reserves so that the country's energy needs could be met.

Government estimates of unexplored oil and gas reserves are 9 billion barrels oil and 80 trillion cubic feet gas in Balochistan province. Balochistan is of the view that these oil and gas resources should be explored to enhance its share of royalty.

"If only 5 percent of the said oil and gas reserves would be explored, Balochistan would receive additional royalty of Rs 25 billion on both oil and gas per annum. The province would have an additional royalty of Rs 11 billion on oil and Rs 14 billion on gas reserves per annum. Balochistan government is of the view that gas production in Balochistan has been reduced to 23 percent of total production which was 53 percent in 1990. Sindh province is producing 70 percent gas, Punjab 5 percent and North-West Frontier Province (NWFP) 2 percent. The incentives announced by the government would encourage the investors to come forward for investment in oil and gas sector in Pakistan, sources added.