Pakistan Economy - News & Updates - Archive

[Pk_Thunder]

Innovation must to set up knowledge based economy: ICCI President ​

ISLAMABAD, Feb 3 (APP): President Islamabad Chamber of Commerce and Industry (ICCI), Mian Shaukat Masud here on Tuesday stressed the need for adopting innovation to compete effectively in the competitive global environment.

Addressing at national workshop on “Innovation Survey oaf the

Industry”, he said that research and development play a vital role in adopting innovatory approach.

The one day workshop was organized by Directorate of Science and

Technology (DST) NWFP in collaboration with ICCI, said a press release

here on Tuesday.

Mian Shaukat stressed upon the government to support the research

and development, arguing that the world was heading towards

knowledge‑based economies and innovation was the first step for moving towards this goal.

He was of the view that adopting innovation in industrial sector

would enable the country to get multiple benefits as innovation was often seen an important factor in boosting economic growth besides contributing towards productivity, market share, value adding and employment

generation.

“Technology is changing fast, new products are coming up from new

competitors, products lifetimes are shortening while customers have become more sophisticated and demanding,” he remarked.

He said that Industrial sector would have to double its efforts to

adopt the concept of innovation and spend more on research and development to cope with all these challenges.

He lauded NWFP DoST for undertaking innovation survey of the

industry and expressed the hope that the survey results would contribute positively to raising innovation activities in industrial sector by

creating better awareness about the importance of this approach.

Speaking on the occasion, chief guest, Ghulam Dastgir, Chairman

Sarhad Development Authority, Peshawar stressed the need for employing

more scientists in industrial sector for promoting innovation in business processes and products.

Earlier, representatives of DoST gave a detailed presentation on

Innovation survey on Industry in NWFP.

 

[Pk_Thunder]

‘FDI in Pak showing postive trend’ ​

LAHORE, Feb 3 (APP)‑ Foreign Direct Investment (FDI) in Pakistan is showing a very positive trend and the investment situation is not as hopeless as being painted some elements.

This was stated by Secretary Board of Investment (BoI)

Tariq Iqbal Puri while briefing the LCCI President Mian

Muzaffar Ali on investment scenario in Pakistan on Tuesday.

LCCI Senior Vice President Tahir Javaid Malik, Vice President

Irfan Iqbal Sheikh, former Presidents Tariq Hameed, Mian

mohammad Ashraf, Mian Misbahur Rehman, former Senior Vice

Presidents Abdul Basit, Yaqoob Tahir Izhar and former Vice

President Sheikh Mohammad Arshad were also present on the

occasion.

The BoI Secretary said that only because of huge

undiscovered potentials in Pakistan and for having a unique

food basket, a number of foreign investors are ready to come

to Pakistan.

Tariq Iqbal Puri said that business community needs to

understand that economic issues being faced by the country

were not going to stay for long and hopefully the situation

would take a positive turn in next eight to nine months.

He said that the BoI, in collaboration with the government,

is finding out sustainable and economically viable solutions

to the challenges being faced by the business community.

The Secretary said that special attention was being given

to law and order and smooth supply of electricity. The restoration

of confidence of the business community is another area which is

on the priority list of the government, he added.

He said that special economic zones were being carved out

to attract direct foreign investment.

Speaking on the occasion, the LCCI President Mian

Muzaffar Ali said that drastic cut in government expenditures

and enhanced productivity were the answers to the liquidity

crunch.

He said that deteriorating law and order situation was

not only spoiling Pakistan’s perception but was also

discouraging much‑needed foreign investment and calls for well

directed measures to control the situation which was getting

out of hand with every passing day.

Mian Muzaffar Ali said that government should focus on

increasing production on sustainable basis besides exploiting

fully the renewable energy resources to cope with the shortage

of energy.

The LCCI Senior Vice President Tahir Javaid Malik informed

the Secretary BoI that the automotive sector was in bad shape

and the local businessmen attached with this sector should be

given protection.

 

[Pk_Thunder]

Pakistan, Jordan agree to sign FTA​

Updated at: 2135 PST, Tuesday, February 03, 2009
ISLAMABAD: Pakistan and Jordan have agreed to sign Free Trade Agreement (FTA) to deepen their existing economic and trade relations.

A Pakistan delegation will visit Jordan in March this year to formally start negotiation to this effect. This reflects the strong desire of their respective governments, bringing their economic ties at par with excellent diplomatic partnership.

The two countries are moving ahead on a fast track to broaden their multi-dimensional strategic partnership, particularly in defence production and business sectors, said Ambassador of Jordan Dr. Saleh Ahmad Al-Jawarneh who called on President Asif Ali Zardari here.

He told that President Zardari has accepted the invitation for participating in the meeting of World Economic Forum (WEF), scheduled to take place in Jordan from May 15 to 17, and expressed his desire to bringing their ties to a new height, meeting the common aspirations of their people.

The invitation was extended to him on behalf of King Abdullah bin Al-Hussain. The Ambassador said that WEF moot will offer a fresh outlook at new economic opportunities and on the evolving political challenges in the region.

 

[TopCat]

how is inflation in bangladesh sir.?

I think its 6.5% now but we had hit highest 11% once for few months.. Man that was really painfull for the poor people..

 

[Omar1984]

Local real estate unaffected by global recession

Friday, January 30, 2009
By Faryal Najeeb

KARACHI: The local real estate market remains untouched by the global recession, which shows no sign of easing and in fact has further threatened the world economy, because Pakistan does not practice house-building loans.

An expert in the housing and construction industry commented that the whole world, especially the west and UAE, was badly affected after the real estate sector collapsed.

KK Builders Chairman Munir Sultan said every fourth house in the west was at default mainly because banks had failed to secure loans and customers had failed to pay debts.

“However in Pakistan, loans are granted only for house purchase or renovation of houses and then again they are secured and guaranteed,” he added.

“The House Building Finance Corporation (HBFC) grants loans only to buy a project that has already been made. Where will a borrower go if the house is already standing and it can be auctioned off in case a customer turns into a defaulter?” he points out.

Sultan also stated the real estate meltdown had taken place in the west and the UAE as projects were being made purely on investment basis due to which there had been more of supply than demand. “In Pakistan, we already have a backlog of 8.8 million houses at the lower and middle income level, so if housing projects are introduced here, then usually there is a tremendous response to them too,” he enunciated.

He said: “Despite the fact that we bristle with the highest interest rates and lending rates, the shortage of houses always create a healthy demand in the market.”

He expatiated on the country had in some ways actually benefited from the global recession as the downfall in UAE markets had helped local investors and builders to return to the Pakistani market.

Yet, Sultan is cautious about the future of the local real estate market as “the government was making no attempts to cash in on the available opportunities and continued to ignore the gold mine they have.”

He said a housing policy had been made in 2001 but any implementation had not yet been made and neither had the policy been changed according to changing times. He said the government could aid to uplift the real estate sector but appeared to remain uninterested.

On the other hand, Head of Research at Pak real estate, Shahbaz Mukhtar said the real estate sector had slightly been affected by the recession.

He said developed residential areas had witnessed a minor change of up to 10 per cent whereas the developing areas had been affected by 15-20 per cent.

He stated: “This is rather insignificant for the real estate sector but nevertheless an adverse figure.”

He explained that the recession had led to prices remaining either stagnant or reducing as demand for properties also dipped. He voiced that many overseas Pakistanis had been affected by the recession and they had also not invested into the country.

Mukhtar said overall the country had also been hit by the recession which led to people either losing jobs or their spending power being limited and this consequently led to their taking out less money for property purchasing, thereby adversely influencing property prices.

Local real estate unaffected by global recession

 

[Neo]

GDP growth rate may drop below 1pc: official ​

Thursday, February 05, 2009

ISLAMABAD: Pakistan is feared to experience negative growth this year in all sectors of economy except the agriculture sector, a senior official at Ministry of Finance confided to The News.

Growth in agriculture sector is expected around 4.5 per cent depending on wheat production, if this target was missed the Gross Domestic Product growth rate would be even less than one percent, he said.

Pakistan experienced negative growth in 1952 and if the agriculture sector does not perform up to expectations, then once again the country would be exposed to negative growth of 0.3 per cent.

In the last fiscal year, the agriculture growth was 1.5 per cent and now the country is expecting 4 to 4.5 per cent growth, which is to be the only factor that would take the GDP growth into positive zone.

“We are expecting negative growth by the end of the ongoing fiscal in all sectors of economy except agriculture. The massive negative growth is to hit Large Scale Manufacturing (LSM) and Construction,” the official said keeping in view the preliminary estimates worked out with regard to the expected GDP growth by the end of ongoing fiscal.

“Electricity & and gas distribution, Transport And Communication, Wholesale and Retail Trade, Finance and Banking, Public Administration and Defence and Social and Community Services are also not likely to perform, but the Agriculture sector would be in the positive zone with no major positive impact on overall GDP growth,” he said.

The government is alarmed over the performance in the said sectors of economy and is all set to revise the targets of GDP growth, tax revenue, inflation and exports with International Monetary Fund (IMF) which has extended to Pakistan the 23 months $7.6 billion bailout package under Stand By Arrangement (SBA).

For the ongoing fiscal, the official said, IMF had earlier fixed the target of 3.4 percent GDP growth, 21 percent average inflation, 12 percent growth in export and Rs1,360 billion tax revenue.

Pakistan and IMF would revise the targets during the appraisal process by IMF review mission that is to be held in Dubai during February 14 to 24 period.

Pakistan and IMF would revise downward the target of GDP to about less than one percent, as the global economic outlook has entirely changed from the world scenario during the October-September 2008 period because of the massive decline in oil and commodity prices in the international market.

The official said that Large Scale Manufacturing has 19 per cent weight in GDP growth and it is expected to experience negative 6.5pc growth in this fiscal.

Construction sector with 2.7pc weight on GDP would witness six per cent negative growth against 15pc growth in 2007-08.

Electricity and gas distribution has 1.6pc weight in GDP and its growth is likely to decline 5.5pc from 14.7pc in last fiscal. Mining and Quarrying has 2.5pc in GDP growth and it is likely to experience 3pc growth in this financial year. “This means the overall growth in industrial sector would be in negative zone,” the official said.

Transport and communication sector growth dropped to 1.5pc from 4.4pc in last financial year. Likewise zero growth in wholesale and retail trade is likely to decline to zero per cent from 6.4pc in 2007-08. This particular sector owns the weight of 17 percent in GDP growth of the country.

Finance and banking sector depicting 17pc growth in last fiscal is expected to show negative growth of 4.5pc. The weight of this vital sector stands at 6.5pc in GDP.

The government is expecting status quo in growth of 3.5 percent in ownership of dwellings sector. This sector carries the weight of 2.6 percent in GDP growth. Public Administration and Defence, which has weight of 6.5pc in GDP is likely to witness 5pc growth against 10.9pc in last fiscal year.

 

[Neo]

UAE gifts 320MW power plant to Pakistan ​

Thursday, February 05, 2009

ABU DHABI: The United Arab Emirates on Wednesday inked a Memorandum of Understanding to hand over a 320MW gas-fired power plant to Pakistan to help meet its immediate energy needs.

The signing ceremony was witnessed by President Asif Ali Zardari who was here on a private visit. Minister for Water and Power Raja Pervez Ashraf inked the agreement with his counterpart from UAE Sheikh Dhiyab bin Zayed AlNahyan, who is also the Chairman of the Abu Dhabi Electricity and Water Authority (ADEWA).

UAE President Shaikh Khalifa bin Zayed Al Nahyan in his meeting with President Asif Ali Zardari in November last year offered the power plant to Pakistan as a gift, keeping in view the serious energy shortage the country was facing. The plant comprises 13 units, five of 16MW capacity and 8 of 30MW to produce 320MW of power and the government of United Arab Emirates will pay for the dismantling, packing and shifting of the plant to Pakistan.

Pakistan and UAE enjoy wide ranging ties and their leaders frequently interact to further strengthen their relations. The two leaders in their several meetings have agreed to enhance cooperation in all fields and open new avenues for mutual cooperation and partnership in different sectors.

After the signing ceremony President Zardari said the gift of the power plant was a goodwill gesture of UAE for the people of Pakistan and said it would greatly help Pakistan meet its energy needs. He said the people of Pakistan will always remember this precious gift and termed it a symbol of love and sincerity from the people and government of UAE.

He said the Pak-UAE relations will further boost and both the brotherly countries will help each other in energy sector in near future.

 

[Neo]

Economic indicators falling, planners seem unfazed ​

Thursday, February 05, 2009

LAHORE: Economic planners are acting like an ostrich feeling secure while all macro-economic indicators are on the decline including employment, current account balance, foreign exchange reserves, trade balance, industrial production, consumer price index and exports.

Experts are dismayed as economic policies are moving in opposite direction to those pursued by governments in competing economies while taking into account current global recession. The policies in place are meant to curtail growth when the economy is already in a deep recession.

Indian and Chinese central banks have cut policy rate to 5.5 per cent and 5.75 per cent respectively, showing a significant decline in the past six months. However, the State Bank of Pakistan has increased its policy rate to 15 per cent. Economic experts question how high policy rate would help overcome recession in the country.

“Economic managers are living in a fool’s paradise,” said senior economist Naveed Anwar Khan. He said the Board of Investment was happy that foreign direct investment had slightly improved from last year when political uncertainty was at its peak.

However, “none of the new investment has gone into green projects meaning no increase in productivity or employment. Moreover, there is a huge outflow of portfolio investment which depicts low confidence of investors in Pakistan’s economy,” he said.

He said the Adviser to Prime Minister on Finance, Shaukat Tarin, only two months ago was extremely satisfied with revenue generation. In fact, he added, he was anticipating an increase in revenues, but tax collection was below target and would likely fall further.

With crude and edible oil at one-third of the prices prevalent at the time of presentation of budget in June 2008, the import bill should have come down by $3.5 billion, he said, adding the State Bank governor seemed elated when in the monetary policy he predicted the import bill would drop by $1 billion this year. “This would not even cover the advantage obtained from the two commodities.”

Dubai-based chartered accountant Faisal Qamar said the government had weakened regulatory institutions which could have brought down inflation in accordance with ground realities. For instance, he said, the Competition Commission of Pakistan had been denied funds to run its day-to-day affairs. “Instead of using its energies to check cartels, the CCP is fighting for its survival as it does not have resources to work till March.”

The Securities and Exchange Commission of Pakistan, he added, had lost its grip on the capital market as stock prices were at lowest levels in the past five years but still there were no buyers.

He said there was internal dispute in the Federal Board of Revenue after the formation of Inland Revenue Department which merged the direct taxes department with the customs, sales tax and excise department. These experiments should have been left for some other time when economic conditions would be better, he suggested.

Canada-based certified public accountant Asif Ali Shahid said the high policy rate of 15 per cent had assured that small and medium enterprises did not get bank financing, adding it would mean almost no creation of jobs and further closure of SMEs which would leave the existing workforce jobless.

He said job opportunities for Pakistanis around the globe were also very bleak.

The United Nations had already warned that in the best case scenario 20 million jobs would be lost around the world in 2009 and in the worst case the figure would go up to 50 million.

“Jobs would have to be created within the country by giving a boost to productivity,” he suggested.

 

[Neo]

KSE crosses 5,500 points on investment-friendly news ​

Thursday, February 05, 2009

KARACHI: Investment-friendly news helped the Karachi bourse benchmark KSE 100-share Index breach through 5,500 points mark on Wednesday.

The KSE 100-share Index gained 149.38 points or 2.77 per cent to end at 5,534.25 points. The parallel running junior 30-Index rose by another 210.76 points or 3.99 per cent and closed at 5,494.04 points.

The bazaar opened in green zone and stayed there throughout the session. The step-by-step rising up stocks market hit intra day high of 5,542.26 points. A little profit-booking in the closing moments, however, adjusted market to the closing level.

Day traders and margin hunters were active in almost all the favourite sectors including energy, banking, insurance, fertilizer, cement and telecom on upper levels. About two-dozen stocks hit their upper circuit breaker of five per cent of Re1, which ever is higher. The upper locks were mainly seen in the banking, insurance and energy stocks.

Analysts said that the continuous relaxation to the financial sector from its regulator i.e. State Bank of Pakistan (SBP) kept inviting banking an insurance loving investors to the main arena.

“Following a 30 per cent benefit of Force Sale Value (FSC) on Non-performing Loans (NPLs) to banks last week, the SBP and Securities & Exchange Commission of Pakistan (SECP) have reportedly agreed to give another benefit to financial institution and that is to gradually write-off deficit on revaluation of listed equity investment, TFCs and Sukuk for over two years period,” said Ahsan Mehanti at Shahad Chamdia Securities.

According to another analyst the lowering of rate of return on 10-years Pakistan Investment Bond (PIBs), from 16.5 per cent to 14.75 per cent, shows that the financial system holds sufficient liquidity. Moreover, the reduction in PIBs rate would encourage liquated investors to invest in equity market, he added.

Hasnain Asghar Ali at Aziz Fidahusein says that the forthcoming petroleum policy, which is likely to carry more aggressive targets and incentives for prevailing and new investors, provoked energy investors to take his part in the on-going bullish rally.

But these days buying euphoria might prove of short-term nature, as these days investors are mostly speculators, who are mainly focusing on short-term capital gains and dividend yields, he foresaw.

Turnover in ready market enhanced to 205.563 million shares from 140.966 million shares traded a day earlier - showing a growth of approximately 46 per cent on day-to-day basis.

Future market also experienced a change of hands of 5,000 shares in this session.

The overall market capitalistaion rose by another Rs43 billion to stand at Rs1,746 billion.

The plus signed snatched the ruling power on board, as 178 stocks advanced into green territory, 101 stocks fell in red region, while the value of nine stocks closed unchanged.

Highest volumes were witnessed in NIB Bank at 17.605 million closing at Rs5.51 with a gain of six paisa, followed by DS Industries at 13.603 million closing at Rs3.52 with a gain of Re1, TRG Pakistan at 13.043 million closing at Rs1.54 with a loss of 14 paisa, Pakistan Telecommunication Company at 10.746 million closing at Rs15.46 with a gain of 17 paisa, and Oil and Gas Development company at 9.926 million closing at Rs14.78 with a gain of 27 paisa.

HOLIDAY NOTIFICATION: The Karachi Stock Exchange (KSE) will remain clsoed on Thursday, Feb 05, on account of Kashmir Day. The Exchange will reopen on Friday, Feb 06.

 

[Neo]

alarming situation: Country to confront 0.507bcfd gas shortfall in 2010​

ISLAMABAD: The energy experts forecast that gas shortfall would increase to 0.507 billion cubic feet per day (bcfd) in 2010 from the current year shortage of 0.192 bcfd with the shortfall further aggravating with the passage of time.

The gas shortfall would reach to about 10.340 bcfd by 2025 from 0.192 bcfd shortfall in 2009, sources told Daily Times here on Thursday. The total availability of natural gas for the year 2009 was forecasted at 4.346 bcfd and the total demand for natural gas was 4.538 bcfd in the same period. The indigenous supply of gas in 2010 was predicted as 4.309 bcfd and projected demand for gas would be 4.816 bcfd in the same year and the total shortfall would rise to 0.507 bcfd.

The projections further revealed that the indigenous gas production in 2015 would reach 3.671 bcfd and the demand would rise to 6.383 bcfd. By the year 2020, the estimated gas production would be 2.522 bcfd and the projected demand for gas would be 8.320 bcfd.

Similarly, by 2025, the projected indigenous gas supplies would be 2.167 bcfd and the estimated demand for gas would rises to 12.507 bcfd, showing a net shortfall of 10.340 bcfd.

The projections are based on fact that the supply of gas would decline gradually due to depletion in the existing resource base and no new discovery. The demand for gas would increase due to increase in its usage, increase in population, and expansion in gas utility connections to other parts of the country.

If proper action is not taken in time for increase in supply of gas either by increase in local discovery or through import like materialisation of IPI gas pipeline project the situation would become grave for both the domestic and industrial users. To meet higher demand for oil and gas, the government has to update the technology so that more exploration and production of gas could be made possible.

Sources further said that keeping in view gas shortage, finalisation of Iran-Pakistan-India (IPI) gas pipeline is of crucial importance. The IPI pipeline might be optimally used for power generation as it can produce 15 percent cheaper power than power generation through furnace oil. The use of IPI gas for domestic use would be costly, the sources added.

For increase in local oil and gas production, the Ministry of Petroleum and Natural Resources has set a drilling target of 100 wells for current year to increase local production of oil and gas. "We can double the oil and gas exploration by adopting the modern techniques."

Other main problem for drilling of more oil and gas are security concerns because most of the resources are available in provinces of NWFP and Balochistan where local and foreign investors are shy to invest, the sources added. The imported natural gas, even at Iran's latest increased price, remains economically the most feasible option as compared to other imported fuels such as furnace oil, LNG and coal, analyst opined.

 

[Neo]

Kuwait extends oil credit facility for one year​

ISLAMABAD (February 05 2009): The government of Kuwait has given extension to Pakistan in credit facility to import oil on deferred payment for 60 days for one more year, effective from January-December 2009. Earlier during the caretaker government, Kuwait had extended the credit oil facility from 30 days to 60 days, facilitating Pakistan to import oil on deferred payment effective from January 1, 2008 to December 31, 2008.

During the caretaker set-up, Pakistan petroleum minister Ahsanullah Khan had requested Kuwait to provide oil for 60 days instead of 30 days on deferred payment in a letter addressed on December 11, 2007. Petroleum Minister of Kuwait and chairman of Kuwait Petroleum Corporation, Mohammad A.Al-Aleem had responded to Pakistan government on December 25, 2007 and said that Kuwait government had granted the credit facility of additional 30 days to import oil on deferred payments.

Sources said that the present government had requested the Kuwait government to give extension of the said credit oil facility for two more years. However, the government of Kuwait approved extension for one year effective from January-December 2009. The government of Kuwait has formally informed the government of Pakistan about the extension in the said facility for one year.

Sources noted that the present government had also sought extension in credit oil facility from 60 to 90 days on deferred payment. But the government of Kuwait has restricted itself to 60 days credit oil facility for one year. The extension in said facility will help ensure uninterrupted oil supply to the country. Pakistan State Oil (PSO) under an agreement with Kuwait Petroleum gets the supply of diesel.

 

[Neo]

Pakistan calls for Japan's continued aid ​

TOKYO (February 05, 2009): A financial adviser to Pakistan's Prime Minister Yousuf Raza Gilani called on Japan Thursday to continue giving aid to Pakistan despite the global financial crisis, a press report said.

The adviser, Shaukat Fayaz Ahmed Tarin, explained his country's economic reform efforts during a meeting here with Japanese Finance Minister Shoichi Nakagawa, Kyodo News said.

Last November, Pakistan reached an accord with the International Monetary Fund that saw it receive a 7.6 billion dollar emergency financing package to help it deal with serious balance of payments difficulties.

Tarin told Nakagawa that his country's fiscal position had seriously worsened due to a delay in passing higher energy and food prices on to consumers, Kyodo said.

But he added Islamabad has implemented various reforms to tighten fiscal and monetary policies with support from the IMF, the report added.

He said conditions have since improved with lower inflation rates and a normalized stock market, but expressed concerns about expected declines in the country's exports and remittances from Pakistani workers abroad.

Nakagawa told Tarin that Japan plans to continue to help developing countries hit hard by the economic crisis through the IMF and World Bank, the report said.

Bilaterally, Japan extended yen-denominated loans worth about 500 million dollars to Pakistan in the year to March 2009.

Tarin unveiled a plan to set up a special economic zone in Karachi, which will possibly serve as a gateway to Central Asian and Middle Eastern markets for Japanese firms, the report said.

He also proposed the two countries jointly develop gas, coal and copper in Pakistan, Kyodo added.

Tarin is scheduled to meet with Prime Minister Taro Aso on Friday.

The Nikkei business newspaper reported earlier this week that Japan was inviting more than 10 countries to a meeting in late March or early April in Tokyo and that it would drum up billions of dollars in aid pledges.

"The Japanese government has this in mind. But its schedule and other details are not yet decided," Jun Matsumoto, the deputy chief cabinet secretary, said.

 

[Neo]

State of the economy​

EDITORIAL (February 04 2009): It was only a few months ago that Pakistan's economy was in a deep crisis. The twin deficits in the external sector and fiscal accounts were reaching unsustainable levels, inflation rate was at an alarmingly high level, foreign exchange reserves of the country were depleting rapidly and exchange rate of the rupee was almost in a free-fall.

The immediate insolvency threat appeared to be so real that the country had to chalk out a stabilisation programme and seek assistance from the International Monetary Fund in November, 2008. Although dark clouds on the horizon have not vanished altogether as yet but intensity of pressures in certain key areas of the economy have certainly eased and economic managers of the country are now showing greater confidence.

Talking to the media the other day after launching the ceremony of Pakistan micro-financing network (PMFN), Advisor to Prime Minister on Finance, Shaukat Tarin said that fiscal deficit during the first half of the current financial year was recorded at 1.9 percent as against the target of 2.0 percent due to increase in revenues and reduction in expenditures.

For Public Sector Development Programme, Rs 100 billion were disbursed up to December, 2008, around Rs 200 billion would be released in the second half of the current fiscal year and development funds amounting to about Rs 400 billion were still lying with the federal and provincial governments. Lack of capacity utilisation was the main reason for lower PSDP allocation.

The CPI had gone down by 1.34 percent during December as compared to the previous month and was expected to decline further in January, 2009. If the present price trends continue, the State Bank may not tighten the monetary policy further. The government would pass on the impact of decline in global prices to the consumers and would consider reduction in oil prices next month.

However, the government was bound to eliminate subsidy on electricity and there would be only a minimal increase in the electricity prices on this account due to drop in furnace oil prices in the international market. Foreign exchange reserves of the country had exceeded dollar 10 billion after inflow of dollar 500 million from China and dollar 101 million logistic support from the US, better placing the country to achieve exchange rate stability and meet current account deficit.

Although these gains would appear to be small or even insignificant to an ordinary person, but, comparing them with highly negative trends in the recent past, the turnaround in certain key areas of the economy had certainly reduced the chances of an economic meltdown and inspire the hope that the country would be able to overcome major challenges with the passage of time.

The positive turn of events could be attributed to certain favourable exogenous developments and the resolve of the authorities to stabilise the economy without caring much about political consequences of unpleasant decisions. A sharp decline in international prices of oil, steel and food products has eased pressure on the external sector of the economy. Consistent hike in oil prices was particularly proving to be disastrous for the economy.

On the domestic front, policy makers, first of all, reduced subsidies on major items substantially and then, very wisely, proceeded to negotiate a Stand-By Arrangement with the Fund to eliminate the insolvency threat. This calmed down the nerves of investors and other stakeholders to a certain extent. Monetary policy was tightened further to control emerging inflationary pressures.

All of these steps were difficult to implement at a time when most of the people were expecting relief from the government through provision of higher level of subsidies, the IMF was, by and large, seen with disfavour and the business class was asking for lowering the lending rates. While the government has been able to steady the ship to a certain extent, there are still too many problems to be confronted.

According to the latest estimates of the IMF, the recession was deepening and the world economy was expected to grow by only 0.5 percent in 2009, the weakest since World War Two. This would definitely have negative consequences for exports of the country but the worst hit could be home remittances that are a major source of our foreign exchange receipts.

The security situation in the country is far from satisfactory and the problem of circular debt is too severe to be resolved easily. Long-term political stability is still a dream despite the induction of a political government. These kinds of problems could greatly retard the stabilisation process if not resolved soon. In our view, political forces of the country and other stakeholders need to be aware of the risks involved and decide to be partners in building the economy for the welfare of the people.

 

[Neo]

Government urges Pakistani women to emigrate ​

By Sajid Gondal

Thursday, 05 Feb, 2009

ISLAMABAD: The Country’s first ever emigration policy talks about the ‘feminization’ of migration trends, and aims to substantially increase the prospects of emigration in the female workforce.


The Policy Planning Cell of the ministry of Labour and Manpower has finalised the draft of the National Emigration Policy 2009, coming up for approval by the cabinet.

The emigration policy is mainly focusing on regularization of recruitment processes, elimination of unsafe, exploitative and abusive emigration practices, welfare mechanism for emigrants and expansion of labour share in the traditional Gulf and European countries.

The policy draft says the share of Pakistani female workers in very low in the overall emigration, and it has to be substantially increased especially in occupations considered safe.

It has been explained in the policy draft that the non-availability of information was one of the major constraint which has restricted the women workforce to avail the available employment opportunities abroad.

Emigration policy has recommended establishment of task force ‘Market Research, Facilitation and Information Centre’ to focus on female employment abroad. The task force would design special programs for skill development in the areas widely demanded in world labor markets.

Chairman Policy Planning Cell Sabur Ghayur told Dawn that tapping work opportunities and promoting safe emigration along with protecting the rights of emigrants was the main objective of the policy.

Dr Ghayur said that the emigration flows from Pakistan recorded at 4.50 million during 1971-2008 have been mostly in the oil rich Middle Eastern countries. In the current decade, the number of workers going abroad was averaged 223,000 a year and the emigration exceeded 280,000 in 2007 and 430,000 in 2008, he added.

The emigration policy has been divided into 15 priority areas. The first priority area was emigration on the agenda of overseas visits of president, prime ministers and cabinet members. They high-ups would keep the promotion of overseas employment in their top agenda while visiting friendly countries.


The policy suggested organization of road shows to show-casing the qualities, education, skills of Pakistani workforce in the destination countries. Job fairs would also be organized to attract foreign companies to seek employees in Pakistan, it added.

Emigration policy also talked about country-specific strategies for each of the labour hosting country; initially for Saudi Arabia, UAE, Kuwait, Oman and Malaysia with active involvement of Pakistanis missions in the concerned countries.

The policy also suggests upward revision of the legal fee of the Overseas Employment Promoters (OEPs) and also imposition of strict penalties for those found over charging from their clients. It also suggested for increasing the security money of OEPs that could be utilized to compensate the overseas employees, incase of exile from host country by the fault of an OEP.

Emigration policy draft also asked for development of a mechanism that provides cost effective and easily accessible low cost remittance service for the Pakistani emigrants abroad.

It suggests simplification of procedure and one-stop services to facilitate the emigration of workforce. To do that one window operation facilities would be established in five major cities to speedily complete the emigration process of workforce. Policy said. Similarly, technical training centers — largely under public-private partnership, some exclusively for women, to impart skill development on trades in demand overseas.

The policy draft suggested forming a ‘deportee-friendly’ mechanism for deported persons possessing valid documents. By involving the ministry of interior, the overseas employment board would assist the worker in claiming his lawful dues from the employer as well as disposal of his belongings.

According to new policy the intending emigrants would be provided orientation and briefing before departure to destination countries. In these orientation sessions, they would be given briefing on their rights, working conditions, terms and conditions of employment, health related issues including HIV/AIDS and traditions and labour regulations of the host country.

 

[Neo]

$22.10 billion export target may not be realized​

Thursday, 05 Feb, 2009
By Sabihuddin Ghausi

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KARACHI: Trade analysts and exporters are doubtful of achieving government fixed export target of $22.10 billion during 2008-09 as in first half actual export proceeds during July-December 2008 are almost one billion dollars less than proportionate projection amounting to $10.54 billion.

Pakistan’s exporters would have to fetch about $2 billion plus every month for next six consecutive months to achieve $22.10 billion target.

An analysis of last six months shows that highest export earning of $1.87 billion was achieved in the first month of July which was almost 28 per cent higher than exports in July of 2007.

‘Fall in value of Pakistan’s rupee caused a rise in exports during July after which export proceeds showed a fall every month in the last five consecutive months. The total accumulated shortfall in target is close to one billion dollars and exporters would have to earn $12.5 billion in the next six months which seems to be an impossible task. The task is impossible because production cost has gone up manifold rendering us uncompetitive in world market,’ explained Shabbir Ahmad, a leader of textile industry, and the second reason he gave is because of erosion of purchasing power in Europe and US because of severe recession.

‘Never before in the last 61 years, Pakistan’s business was so hard-pressed as it is now and it is being ignored by the elected decision makers,’ a well known senior garment exporter remarked angrily who wondered how and why people, like Makhdoom Amin Fahim and Rana Farooq Khan, have been given the job to look after commerce and textiles when none of the two has any understanding of basic issues of their jobs.

No businessman in Karachi said whether Makhdoom Amin Fahim met any of them individually or in group, the Textiles Minister is said to have held a few meetings with textile exporters in Karachi, Lahore and other places.

But his response to the issues was rhetoric that lacked substance.
While the political leadership assigned to take care of business issues is found wanting in job orientation, frequent changes at bureaucratic level has shaken confidence of workforce in the business service institutions.

Frequent top-level changes in ministries of finance, commerce, textiles, industries and institutions, like Trade Development Authority (TDAP), have shaken confidence of lower cadre officials who are left guessing who and what next?

‘No one in the government understands the serious implications of 10.5 per cent fall in export earnings and a six per cent drop in industrial production,’ a banker said as according to him a six per cent fall in industrial production will impact agriculture as well.

Rising cost of doing business and severe energy crisis have crippled textile industry to the extent that a reasonably good cotton crop is not being consumed locally.

‘More than 65,000 metric tons of raw cotton has been exported in the first half of 2008-09 to Pakistan’s competitors in the world at almost 10 per cent less than the average unit price,’ the banker said.

Fabrics is one textile product that has fetched more than one billion dollars in export during July to December and an over 12 per cent growth because Pakistan’s competitors in home textiles, Bangladesh, Turkey and a few other countries are on a buying spree.
Leather and leather goods which have been Pakistan’s traditional products for exports have come under pressure and showed over 12 per cent decline in export earnings than last year.

As against more than $600 million export earnings in the first half of the last fiscal year, leather goods export in the first half of 2008-09 amounts $526.35 million.
The only encouraging factor on the export front is small increases in a variety of items -- molasses, fruits, chemicals and pharmaceuticals, marble and granite, jewelery, meat and cement. But cement export to India is coming under problems following change in relationship between Pakistan and India and slump in construction business in Dubai.
‘If we manage to export $20 billion at the end of day, it won’t be too bad,’ said a business leader. But he expects a balance of trade in 2008-09 less than 2007-08 because import bill will shrink.