Pakistan Economy - News & Updates - Archive

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World Bank launches new website on South Asia

ISLAMABAD (June 30 2006): The World Bank (WB) has launched a new website on South Asia with free access to economic and development data and analysis on Pakistan, Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka.

Resources available include economic indicators - databases with gross domestic product projections - forecasts on poverty reduction for the next 10 years - interesting development of facts such as 25 percent of Indian teachers do not show up to work; road accidents in South Asia are expected to rise by over 140 percent by 2020.

The journalists can find latest news, media contacts and upcoming key analysis before it is released at http://www.worldbank.org/sarnews. Businesses, interested in consultancies and other opportunities with the World Bank, can consult http:// www.worldbank.org/sarprojects. Researchers and people interested in economic data can also consult http://www.worldbank.org/ sardata.
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ISLAMABAD (July 01 2006): Surpassing the revenue collection target set for outgoing fiscal 2005-06, the Central Board of Revenue (CBR) so far has amassed Rs 700.3 billion by June 30, 2006 against the annual target of Rs 690 billion, reflecting an increase of Rs 10.3 billion.

According to provisional figures issued on Friday, the Board has bagged Rs 700.3 billion during 2005-06, against Rs 588.1 billion in 2004-05, showing a growth of Rs 112.2 billion.

The provisional collection in June, 2006 has been recorded at Rs 89.9 billion against Rs 87.362 billion June of last fiscal year, depicting an increase of Rs 2.538 billion.

The tax managers are confident that the collection would further increase on compilation of final figures in the next few days. It is expected that the final reconciled figures for 2005-06, after receipt of data from all branches of NBP and government treasuries, would cross Rs 710 billion.

According to tax-wise details, direct tax collection is Rs 217 billion, against Rs 183.4 billion last fiscal year, showing an increase of 18.4 percent. Sales tax collection is Rs 291.1 billion, against Rs 238.5 billion of last year, showing growth of Rs 52.6 billion.

The GST collection at the import stage is Rs 169.8 billion against Rs 144.8 billion, showing an increase of 17.2 percent. The sales tax collection on domestic consumption is Rs 121.3 billion against Rs 93.7 billion. The collection of customs duty is Rs 134.9 billion in 2005-06) against Rs 115.4 billion of last year, indicating a growth of 16.9 percent.

The collection of federal excise duty (FED) is Rs 57.5 billion against Rs 52.90 billion, showing an increment of Rs 4.6 billion. The provisional collection of June, 2006 is Rs 89.9 billion. Following is the month's break-up of individual taxes: sales tax Rs 31.9 billion; customs duty Rs 16.9 billion; direct taxes Rs 35.1 billion; and FED Rs 6 billion.

 

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Real GDP depicts 6.6 percent growth in 2005-06: SBP report

M ISRAR KHAN

ISLAMABAD (July 01 2006): The real Gross Domestic Product (GDP) (inflation-adjusted) during financial year 2005-06 at constant factor cost of FY 1999-00 increased to Rs 4.879 trillion from 4.577 trillion during previous fiscal year, depicting 6.6 percent growth, on the back of impressive services sector growth, the State Bank of Pakistan (SBP) reported on Friday.

This inflation-adjusted measure reflects the value of all goods and services produced in the country in 2005-06, expressed in base-year prices of 1999-00. It referred to as 'constant-price', 'inflation-corrected' GDP.

The sector-wise provisional data released by SBP says that though, as a whole economy grew above six percent, the most worrisome flashback of the economy during the 2005-06 was the declining agricultural growth which was an alarm bell for future economic growth. The sector (agriculture) grew by only 2.5 percent (to Rs 1.055 trillion) against 7.5 percent during previous fiscal year.

It is worth mentioning that in agriculture sector, though the crops showed growth of 2.32 percent, the major crops production declined by 3.63 percent in monetary terms to Rs 371.14 billion against Rs 385.12 billion of previous fiscal year. Besides, forestry sector also declined to Rs 16.523 billion from Rs 18.304 billion with a decrease of 9.7 percent.

According to the data, only livestock sector showed a robust growth of eight percent to Rs 523.49 billion. However, its share in the total agriculture growth or GDP was minimal.

Another worrisome feature in agriculture was that the fishing sector for the last five years has been declining and hovering between Rs 15.163 billion in 1999-00 and Rs14.184 billion in 2005-06. During FY 2005-06, it grew only by 1.92 percent from Rs 13.916 billion previous fiscal year.

The industrial sector during FY 2005-06 grew by 5.87 percent to Rs 1.270 trillion against Rs 1.199 trillion previous fiscal year.

In industrial sector, the manufacturing, which accounts for 18.2 percent of GDP, registered 8.6 percent growth and stood at Rs 889.036 billion, whereas the original target was 11.0 percent against last year's achievement of 12.6 percent.

According to the data, Large Scale Manufacturing (LSM) grew weaker than expected at 8.99 percent to Rs 620.51 billion against Rs 569.325 billion previous fiscal year when it grew by 15.6 percent. Its growth was far below the original target of 14.5 percent set for the FY 2005-06. The small scale manufacturing increased by 7.63 percent to Rs 268.53 billion from Rs 249.48 billion.

Mining and quarrying registered growth of 3.8 percent and stood at Rs 126.81 billion against Rs 122.18 billion in FY 2004-05.

Construction continued its strong showing, partly helped by activity in private housing market, spending on physical infrastructure, and reconstruction activities in earthquake-affected areas. The construction sector grew by 9.2 percent to Rs 107.22 billion in 2005-06 against extraordinary growth of 18.6 percent in previous year (Rs 98.19 billion).

http://www.brecorder.com/index.php?...&term=&supDate=

 

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KARACHI (July 01 2006): Foreign exchange reserves rose by $20 million to $13.021 billion in the week ending June 24, 2006 the State Bank of Pakistan (SBP) said on Friday. Reserves held by the SBP rose to $10.673 billion from $10.599 billion a week earlier, however, those held by commercial banks fell to $2.348 billion from $2.402 billion.

 

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LAHORE (July 01 2006): Punjab Chief Minister Chaudhry Pervaiz Elahi has said the government is following an effective policy for ensuring that fruits of prosperity should also reach the lowest level and is giving top priority to elimination of poverty and socio-economic uplift of masses.

Addressing the assembly members from D. G Khan, Rajanpur and Muzaffargarh here on Thursday, the CM said that foolproof arrangements were being made to supply pulses, sugar and atta at subsidised rates in a transparent manner from July, which would provide much-needed relief to the citizens.

Elahi said six million people would benefit from the programme of provision of daily-use items on concessionary rates, adding that solid measures were being taken by the government for maintaining prices of essential items at a reasonable level and the role of market committees was being redefined for this purpose.

He said it would be mandatory upon chairmen of market committees to ensure quality and standard of essential items, adding that a committee headed by Provincial Minister for Food would monitor prices of essential commodities on daily basis.

He said the government was giving a subsidy of Rs two billion for supply of essential items to the citizens on concessionary rates. District Price Control Committees were also being activated to check the provision of essential commodities to the people at cheaper rates in their respective districts, he added. He stressed upon assembly members to take effective steps for stabilising the prices of essential commodities besides keeping a vigilant eye on profiteers, hoarders, as well as those involved in adulteration.

Talking to Minister of State for Parliamentary Affairs and Pakistan Muslim League Chief Election Co-ordinator Kamil Ali Agha, the CM said the first phase of PML elections would be conducted on July 10, whereas PML elections at district and provincial level would be completed by July 15 and 25 respectively.

 

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KARACHI: The city is set to get two more technology parks, which are likely to be operational by the end of July 2006, officials said on Friday.

A senior official said the two new projects were part of the government plans to set up technology parks under public-private partnership and with the fresh initiative the number of such places would touch three.

“The two parks would offer total 150,000 square feet to the companies,” Nasir Afridi, Director Infrastructure Pakistan Software Export Board told The News. “It took almost two months to finalise things and the projects are ready and most probably it would be operational by the end of July.”

He, however, denied disclosing locations of the new parks saying the projects would be formally announced by the top notch within next couple of weeks.

Meanwhile, a source close to the board said the PSEB struck deal with an auto company to hire space in its building near Korangi Industrial Area. Similarly, he said, the second park was being established in one of the business centres at Tariq Road. “The two parks would have all basic infrastructure required for software houses, call centres or any other IT company,” said Afridi. “The two parks would offer dedicated bandwidth, 24-hour power supply and uninterrupted telephone lines.”

The latest addition of two more technology parks would lift the total number of such parks to eight across the country mainly in Karachi, Lahore and Islamabad. The metropolis has, however, currently a single such park situated along Shahra-e-Faisal.

The PSEB says it plans more in near future in the mega city and is in talks for the projects both in partnership with private sector and government institutions, with an aim to boost software export and explore new markets.

“For this, we are in talks with **** (National Industrial Parks) and EPZ (Export Processing Zone) in Karachi,” said Afridi.

He said currently six parks - operating in Karachi, Lahore and Islamabad - were fully occupied by the software houses, call centres and other firms offering IT-enabled services mainly offshore clients.

“So there is a need and demand to establish more such parks,” he added. “Soon we would be launching more projects in line with the local industry demands.”

The country’s software exports crossed $70 million during 2005-06 first time ever registering a 50 per cent growth, as western firms started turning more and more to Pakistan for IT-enabled services to cut costs and raise profits.

The country exported $72 million software during the first 11 months of 2005-06 as operators believe Pakistan is catching up very fast in software development and at such rate, the country global IT revenue should reach almost $9 billion by the end of 2009-10.

However, the industry players question the PSEB design in the way, which it acquires spaces on rent from private parties and declare that technology park.

“There is a difference between space for few firms and a dedicated technology park,” said Jehan Ara, President, Pakistan Software Houses Association (PASHA).

 

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LAHORE: Punjab Minister for Information Technology Adbul Aleem Khan on Friday said that developmental budget of IT Department has been increased to Rs300 million for computerisation of more departments.

Talking to under-training IT experts, the minister said that targets have been set and policy of the Punjab Government would be implemented in the starting fiscal year.

He said that establishment of information technology labs and centres of excellence in 10 cities and commencement of work on Software Technology Park at Ferozepur Road Lahore would be major projects. He said that pilot projects for computerisation of land records in three districts would be completed while internet and data warehouses of Punjab Government would also be created in the annual development program 2006-07.

The minister further said that digital connectivity through IT infrastructure would play a major role in capacity building of public sector which would ultimately enhance the credibility of the Government. He said that information technology is the backbone of developed world and Chief Minister Punjab Ch Pervaiz Elahi has given special emphasis to this sector.

 

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ISLAMABAD (July 02 2006): The government has decided to give Rs 10 billion to Karachi Electric Supply Corporation (KESC) for improving transmission and distribution system, besides adding 100 MV to the present power supply immediately.

A meeting is scheduled for Monday to finalise the Financial Improvement Plan (FIP) for the power-hungry utility, and the amount for this purpose would be arranged out of Public Sector Development Plan (PSDP).

Sources told Business Recorder that according to the Implementation Agreement (IA) with the investors, the government had agreed to provide Rs 10 billion to KESC for improving the system, but ignored it in the PSDP. Now the amount is being arranged on war footings, keeping in view the emergency situation in Karachi.

Prime Minister Shaukat Aziz and Minister for Water and Power Liaquat Ali Jatoi held two meetings on Saturday to make additional power arrangements for the Karachiites who are badly suffering from the electricity crisis.

The Prime Minister, in a meeting, directed Wapda to increase power supply to KESC by 100 MW from 600 to 700 MW immediately to help alleviate the difficulties being faced by the people of Karachi due to frequent power breakdowns.

The meeting was attended by Sindh Governor Ishrat-ul-Ibad Khan, Chief Minister Arbab Ghulam Rahim, Federal Minister for Water and Power Liaquat Ali Jatoi, Karachi City Nazim Mustafa Kamal, Secretary Water and Power, Wapda Chairman and KESC officials.

The Prime Minister directed KESC to expedite procurement of additional power generation capacity, and added that the utility also needed to expand its transmission and distribution system to serve the increased demand of electricity in the mega city.

The KESC Chief Executive Officer informed the Prime Minister that the company was taking all necessary steps to raise its power generation capacity and to renovate and repair its transmission lines to prevent recurring outages. Besides, steps are also being taken to improve the customers' service, he said.

Following the instructions from the Prime Minister, Jatoi held a meeting in the Ministry and finalised arrangements for supply of 100 MW additional power for KESC from Wapda system.

He, however, said that to resolve the problems, the KESC would have to improve its distribution system for uninterrupted and stable power supply to the people of Karachi. The Minister further asked it to expedite its expansion plan to meet the growing power demand. He also asked the KESC to avoid unannounced load shedding and inform the consumers of shutdown due to maintenance work.

Earlier, KESC MD Frank Schemiet briefed the meeting regarding current electricity situation in Karachi. He was asked to arrange additional capacity on war footing through barges.

He told the meeting that 45 MW more power could be available within three months from the barge-mounted power station, being imported from Kenya. He said that as an improvement plan of its existing system, there would be availability of additional power of 200 MW from existing power plants, as 13 grid stations would be improved, 850 new capacitor would be installed additionally and 550 MW cable of 11 kV would be changed.

He said that 830 MW more power would be available by June 2008 to meet the growing demand under KESC power expansion plan. Out of this, 276 MW would be available by the end of May 2007 and 500 MW by August 2007.

 

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KASHGAR (July 02 2006): A delegation of Rawalpindi Islamabad Chamber of Commerce led by its president Jalil Ahmad Malik held a meeting with Chen Ji, vice commissioner administrative office of Kashgar and discussed matters pertaining to trade and commerce between Pakistan and China.

The officials of Chinese departments of immigration and customs were also present in the meetings held on the sidelines of 2nd China Xinjiang Kashgar Central and South Asia Commodities Fair.

The week-long moot featuring diplomats, entrepreneurs and officials from 9 countries and 15 regions commenced on June 28 at Kashgar in China's Xinjiang province and would conclude on July 3rd.

Jalil Ahmad expressing gratitude to China for facilitating Pakistani businessmen at the fair, said some procedural formalities by the Chinese officials at Khunjrab Border were causing unnecessary delays in goods transportation. The Chinese-side assured of immediate redressal of all the problems being created at the border to boost trade and commerce between the two brotherly countries.

More than 450 Pakistani businessmen established various stalls and marketed indigenous products, which attracted attention of the visitors. The RCCI chief extended all out support to Chinese traders for `Kashgar Fair' being held at Lahore in September this year.

 

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KARACHI (July 02 2006): Chang'an Motor Corp China is planning to build Chang'an vehicles assembly plants in Pakistan to speedup its overseas sale. Sources quoting Chang'an chief executive officer Xu Liuping said that Chang'an Motor Corp will expand in the overseas market with its own-brand vehicles.

The company will use global resources to make high-quality own-brand vehicles and provide them to customers at home and abroad at reasonable prices.

Returning after participating in an international business conference held in China and attended by dealers from 28 countries and regions, sources said besides the Middle East, Southeast Asia, South America and Africa, Chang'an is also exploring the US and European markets.

Chang'an aims to raise overall sales from 630,000 vehicles last year to 1.5 million units a year by 2010, with more than half under its own brands.

The company's overseas sales rocketed by 143 percent to 15,000 vehicles last year. The company aims to sell 25,000 vehicles overseas this year.

 

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ISLAMABAD (July 01 2006): The country's external debt liabilities have virtually decreased substantially during the last seven years, State Minister for economic Affairs, Ms Hina Rabbani Khar said on Friday. Taking to a private TV, she said total external debt liabilities have been brought to $36.4 billion in June 2006 from $38.4 billion in 1999.

Tax to GDP ratio has also reduced significantly during the last seven years, adding the external debt liabilities were over 60 percent of GDP seven years ago. " Both external and domestic debt together stand at about 54 percent of GDP today," she said.

The decade of 80's was not suitable in terms of growth of debt as the debt liabilities on nation during the period were increased at the phenomenal ratio of 7.4 percent. Policy has been formulated to obtain concessional loaning only for development activities saying: We will continue to borrow from the international market for carrying out development activities." The average interest on international loans is less than one percent. In fact the real interest rate on most loans is negative, she said. Answering a question regarding payment on loans she said, "We actually prepaid domestic loans and not the external debts from the income generated from private proceeds."

 

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By Farhan Bokhari, Special to Gulf News

Pakistan's new financial year which began yesterday with promises of a sharp rise in government spending on national development, could well give a boost to the country's construction industry, with one qualification.

The rise in spending is predicated upon the government's revenues remaining on target, Pakistan's economic growth prospects remaining on track and the country going through yet another financial year without unexpected setbacks.

All three of these elements are enough to raise questions in Pakistan. Though the financial year which ended on Friday, closed with tax revenues for the year hovering above the official target, this has indeed not always been the case in the past.

On matters related to prospects for future economic growth, there is indeed room for anxiety for a number of economies including Pakistan, driven mainly by the sharp rise in global oil prices which have subsequently hit the global outlook.

As for unexpected setbacks, there is indeed no way to predict them.

But in the past year, Pakistanis have been powerfully reminded of unexpected upsets in the wake of the devastating earthquake which rocked the country and cause huge economic losses, not to forget the loss of many precious human lives.

Now, in spite of such overwhelming challenges, the government is determined to press ahead with the rise in development expenditure, hoping to pump more funds which could then revive the overall outlook.

Companies dealing with construction related material are bound to see a rise in sales.

Plans for the construction of roads, dams and other bits of infrastructure which are placed at the heart of the government's agenda, are believed to be central to rejuvenating Pakistan's economic outlook.

On the face of it, there's nothing in Pakistan's economic philosophy which would immediately trigger alarm bells.

And yet, even without ringing immediate alarm bells, Pakistan's economic prospects indeed must offer grounds for caution if not outright scepticism.

First and foremost, there's every reason for there to be concern about the country's ability to keep up its economic growth which is an absolute must to keep on living with the responsibilities thrown forward by expenditures tied to the new projects.

There are indeed examples of other countries too which invested heavily in the creation of valuable infrastructure, only to find that their investments got stuck when a subsequent economic slowdown also drew down the official revenue.

In Pakistan's case, there's no way to predict exactly what would come out from the global fallout triggered by high oil prices.

Corruption across daily life in some areas remains prevalent and Pakistan's ability to be able to cut wastage in government expenditure has therefore suffered.

The beginning of the new financial year, spearheaded by unprecedented large targets for expenditure, brings the added danger of people simply forgetting that Pakistan continues facing a large challenge, not just in consolidating its economic growth in the short term but more importantly, sustaining it together in the long run.

Without the assurance of such sustainability, there's all the more danger of vast sums of money poured by Pakistani taxpayers, being wasted and even squandered.

 

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Sunday July 02, 2006

ISLAMABAD: Prime Minister Shaukat Aziz has said that WAPDA will raise the supply of electricity to KESC to 700 MW immediately to help alleviate the difficulties being faced by the people of Karachi due to frequent power breakdowns.
These instructions were given to the Ministry of Water and Power at a high-level meeting chaired by the prime minister at the PM House which was attended by Governor Sindh Dr Ishrat ul Ibad, Chief Minister Sindh Dr Arbab Ghulam Rahim, Federal Minister for water and power Liaquat Ali Jatoi, City Nazim Karachi, Mustafa Kamal, Secretary Water and Power, Chairman WAPDA and KESC officials.

The prime minister said that keeping in view the problems being faced by the people of Karachi and the fact that it is the hub of business and industry, all out efforts should be made to tackle the problem of electricity shortage both on long and short term basis.

Mr Jatoi assured the prime minister that apart from increasing supply of additional power generation capacity. He said the KESC also needs to expand its transmission and distribution system to serve the increased demand of electricity in the mega city.

The KESC CEO informed the Prime minister that the company is taking all necessary steps to raise its power generation capacity and renovate and repair its transmission lines to prevent recurring outages. Besides, steps are also being taken to improve their customers’ service, he said.

 

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KARACHI: Overall cargo handling at the Karachi Port registered 13 per cent growth during the last fiscal year, crossing 32 million tons mark through 1,995 vessels against 1,768 vessels last year, said General Manager Port Operations Agha Danish at a press conference here on Saturday.

A massive 32.35 per cent growth was seen in dry cargo in 2005-06 as 21.60 million tons were handled compared to 16.32 million tons in 2004-05, he said. In this dry cargo, handling of bulk cargo increased by 41 per cent. This was mainly due to growing demand for fertiliser, coal, cement and sugar (0.8 million tons), he added.

Like the trend elsewhere, handling of containerised cargo was increasing at the Karachi Port, he said and added last fiscal year it recorded a growth of 25 per cent.

Liquid cargo handling remained low at 10.66 million tons compared to 12.29 million tons last year, Danish said. It would increase when white oil pipeline was connected to Karachi Port, he said admitting “currently this business is captured by Port Qasim.”

Due to increase in demand for imported vehicles, the KPT handled a phenomenal 57,352 vehicles last year compared to 18,699 previous year.

Coal imports handled in 2004-05 were 1.4 million tons, whereas 2005-06 witnessed a figure of 1.97 million tons, showing a growth of 41 per cent. He said it became possible because of effective utilisation of 224,000 square metres at Coal Yard and TPX. Many steps have been taken to minimise pollution created by coal handling. The KPT is planning to set up a coal handling terminal at a place distant from population.

Afghan cargo saw an increase of 64.48 per cent as 301,000 tons in transit cargo were handled by the port.

The KPT has inducted Backhoe Dredger Ali, with an average dredging capacity of 400 cubic metres per hour. It would start working within next two weeks and increase the depth of berths to 16 metres.

The KPT would be adding another dredger next year with much larger capacity for deepening the channel to 18 metres. This would allow the port to accommodate larger ships carrying more cargo. Deepening of berths and channel would take four to five years, he said.

The KPT had reduced its wet charges from July 1, 2006 in order to attract more business, he said. This is the second cut in wet charges in three years.

During the fiscal year 2005-06, the KPT also handled 2.158 million packages (70,000 metric tons) of earthquake relief goods, apart from 445 TEUs, free of charge from 72 ships. He said the amount of charges on this cargo came to Rs27 million.

 

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KARACHI (updated on: July 03, 2006, 18:10 PST): Karachi Electric Supply Corporation Chief Executive Officer Frank Scherschmidt on Monday said that due to timely intervention of the president, prime minister and Sindh governor, they had managed to obtain additional 100 megawatt of electricity from the Wapda, 'which would reduce our 'misery' at least by half'.

Addressing a press conference at a local hotel, he said: "We are not in a position to bring any 'magical change' at the moment. However, we will be standing with our consumers and continue to work on correcting the situation, whenever our 'weak network' breaks down."

He said that the KESC was facing problems of deteriorated power generation systems, insufficient operations and maintenance procedures and overloaded transmission system leading to energy losses.

Further elaborating the problems the CEO said that other pressing problems were absence of modern control systems for transmission and distribution, lack of preventive maintenance over years, lack of capacitors to stabilise power supply, network sabotage and conductor theft, lack of breakdown reporting system and dissatisfied consumers protesting on streets.

Frank Scherschmidt said that the KESC had faced similar difficulties in previous years also, but this year the load demand was increased by 200 to 300 megawatts.

He said that the KESC had completed some relief work in March and April 2006 and were working on addition of new transformers, capacitors and cables. He said that they had improved their own power generation form 1150 to 1250 megawatts.

"We have also evaluated a 10-year plan for improvement in the city power supply system and Insha-Allah we will do it for the satisfaction of our customers," the CEO said.

"In the year 2015, nine years from now, we would be doubling the whole KESC in terms of power generation, transmission, distribution and human resources. By then instead of 2200 megawatt they would supply 4400 megawatt," he hoped.

He said the new owners of KESC are fully aware of this development and will be continuously investing every year to 'steadily' upgrade the system for more generation, improved transmission, distribution and better consumer service.

He said that action were being taken this summer to overcome problems faced by customers. These actions include "halt to further deterioration of the power supply network and increase in efficiency of operation and maintenance".

Frank Scherschmidt said that from their network calculation, they had find out that the system was overloaded, which resulted in overheating of cables, wires, switches and transformers. For this the customers face fluctuation, low voltage, tripping and load shedding, so the KESC concentrated most on these affected areas for quick communication and fast repair.

He sought co-operation from public to save electricity. "To lessen the demand, all our consumers together can improve the situation so there is less tripping and load shedding."