Pakistan Economy - News & Updates - Archive

[Neo]

Pakistan, Mexico to cooperate on energy ​

Thursday, March 19, 2009

ISLAMABAD: Ambassador of Mexico to Pakistan Arturo Hernandez-Basave called on the Water and Power Federal Minister, Raja Pervez Ashraf in his office on Wednesday.

The various matters of mutual interest to enhance economic ties between the two countries were discussed in the meeting, said a news release. Both the minister and ambassador agreed to exchange delegation of experts to explore the avenues for cooperation in energy sector.

Ashraf also said that Pakistan would get benefit of the new power generation technologies from Mexico and technical experts will be sent there in this regard.

The ambassador said that Mexico is generating electricity from different sources. He said that Mexico and Pakistan should cooperate with each other in energy sector. He also invited a delegation from Pakistan to participate in a conference in Mexico on energy in June this year.

 

[Neo]

Environment degradation causing Rs 365 bn losses ​

Thursday, March 19, 2009

LAHORE: Minister for Environment Hameed Ullah Jan Afridi said that Pakistan was facing a number of environmental challenges due to accelerated economic and demographic changes.

Inaugurating the “Geography and Environment Carnival 2009” organised by the Department of Geography of the Forman Christian (FC) College, University here on Wednesday, he said that unsustainable rate of population growth, dependency on natural resources and lack of awareness was gradually leading to over-exploitation and environmental degradation. He said that the country was also facing negative consequences of climate change such as glacial retreat, glacial lake outburst, droughts, flash floods and other associated natural hazards, adding the environmental degradation is estimated to cause economics loss to the tune of Rs 365 billion per annum, which amounts to six per cent of GDP of the country. The main purpose of this carnival is to promote environmental awareness and conservation activities among students, staff and faculty members.

Pakistan is neither a major global polluter nor a large consumer of resources, yet our country is likely to suffer disproportionately from climate change and other global environmental problems, he said. Pakistan is today witnessing severe pressure on natural resources and the environment. The environmentalists have warned that climatic change is likely to exacerbate this trend, he said.

He said water supply, already a serious concern in many parts of the country, would decline dramatically, affecting food production. Export industries such as fisheries will also be affected, while coastal areas risk being inundated, flooding the homes of millions of people living in low-lying areas, he said.

The health of millions will also be affected as diarrhoeal diseases associated with floods and drought become more prevalent; intensifying rural poverty is likely to increase internal migration as well as migration to other countries, he said.

The minister said that the government had declared 2009 as the National Year of Environment to streamline the efforts for raising awareness and mitigating the effects of environmental degradation and climate change.

Appreciating the initiative of organising Geography and Environment Carnival as part of the activities of National Year of Environment 2009, the minister said that such events were important in creating awareness among our literate young generation about the sanctity of the environs that we live in. He said that it was our duty to preserve and maintain natural form of earth as was the one and only habitat for our living and substance.

 

[Neo]

Italian energy group Eni signs deal with Pakistan ​

Thursday, March 19, 2009

ROME: Italian energy group Eni said on Wednesday it had signed a cooperation agreement with the government of Pakistan to develop new oil and gas projects.

Eni managing director Paolo Scaroni told a press conference that the company, already the leading energy operator in Pakistan, had signed contracts with two “Pakistani national companies... that will use our technology to promote the country’s industrial development.”

Eni’s target is to double output in Pakistan, currently 56,000 barrels a day, in the next five to six years through the investment of $ 50 to 70 million, Scaroni said. “The offshore sector in Pakistan is very promising,” he said, adding that Eni employees had never faced serious security problems in the country, although access to certain tribal areas remained difficult. Eni, 37 per cent owned by the Italian state, has been operating in Pakistan since 2000 at 21 sites.

In Islamabad, a delegation headed by Paolo Scaroni, CEO/Chairman Eni, met Prime Minister Syed Yousuf Raza Gilani at the PM House on Wednesday. Gilani said Pakistan offers enormous investment opportunities, particularly in the field of hydrocarbons as there was a surge in demand in the energy and power sectors due to high economic growth and improvement in the living standard of the people.

Terming energy exploration as one of the most under-explored sectors in Pakistan, the prime minister said the demand is increasing rapidly and the government is encouraging investment to enhance production in this field.

The prime minister, while commending Eni for its exploration activities, said Pakistan desires that Eni may also expand their activities in the upstream sector. The company primarily focuses in areas of exploration and production, gas and power, refining and marketing, construction and petrochemicals.

 

[Neo]

Foreign investment drops sharply by 34.2 percent​

KARACHI: Net foreign investment in the country took a deep plunge of $981 million or 34.2 percent to $1.892 billion during the first eight months of the current financial year. The country had received foreign investment worth $2.873 billion in the last financial year.

The inflow of foreign investment into the country continues to decline in the current financial year mainly due to withdrawal of money by foreign portfolio managers. Foreign investors who had put their money in Pakistani stocks in the previous years when there was a boom in our markets pulled out large amounts this year owing to continuous decline in all three stock markets of the country.

According to SBP’s data, foreign investors withdrew $902.3 million they had earlier invested in Pakistan’s securities including government bonds.

This resulted into a net decline in foreign investment although foreign direct investment rose by $5 million or 0.2 percent to $2.794 billion in July-February period of 2008-09. The country had received $2.789 billion in the same months of the last year.

The stock markets have been bearish since April 2008 owing to a multitude of factors including a slump in economy, political uncertainty and deteriorating law and order situation.

The Karachi Stock Exchange 100-share index is now down by 150 percent from its April 18 level of 15,676 points.

Inflow of investment from developed countries was down by 46.4 percent to $1.070 billion during the first eight months of current fiscal year from $1.998 billion in the same period of last fiscal year. But investment flows from developing economies made for the loss. They surged by 43.8 percent to $1.036 billion from $720.7 million last year.

The United States of America continued to be the largest source of foreign investment for Pakistan. We received $382.6 million worth of investment from the US. The second biggest investment came from Mauritius that stood at $295 million. Substantial investment was received from South East Asian countries with $213.7 million from Malaysia, $201.1 million from Singapore, and $52.9 million from Hong Kong. Countries in European Union were also major sources of foreign investment with $124.7 million coming from the UK, $66.5 million coming from Netherlands and $40.6 million coming from Germany. We also received $53.3 million from Japan and $47.6 million from Australia.

 

[Neo]

Industry’s woes continue as LSM declines by 8.91%​

KARACHI: The most widely followed indicator of Industrial production—Large scale manufacturing—slumped by 8.91 percent in January of current fiscal year, reinforcing the fears of major layoffs and closing down of industrial units in the country.

The worst performance in the large-scale manufacturing was caused by downfall in auto, textile, electronic, petroleum and other key sectors.

Food, textiles and apparel, and leather industries to the extent of heavily dominate Pakistan’s manufacturing industry over 50 percent. Other major segments in manufacturing include chemicals and pharmaceuticals (15.2 percent), basic metal industry (7.7 percent), nonmetallic mineral products (5.1 percent), machinery (4.6 percent), cement (4.4 percent) and automobiles (4.4 percent).

In July-January of current fiscal, the industrial output was also in negative territory as it plunged by 5.35 percent over the corresponding period of previous year, Federal Board of Statistics (FBS) reported on Wednesday.

Analysts attributed the fall in the industrial output partly to global financial crisis and more with the domestic issues such as prolonged power outages, high cost of utilities and raw materials coupled with the high interest rates in the country.

The slump in the industrial sector, particularly large-scale manufacturing, has led to a decline in revenue collection as well as slowdown in exports proceeds.

Exporters said that fallout of the global financial crisis and effects of domestic policies, including the highest-ever interest rates and lack of energy availability had slowed down manufacturing. The economic recession in export markets of the country has dampened the demand, which is ultimately affecting the export-oriented sector.

Also, the higher interest rates, they pointed out is a big cause of concern and has negative implications for the industry. The other countries of the world are cutting down their discount rates to boost the economic growth, they said, but here the situation is vice versa in Pakistan as policy discount rates kept rising despite the negative growth in the industrial production.

They feared that situation might aggravate in the summer when the power outages became a routine, subsequently hurting the already fragile industry.

In view of the current situation, the growth target of 6.1 percent for the current fiscal appears impossible to be achieved and the final figures are likely to settle in the negative zone. Petroleum sector was the worst performer and its overall production fell 8.08 percent in first seven months of current fiscal. Jet fuel declined 7.66 percent, kerosene oil 14.38 percent, high-speed diesel 3.79 percent, furnace oil 8.97 percent, LPG 18.75 percent.

In food sector, production of vegetable ghee declined by 11.69 percent, cooking oil 5.38 percent, wheat and grain milling 10.16 percent, beverages 5.32 percent. The production of tea blended and starch and its production rose 4.22 and 9.30 percent, respectively.

Production of refrigerators dropped 6.99 percent, deep-freezers 21.70 percent, air-conditioners 16.46 percent, electric bulbs 22.16 percent, electric tubes 20.17 percent, fans 7.91 percent, motors 22.34 percent, electric meters 9.70 percent, switchgears 16.02 percent, transformers 8.10 percent, TV sets 38.28 percent and bicycles 27.52 percent. Production of cotton yarn and cotton cloth declined 0.52 and 0.46 percent, respectively.

The production of trucks decreased 27.53 percent, buses 51.89 percent, jeeps & cars 46.32 percent and motorcycles 17.65 percent.

 

[Neo]

WB ranks Pakistan first in corporate governance​

ISLAMABAD: World Bank Report “Getting Finance in South Asia 2009” has ranked Pakistan first in the areas of corporate governance, performance and efficiency.

In the area of access to finance, Sri Lanka ranks first in South Asia, on capital market development and market concentration and competitiveness in the banking sector first slot is grabbed by India.

According to the detailed report on Pakistan the bond market is developing at a lesser pace. The domestic bond outstanding was 25.16 percent of the GDP, equivalent to $32.41 billion. This consists of mainly government bonds, as the corporate market is yet to develop.

The areas on which Pakistan needs to focus are access to finance capital market development, and market concentration.

Access to Finance: Pakistan needs to focus on improving financial outreach through its commercial banking sector. Demographic branch penetration is low with around five bank branches per 100,000 people during the six-year period. To promote branch openings in rural areas, the SBP has introduced the Annual Branch Licensing Policy, which requires commercial banks with 100 branches or more to open at least 20 percent of their branches outside big cities and set up branches in Tehsil Headquarters, where no branch of any bank exists.

Usage indicators showed mixed results. While deposit accounts dropped from 195.84 per 1,000 people in 2001 to 171.14 in 2006, loan accounts per 1,000 grew by almost 98 percent. One would have expected both ratios to grow, given the economic growth experienced by Pakistan over the last few years.

Pakistan is one of the few countries in the world that has a separate legal and regulatory framework for microfinance banking. Though in Pakistan the potential market size is huge (around 30 million), the penetration remains low. Despite a substantial increase in the number of borrowers (from 60,000 in 1999 to around a million in December 2006), huge portions of this potential market remain underserved.

Financial stability: Pakistani banks maintained the regulatory CAR well above 8 percent. Strong returns and fresh capital injections to several banks resulted in this positive trend.

Over the six-year period, the ratio increased to 13.33 percent in 2006. Leverage ratio almost doubled to 8.94 percent in 2006.

The gross NPL ratio reduced progressively from 19.6 percent in 2001 to 5.7 percent in 2006. The NPL position of the public bank should be monitored continually, however, because any adverse movements in this sector could have a negative impact on the entire banking industry, as public banks hold a significant share of the lending portfolio.

Banks’ liquidity position should be monitored carefully using measures such as maturity gap analysis, to find out the presence of any liquidity mismatches.

The SBP would adopt the Internal Ratings–Based Approach from January 1, 2010, with banks and development finance institutions (DFIs) permitted to implement it sooner if the SBP approves their internal risk management systems.

The Pakistan bond market is still at its development stage and is dominated by government securities at around 97 percent. The lack of growth in the bond market should be a concern, however, as this deprives the market of an alternate funding source.

Corporate Governance: Pakistan leads the region in corporate governance scores. Some of the amendments would improve the self-governance; others, such as seeking SBP approval for 5 percent or more shares, need to be reviewed. Other areas to focus on include greater transparency and disclosure, greater accountability, further disclosures on beneficial ownership, safeguards on stakeholder rights, further improvements to responsibilities of the board, and further emphasis on self-governance for the institutions.

The SBP requires disclosure of beneficial ownership of shareholders, with the threshold set at 3 percent. However, this information is not available to the public.

Investor rights relating to voting and shareholder meetings appear to be in place. The government can appoint directors to government-controlled banks only by virtue of its shareholdings.

Provisions for transparency and disclosure have met the main criteria, but the internal audit function has room for further improvement. Disclosure of audit fees paid to external auditors is required.

To attract and retain qualified and competent staff, a review of compensation policies is needed. Banks are required to disclose the compensation of directors in detail.

Although the guidelines have been issued, the success of the governance procedure largely depends on commitment by the banks. Their approach to corporate governance should extend beyond simple compliance with legal requirements. This is an evolving process and cannot happen overnight. As such, the regulatory authority surveillance and enforcement is important. staff rpeort

 

[Neo]

Budgetary support for 2009-10: EU to provide 200 million euros: Qureshi​

ISLAMABAD (March 19 2009): Foreign Minister Makhdoom Shah Mehmood Qureshi said on Wednesday that European Union (EU) would provide 200 million euros as budgetary support for 2009-10 and the United States has also assured to triple its assistance to Pakistan for socio-economic development.

Addressing a press conference at the Ministry of Foreign Affairs, the Minister briefed the media that he met the American leadership during his stay in Washington and he found commitment and seriousness of new US administration to extend help Pakistan for improving the situation in the region.

He said the Obama administration has shown its commitment and seriousness to extend full help and co-operation to improve capacity building of Pakistan to deal with extremism and terrorism while reviewing its policy towards Pakistan and Afghanistan on the issue of war against terrorism. Besides, the Minister said, the EU has also agreed to provide 50 million euros immediately for food security in Pakistan, besides the 200 million euros for budgetary support.

He said a joint ministerial commission meeting of Pakistan and EU will be held in Brussels for further enhancing trade activities. Regarding his visit to Prague for tri-lateral meeting, he said, the EU has agreed to lift anti-dumping duty imposed on bed linen, adding that it would help improve Pakistans export to Europe increasing them from 200 to 300 million euros.

Qureshi informed the media that the second round of talks among Pakistan, Afghanistan and US would be held on May 6 in Washington to make further progress in formulating the new policy for the war on terror. The foreign minister was of the view that Untied States is ready to listen to Pakistans point of view as far as the formulation of new policy regarding war on terror is concerned.

"US has agreed to review the policy of drone attacks and expressed the hope that the issue will be again discussed in his next visit to Washington. Pakistan has been able to convey to the US administration to look into the advantages and disadvantage of drone attacks," he added.

He said Pakistan made it clear to the US that the drone attacks in tribal areas causing collateral damage and would not help in controlling the militancy. Minister said new US administration is also committed to the project of Reconstruction Opportunity Zones in the Fata areas of Pakistan and required legislation on the issue has been started for early economic and social development in the area. Qureshi said that the US could not achieve the objectives of war on terror despite fighting a costly war during the last seven years.

Pakistan, he said, has advised the Untied States to focus on civilian search like political engagement and socio-economic development in the tribal areas to achieve the required results along with the military search.

To a question, the foreign minister said that the Standing committees of NA and Senate would also be engaged for getting inputs for the broad based policy to tackle the militancy to be formulated by the US in consultation with Pakistan and Afghanistan.

Regarding capacity enhancement and assistance required from US administration, the Foreign Minister said Pakistan had asked for finding a new mechanism for early transfer of coalition cost, as dollar one billion has been stuck up, capacity enhancement with provision of helicopters, effective night vision mechanism and other latest technical support.

"Pakistan has not given its bases for the Nato forces for the drone attacks" he said while responding to a question. About Dr Afia Siddiqui, he said that Pakistan has taken up the issue at every diplomatic forum and would continue its efforts in future.

He sought co-operation and unity of all the political forces to achieve what he said diplomatic targets, saying that political stability is key to success, progress and prosperity."

On the issue of Friends of Democratic Pakistan the Foreign Minister said US has also assured to extend its full support to Pakistan. He said US is waiting anxiously to attend the important meeting of FoP being held in Tokyo on April 16-17, he added.

Regarding his visit to Tehran for ECO summit, the Foreign Minister said during the meeting between President Asif Ali Zardari and his Iranian counterpart Ahmedinejad, the issue of Iran-Pakistan-India gas pipeline pricing has been discussed. He said Pakistan has conveyed a formula to Iran that will be discussed by the Iranian leadership to reach consensus. He said the issue will be discussed in the next trilateral summit.

He said that foreign ministers of Pakistan, Afghanistan and Iran would meet in Kabul to finalise modalities for the troika summit to be held in Tehran. The Foreign Minister said it has also been agreed in the trilateral summit, between Presidents of Pakistan, Iran and Afghanistan, that three foreign ministers will meet every month for further co-operation in various fields for the development, progress and prosperity in the region.

 

[Neo]

Current account balance becomes surplus after 20 months​

KARACHI (March 19 2009): The countrys current account balance has become surplus after the 20 months gap primarily due to massive decline in trade and services deficit and rising trend in remittances. Current account balance was constantly showing deficit since June 2007 largely contributed by the high imports on the back of rising commodity prices in international market.

However, a major cut in the imports followed by slow trade activities has improved the situation and the current account balance has come in the surplus after a 20-month gap. The countrys current account balance has posted a surplus of 146 million dollars during February 2009 as compared to some 279 million dollars during January 2009.

During the February 2009, overall deficit of trade, services and income stood at 898 million dollars over the current account transfers of 1.044 billion dollars, showing a surplus of 146 million dollars in February 2009. With a surplus in the current account balance, the overall current account deficit has come down by 14 percent during the first eight months of the current fiscal year ie 2008-09.

The country has posted a current account deficit of some 7.455 billion dollars during July-February of current fiscal year as compared to 8.645 billion dollars in the same period of last fiscal year, depicting a decline of 1.190 billion dollars.

"Surplus in the current account deficit is a positive indication for the overall economy and the trend would continue," said Muzamil Aslam, an economist. He expected that the current account deficit for the remaining period of current fiscal year would also be on decline on the back of fall in imports. He said that surplus balance would increase the liquidity in the domestic market, which will definitely put pressure for cut in the policy rate.

Muzamil further expected that decline in the current account deficit would also help keep the exchange rate stable, besides strengthening the foreign exchange reserves. "The improving current account situation also indicates overall economic stability and we are expecting further stability in the near future, while with the current declining trend, the IMF target of current account balance would be easily meet," he added.

The State Bank of Pakistan statistics on Wednesday revealed that trade and services sector have presented a significant improvement and contributed major share in the depleting current account deficit, while income deficit is still witnessing upward trend. Services deficit has declined by some 360 percent during the first eight months of current fiscal year.

Services sector deficit stood at 2.713 billion dollars with 2.382 billion dollars exports and 5.095 billion dollars imports in July-February of current fiscal year as compared to a deficit of 4.237 billion dollars with 6.342 billion dollars imports and 2.105 billion dollars export in the corresponding period of last fiscal year.

Overall deficit including goods, services and income stood at 14.499 billion dollars against the current account transfers of 7.125 billion dollars during the July-February of FY09.

The countrys overall goods imports stood at around 21.878 billion dollars and exports at 13.015 billion dollars with a trade deficit of 8.863 billion dollars during first eight months of current fiscal year, which previously stood at 9.294 billion dollars during same period of FY08. Similarly, income deficit surged by 495 million dollars to 2.923 billion dollars with some 3.597 billion dollars outflows and 674 million dollars inflows during the first eight months of current fiscal year.

 

[Neo]

Circular debt to be settled with issuance of Rs 80 billion TFCs​

KARACHI (March 19 2009): The problematic circular debt, afflicting the banking, oil and power sectors, may finally be settled with the issuance of Rs 80 billion Term Finance Certificates (TFCs). The acceptance of terms of offer for the five-year tenor paper at 1.75 percent above Kibor from 10 banks has reportedly been received - with some conditionalities.

There was reluctance on the part of some banks, as the return earned by them would come down from 2.25 percent to 1.75 percent above Kibor. Based on past experience, banks also fear that these TFCs would be forcibly rolled over up on maturity, due to the fiscal constraints, despite initial two years of grace period in the five-year term repayment.

The amount of Rs 80 billion, to be raised from 10 banks--National Bank, Bank Alfalah, ABL, HBL, UBL, Askari Bank, MCB Bank, Citibank, Standard Chartered Bank, and Bank Al-Habib--would settle the bank loans obtained by Pepco, Hubco, AES Colpir, AES Pakgem, SSGC, PSO, Shell, Parco, NRL, and PRL.

An exhaustive exercise was undertaken to net off which power generating companies owe to which OMC, and which OMC has outstanding against which refinery. This exercise reduced the circular debt of over Rs 250 billion to a net figure of Rs 80 billion.

On completion of this exercise, the Advisor to Prime Minister of Finance, Shaukat Tarin, held at least two meetings to persuade the banks to participate in the TFC offer. Reluctance of the bankers was reportedly overcome when State Bank of Pakistan Governor Salim Raza stressed upon the bankers that the other option would be withdrawal of government and public sector deposits--Banks reportedly hold Rs 600 billion plus in governmental deposits.

It may be recalled that withdrawal of Rs 40-50 billion of deposits in the last quarter of 2008 by government entities to retire the overdraft of SBP had sent the interbank overnight borrowing rate to soar above 20 percent. It was feared that a repeat of last year would be far more damaging for the banks. As a consequence, the TFC issuance is now near closure.

 

[Neo]

Friends of Pakistan Conference: meeting reviews progress on preparatory work​

ISLAMABAD (March 19 2009): Pakistan will seek co-operation from the international community in areas of internal security, infrastructure development and poverty alleviation, with special attention on Pakhtoonkhwa and Balochistan provinces. This was decided in a meeting at the Presidency here Wednesday, which was jointly chaired by President Asif Ali Zardari and Prime Minister Syed Yousuf Raza Gilani.

It reviewed the progress on the preparatory work for the Friends of Democratic Pakistan conference to be held in Tokyo on April 17, in which President Zardari will represent Pakistan Those who participated in the meeting included Foreign Minister Shah Mehmood Qureshi, Advisor to PM on Finance Shaukat Tarin, Secretary General Salman Farooqi, Foreign Secretary Salman Bashir and Presidents spokesperson Farhatullah Babar.

It was emphasised in the meeting that to make the war against militancy a success it was necessary to comprehensively address the security and development issues in Pakhtoonkhwah and Balochistan provinces in the proposed package.

He said that Pakhtoonkhwah province bore the brunt of the war on terror and its development and security needs must be seriously addressed. He expressed the hope that the forthcoming meeting of Friends of Pakistan will view positively Pakistans requirements to successfully overcome the challenges posed by militancy.

The countries and international bodies included in the Friends of Pakistan group are US, UK, China, France, Germany, Italy, Japan, Australia, Canada, Saudi Arabia, Turkey, UAE, EU, EC and UN. The Friends of Democratic Pakistan provides a forum to friendly countries to build strategic partnership with Pakistan to foster peace and stability in the region, promote economic stability and address energy needs.

 

[Neo]

Smeda invests Rs 932 million for development in NWFP​

PESHAWAR (March 19 2009): Small and Medium Enterprises Development Authority (Smeda) has facilitated an investment of around Rs 932 million in NWFP besides training about 12,000 SME entrepreneurs in the province. The organisation, set up in 1998 to take up the challenge of developing Small and Medium Enterprises (SMEs), has also played an instrumental role in formation of sector development through establishment of companies, informed Provincial Chief of Smeda, Javed Khattak here on Wednesday.

Javed Khattak said Smeda has played an active role in setting up of Pakistan Stone Development Company (Pasdec), Pakistan Hunting and Sporting Arms Development Company (PHSADC) and Pakistan Gems and Jewellery Development Company (PGJDC).

These companies have been established with the objective of sector development through upgradation of skill of persons involved in these professions besides opening ways for export of the products. The organisation also made efforts for improvement of clusters of different artisans involved in the skill of weaving, furniture and leather shoes.

In this regard, he added, Smeda took measures for upgradation of handlooms to power looms for people making their livelihood through weaving of Khaddar (traditional fabric) in Charsadda district. Similarly lending facilities were provided to weavers through Bank of Khyber and SME. The market linkages of the stakeholders were developed besides addressing the problem causing health hazards and environmental issues.

For development of furniture cluster, a business development centre was set up in Tehkal (Peshawar). Similarly, work on setting up of a Furniture Village at Jalozai is in progress while Wood Seasoning Plant for Dir and Peshawar has been approved.

The organisation also took measures for development leather shoe manufacturers in Charsadda. There are more than 500 units operating in Charsadda and Smeda is providing input to the cluster and a footwear-training institute that was established by TDAP.

 

[Neo]

Mines and minerals department to spend Rs 300 million on uplift schemes​

LAHORE (March 19 2009): Provincial Mines and Mineral Department is spending an amount of Rs 300 million on 20 different development schemes for the development of mineral resources in the province in the current fiscal year, spokesman of the department said this on Wednesday.

According to the spokesman, a sum of Rs 216 million was being spent on 13 ongoing schemes while Rs 83 million were provided for 7 fresh schemes. These schemes will not only enhance the development process of natural resources but will also help to improve the means of transportation to reach in the areas of natural resources, the spokesman told.

It will also be helpful to develop and improve the exploration of natural resources by widening existing roads and infrastructure through sustained provision of facilities in mineral rich areas. Spokesman further informed that special attention is focused to supply electricity, extending the roads and availability of other necessities.

Development of mineral resources to enhance the exploration, exploitation of mines and mineral resources in a safe and environmentally sound manner in order to support a more productive economy is the main aim of the department, concluded the spokesman.

 

[ejaz007]

Pak forex reserves improve by $108.5 mln
Updated at: 2250 PST, Thursday, March 19, 2009


KARACHI: Pakistan’s foreign exchange reserves have recorded an increase of 108.5 million dollars and stood at 10.11 billion dollars on the week ended March 14.

According to State Bank of Pakistan, of the totals reserves SBP holds 6.68 billion dollars while 3.47 billion dollars are with commercial banks.

The experts attribute improvement in the country’s foreign exchange reserves to the reduction in exports and rise in foreign remittances.

Pak forex reserves improve by $108.5 mln

 

[ejaz007]

ECC approves gas import price for IPI project
* Asks Ministry of Petroleum to seek cabinet ratification
By Sajid Chaudhry

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet approved a ‘rationalised’ gas import price equivalent to 80 percent of the international crude oil price on Thursday, removing the final obstacle in the $7.8 billion gas pipeline project with Iran.

The decision was made in a meeting chaired by Finance Adviser Shaukat Tareen at the Prime Minister’s Secretariat.

According to sources, Pakistan and Iran would soon sign the much-awaited Gas Sale and Purchase Agreement (GSPA) to enter the implementation phase of the project.

Earlier, Pakistan had asked Iran to lower the price to the equivalent of 70 percent of the price of crude oil in the international market.

In the recent bilateral talks, Tehran declined to show flexibility on the price, asking Islamabad to “take it or leave it”, the sources said.

According to an official statement, the decision was made considering a Ministry of Petroleum summary seeking the approval to sign the GSPA at the offered price, “envisaging import of one billion cubic feet per day of natural gas, constituting 25 percent of Pakistan’s current gas production in order to support 5,000 megawatts of power generation”.

The ECC advised the Ministry of Petroleum to seek approval from the cabinet before signing the GSPA with Iran. The committee also considered a Ministry of Commerce summary seeking permission for bilateral trade with India through the Wagah-Attari road link and approved the proposal for the development of the required infrastructure to facilitate the trade of 14 items initially. Subsequently, the route would facilitate the import of essentials as well as raw material for export-oriented industries. The decision has been made in the light of an agreement between the Pakistani president and the Indian prime minister in a 2008 meeting in New York to implement the project in a phased manner commensurate with parallel development of infrastructure on both sides of the border. The ECC also directed provincial governments to take action against hoarders of eatables and keep a constant check on food supply chain mechanisms in the markets to ensure availability of all essentials. “Relief to the common man should be the primary focus of provincial governments,” a statement quoted the committee members as saying. The ECC formed a surveillance committee consisting of federal, provincial and local government representatives to look into price control matters and submit actionable recommendations.

In other decisions, the ECC directed the Trading Corporation of Pakistan to meet wheat requirements of Sindh on priority, and empowered the Federal Board of Revenue (FBR) to give exemption on regulatory duty to franchised food chains for importing potato chips.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Producing high-yield cotton seed ​

Local companies seek concessions​

Friday, March 20, 2009

LAHORE: Seed companies have urged the government to provide them a level-playing field in line with concessions granted to multinationals, which would give them a chance to introduce high-yield and disease-resistant BT cotton hybrid seed by 2010.

Local seed companies point out that out of 250 registered companies in the country, which included multinationals also, only 10-12 domestic companies are actively involved in research work. All others including multinationals, they say, are simply importing hybrid seed varieties of various crops.

The News has found that Pakistan has been trying to introduce BT cotton seed developed by a renowned multinational company. However, annual royalty demanded by the company was very high effectively hampering its introduction. Some legal steps necessary for introducing biotech seeds have also not been taken by the government. The same multinational, in the meantime, has introduced BT cotton seed in India and transferred technology as well. The Indians have gone a step forward and developed BT cotton varieties from high-yielding hybrid cotton seeds.

Agricultural experts point out that in BT cotton seed some disease-resistant attributes are passed into genes of cotton seed, which ensures that the crop is not affected by pest attacks, the main factor which determines the output of the crop.

However, they say BT cotton generally only ensures that pest infestation causes no production loss but it does not improve cotton yield. Since cotton crops the world over are frequently affected by pest attacks and suffer heavy production losses, BT cotton is considered an insurance to achieve normal cotton output. In addition, BT cotton saves cost of pesticides which are sprayed during crop cultivation cycle.

The Indians, which were using hybrid seeds to improve cotton yield, has experimented BT genes in high-yielding cotton hybrid seeds. A similar research has also been going on in China which has also developed various BT cotton hybrid seed varieties.

Now besides protection against disease, these varieties also increase the cotton yield. India has doubled cotton production during the past six years. China, the largest producer of cotton but which still depends on imports to meet growing demand, is on its way to achieve self-sufficiency in cotton in the next five years through BT cotton hybrid varieties.

Pakistan has seen its cotton production from conventional seeds fall by over 30 per cent from the peak in 1999. It currently imports 3-5 million bales of cotton per year. Local seed companies capitalised on the opportunity created by the slow progress on reaching a deal between multinationals and the government for introducing BT cotton in the country.

One seed company has entered into a joint venture with a Chinese seed company to produce BT cotton hybrid seed in Pakistan. The company has conducted field trials for two years which are necessary for BT cotton hybrid seed. The company is ready to launch commercial sales of these seeds in 2010.

The News has found that in the meantime the multinational offering BT cotton has substantially reduced its royalty and is in final stages of finalising a deal for selling BT cotton it produces in India.

Local seed companies point out that they have been barred from importing cotton hybrids from India. They demand a level-playing field, saying if a multinational is allowed to import seeds from India they should also be given the same facility. The use of Chinese BT cotton technology with Indian hybrid cotton seed, they say, would reduce the cost of seed production and double cotton yield in the shortest possible time.