Pakistan Economy - News & Updates - Archive

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SBP lists factors impeding economic activities​

Global recession, severe power outages and bad law and order conditions have taken their toll on domestic economic activities, said the State Bank of Pakistan in its monetary policy statement on Monday. The SBP said that dismal performance of large scale manufacturing (LSM) in July-February, FY09 with negative growth of 5.7 percent, and weaker than target growth of agriculture sector point towards the weaker real economic activities of commodity producing sector for FY09.

In tandem with weak performance of commodity producing sector, services sector is also likely to show a weaker growth in FY09 compared to FY08. However, the agriculture sector is expected to register a growth of 3.0 percent due to better output of major crops in Kharif season (particularly of rice and cotton) and expected bumper crop of wheat of around 23.5 tons.

This will provide some grace to overall real GDP growth, though agriculture performance will be lower than the original target of 3.5 percent. The SBP pointed out that LSM sector growth, in particular, the performance of export driven industries (particularly, textiles) has been negatively affected amid energy outages, deteriorated law and order condition, and most critically, weaker external demand due to the recessionary tendencies in most of the major trading partner countries.

The domestic demand for automobile, electronics and other consumer durables has also remained weak which is attributed to high interest rates on consumer financing and increased risk averseness of commercial banks about consumer financing due to rising NPLs in this sector, the SBP added.

Services sector is also expected to register a slower growth than the target of 6.1 percent for FY09. As a result, the prospect of overall growth remains modest and the economy is expected to register a growth of 2.5 to 3.5 percent in FY09, the SBP said.

 

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Traders welcome donors’ pledges of $5.28 billion​

ISLAMABAD: Traders and industrialists in a meeting held at Islamabad Chamber of Commerce and Industry (ICCI) welcomed donors’ pledges of over $5 billion in aid to bolster Pakistan’s troubled economy and fight war on terror.

They said according to some estimates, Pakistan suffered a loss of about $35 billion so far by becoming a key partner in war against terrorism and though this pledge is far less compared to magnitude of our economic damages.

However, they said it will prove quite helpful for Pakistan at a time when our economy is on the downward slide, says a statement of the ICCI.

The US and Japan pledged $1 billion each, Saudi Arabia added $700 million and the EU $640 million while the total pledged was $5.28 billion.

President ICCI Mian Shaukat Masud called upon the donors to provide their contributions pledged to Pakistan as early as possible to provide new blood to its sagging economy.

He said ‘Friends of Pakistan’ should provide more financial aid to Pakistan in proportion to the extent of our economic losses suffered for fighting terrorism.

The world should realise that economically strong Pakistan will prove beneficial for all.

He said government should utilise these contributions on improving the economic climate in the country through infrastructure and other projects to bring stability in the economy.

He said this aid should also be used for poverty reduction and social sector development projects, which so far did not get proper attention in government priorities. He said health and education sectors also need more financial resources to uplift people quality of life.

The ICCI president said being strategically located in the heart of Asia, Pakistan should step up its efforts to get easy access to all the growing markets of the world to create better economic opportunities for its economy in order to capitalise on its strategic location.

Pakistan, he said should further improve investor friendly policy, broad features of which include, proactive facilitation and guarantees of equal treatment of both local and foreign investors, easy tariff structures and a liberal regime on repatriation of profits.

Businessmen were of the view that government should plan to undertake further structural reforms in various sectors of the economy to attract investments both foreign and domestic.

Power sector should get top priority for investment both foreign and domestic. Power sector should get top priority for investment because power shortage is proving the biggest hurdle in promotion of business activities. app

 

[Neo]

Package of incentives for Gwadar EPZ blocked by Cabinet​

The Federal Cabinet has reportedly blocked a package of incentives for Gwadar Export Processing Zone (EPZ), secretly prepared by the Industries Ministry to "facilitate" one private entity, well-informed sources told Business Recorder on Monday.

"The Gwadar EZP comprised land owned by a private entity, which would derive undue benefit from the proposed package. Lessons learnt from the past must be kept in sight so as to obviate the painful reversal of special packages, the sources quoted the Federal Cabinet as saying in its arguments. It is not known, which entity owns land in the EPZ.

The sources said that the Federal Cabinet was informed on April 8, 2009 that a package of incentives, available to the Export Processing Zones (EPZs), had been developed and considered by the Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on September 23, 2008.

A committee, constituted by the ECC, had recommended that the proposed incentive package for Gwadar EPZ, should be extended to the entire master plan area of Gwadar. The Industries Ministry explained the details of the package to the Cabinet with the indication that the Finance Division and Revenue Division had certain reservations and wanted rationalisation of the proposal, the sources added.

Prime Minister Syed Yousuf Raza Gilani, who was presiding over the meeting, observed that the government was fully supportive to the development of Balochistan. However, notwithstanding, the other dimensions of Gwadar, it would be advisable to develop a package of incentives for the under-developed and deserving areas, including Balochistan.

The sources said the Cabinet also observed that a few provisions of the proposed package were contrary to the existing EPZ policy and tariff regime. The Industries Ministry, in its summary seen by this correspondent, revealed that the ECC in its September 23, 2008 meeting considered the summary and decided to constitute a committee under the chairmanship of the then Advisor to the Prime Minister on Industries (now the Industries Minister) to thoroughly examine the issue.

The committee, in its second meeting held on January 14, decided that proposed incentive package for Gwadar EPZ should be extended to the entire master plan area of Gwadar. The committee also decided that following package of incentives for Gwadar EPZ, in addition to the existing incentives available to EPZs, might be approved by the Cabinet.

-- Tax holiday for 20 years from the commencement of commercial operation of the project.

-- Permission to export up to 80 percent of the production from zone to tariff area of the country on payment of usual duties.

-- Incentives for exports available to projects established anywhere in the country shall be applicable to exports from the projects in the zone.

-- The plots to be provided to investors on lease (as per existing EPZ's procedure) at a reasonable rate be determined in consultation with the Balochistan government, keeping in view the size of investment.

-- Zero-rating of sales tax on supply of construction materials to EPZs investors as well as to EPZ, Gwadar, for development of zone infrastructure.

-- Exemption from stamps duty. After detailed discussion, the Cabinet constituted a committee, under the chairmanship of Industries Minister Mian Manzoor Wattoo and comprising Ministers for Commerce, Ports and Shipping and Prime Minister's Advisor on Finance Shaukat Tarin to revisit the matters and finalise a practical and viable proposal.

 

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Agri credit disbursement rises to Rs 151.861bn​

KARACHI: Disbursement of credit to the agriculture sector by commercial and specialized banks has increased by 9.57 percent year-on-year to Rs 151.861 billion during the first nine months of current fiscal year.

Agricultural credit disbursement, in absolute terms, rose by Rs 13.264 billion in July-March, 2009 period when compared with disbursement of Rs 138.597 billion during the same period of last fiscal year.

Overall credit disbursement by Allied Bank, Habib Bank, MCB Bank, National Bank of Pakistan and United Bank—five big banks—stood at Rs 74.365 billion during July-March period of 2008-09, period, compared with Rs 65.125 billion during the same period of 2007-08, depicting an increase of Rs 9.24 billion or 14.2 per cent.

Zarai Taraqiati Bank, the largest specialized bank, disbursed Rs 45.40 billion, up 14.76 percent when compared with Rs 39.561 billion during the same period of the last fiscal year.

Disbursement by Punjab Provincial Co-operative Bank stood at Rs 3.539 billion compared with Rs 3.935 billion during same period last fiscal year. Besides, 14 domestic private banks also loaned a combined Rs 28.557 billion, compared with Rs 29.975 billion disbursed during the same period of last year.

The State Bank of Pakistan has set an indicative credit disbursement target of Rs 250 billion for the agriculture sector for the current fiscal year, which is higher by Rs 50 billion or 25% than last fiscal year’s target of Rs 200 billion and Rs 38 billion or 18% higher than the actual disbursement of Rs 212 billion in FY08.

 

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Long-term finance facility: SBP allows one-time refinance of loans for non-textile sectors​

KARACHI: The State Bank of Pakistan has decided to allow a one-time opportunity for export-oriented industries to refinance their outstanding long-term loans availed from banks/DFIs for import/purchase of plant and machinery with loans under SBP’s Long Term Finance Facility (LTFF) Scheme.

According to a circular issued by the State Bank on Tuesday, only those long term loans will be eligible for refinance under the LTFF Scheme which had been disbursed by banks/DFIs from 01-01-2005 to 31-03-2009 to the exporters of eligible sectors/sub-sectors mentioned in Schedule 1 of the Scheme excluding textile & garments.

“No loan disbursed prior to the January 1 2005 shall be refinanced under these arrangements,” the circular said. This refinance facility shall be a one-time opportunity effective from April 21, 2009 and will remain valid only up to June 30, 2009.

The circular pointed out that exporters of textile and garments will not be eligible for refinance under these arrangements. They will, however, continue to be entitled for fresh financing under LTFF Scheme provided their industry is covered in the list of eligible sectors/sub sectors of the Scheme.

According to the circular, refinance to banks/DFIs shall be provided only to the extent of 50 percent of outstanding principal amount at the time of grant of refinance. Remaining 50 percent shall continue to be financed by the banks/DFIs from their own sources as per original terms & conditions of respective lending institutions, it said. Similarly, no refinance shall be allowed to non-performing loans (NPLs) classified under SBP Prudential Regulations.

It said that refinance under the arrangements shall be provided at the markup rate prevailing at the time of securing the refinance from the offices of SBP-BSC under LTFF Scheme. The rate of mark-up shall be applicable from the date of securing refinance under the LTFF Scheme. The banks/DFIs shall prepare the repayment schedule for refinanced portion (principal amount only) in line with the repayment schedule already agreed at the time of sanction / disbursement of the original loan. They may, however, amend the repayment schedule in a way that the borrowers can make repayments in equal quarterly or half yearly installments as mentioned in LTFF Scheme. However, total tenor of loan shall remain the same.

The circular said in case the borrowers repay their obligation in part or in full on or before due date(s) the banks/DFIs shall adjust the loan amount on pro-rata basis keeping in view the share of financing made by them through their own sources and refinance availed from SBP. They shall repay SBP’s portion of loan amount so received from the borrower immediately, but not later than two working days, to the concerned office of SBP-BSC, failing which fine for late adjustment will be charged from the PFI at the rates prescribed in the Scheme, it added.

Meanwhile, in a separate circular the State Bank has also allowed financing for plant, machinery & equipment under LTFF to be used by the export-oriented projects in sub-sectors/processes of spinning sector including doubling, twisting, combing, slubbing, lycra, and yarn dyeing.

 

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Pakistan doing well on economic front: WB​

ISLAMABAD: The World Bank has stated that the scale of the donor pledges made on April 17 in Japan was a manifestation of regard for the tough measures the economic team led by Shaukat Tareen has taken in Pakistan in the past few months.

The complimentary message for the Pakistan government and Shaukat Tareen came from WB vice-president Isabel Guerrero at the end of Friends of Democratic Pakistan (FODP) conference co-hosted by Japan and IFI’s.

The message said the present government took robust stabilising measures and entered into an International Monetary Fund Stand-By Arrangement on November last year which remains on track.

In a world crowded with problems, Pakistan won important aid commitments, it said.

“The international community rallied to support Pakistan’s economic programme with more than $5 billion in funding designed to meet its immediate needs and protect expenditures on safety net and human development initiatives critical for poor people.”

Through this difficult adjustment made all the harder by a global downturn Pakistan has done well to protect the poorest 25 percent of its citizens, said the WB vice-president for South Asia in the message.

The Government of Pakistan shared development plans at the conference and committed to tough measures that would sustain macroeconomic stability while rolling out expanded social safety nets and laying the foundation for accelerated growth.

Development partners supported new social safety net programmes being introduced by the government.

The World Bank is working with Pakistan to refine the targeting of these programmes to make sure support reaches the poorest citizens in a transparent manner, the message underlines.

The successful monitoring and evaluation of this programme was of particular concern to donors.

The Donors’ sideline evaluation of the government’s ongoing 9-point economic reforms agenda has lent credence to the scale of robust efforts Pakistan has undertaken in core economic areas like macro-economic stabilization, social protection, agri reforms, industrial competitiveness, Human Resource Development, integrated energy generation plan, capital market reforms, Public-Private Partnership and administrative reforms.

Redesigning the internal fiscal policies through various economic structures undertaken by Central Bank is part of the package of economic measures and monetary operations put in place by the government.

 

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Zardari approves mega uplift projects for Sindh​

President Asif Ali Zardari on Monday presided over a high-level meeting on the development projects in Sindh at Bilawal House here. The President approved Shaheed Benazir Bhutto Transit CNG Bus Project for Karachi, which would be a public transport scheme under which 500 environment-friendly CNG buses would ply on the city roads.

Only women would have the right to ownership besides 50 percent of the seats would be reserved for women passengers. The scheme would be launched by City Nazim Karachi, who would also oversee implementation of the project.

The federal government would provide an interest subsidy of Rs 700,000 per vehicle. The number of buses in Karachi under the project would increase to 4000 by 2012.

Karachi Mass Transit project: The government would provide sovereign guarantee for the KMT, which would be carried out on BOO basis. International competitive bids would be invited soon. This scheme would be launched immediately.

Karachi Circular Railway: Karachi Circular Railway is being revived with a cost of $1.6 billion with international assistance. The President desired that the scheme must be implemented as soon as possible without delay. The President said that a resettlement plan be immediately prepared for the rehabilitation of the people settled on the way of KCR.

Lyari Express Way: About Lyari Express Way, the President approved the financing of the project. The project would be implemented immediately and the Planning Commission will finance it without delay. The President desired that the Governor and Chief Minister undertake vertical development for the settlement of those who have been displaced due to Lyari Express Way.

Bus Rapid Limit System. The President approved the Bus Rapid Transit System (Bagota Model), implemented by City Nazim of Karachi immediately and without delay. Three corridors initially will be developed in Karachi.

a. Nagan Chowrangi to Cantt Station

b. Saforan Goth to Numaish Chowrangi

c. Orangi to Board Office Chowrangi

KARACHI-HYDERABAD MOTORWAY: The President directed construction of Karachi-Hyderabad Motorway as a modern motorway in conformity with international standards. It was also decided that work on Larkana-Khairpur bridge will be accelerated for timely completion.

The meeting revived the road networks in Sindh and directed SHA for completion of works on priority basis on Sukkur-Shikarpur Jacobabad Express way and Rato dero-Sehwan additional carriageway. Karachi Sewerage Scheme was also approved.

THAR COAL: The President expressed desire to expedite the Thar Coal project and directed that the development projects in infrastructure sector must get the top priority and the quality should be in conformity with international standards.

REALIGNMENT OF RBOD-III: Regarding the issue of realignment of RBOD-III, the President directed that the consultants be assigned with the task of proposed change of alignment. He also directed that a meeting of Sindh and Balochistan public representatives be held to resolve outstanding issues.

The President further directed that scheme be prepared for improvement of Phuleli canal located in Badin District. The President also reviewed progress on the Hyderabad-Mirpurkhas dual carriageway. The meeting was informed that the project is at an advanced stage of technical evaluation and will be ready for approval shortly.

The President stressed improvement of canal system and lining of distributaries and minors to ensure water conservation and supply to tailenders.

The LBOD: Regarding the sufferings of people of Badin and Thatta, Wapda should come up with concrete proposals to restore the issues of LBOD and tidal link on permanent basis. For irrigation water use optimisation, the President desired that Sindh government should prepare extensive projects for drip and sprinkler irrigation to help poor farmers of the province.

The meeting was attended by Chief Minister Syed Qaim Ali Shah, Governor Dr Ishratul Ebad, Federal Communication Minister Dr Arbab Alamgir, Federal Minister for Water and Power Raja Pervaiz Ashraf, Sardar Aseff Ahmed Ali, Deputy Chairman Planning, Secretary General to President Salman Farooqui, Provincial Ministers Dr Zulfiqar Mirza, Agha Siraj Durrani, Mir Nadir Magsi, Shazia Marri and other federal and provincial officials.

 

[Neo]

Record Gulf remittances bleak comfort for Pakistan​

KARACHI: Pakistani expatriate workers wired home a record $739.4 million last month, but experts warn job losses from the global credit crunch could soon slash remittances and rock the economy.

Pakistanis working overseas sent $5.66 billion home during the first nine months to March 31, 20 percent up on the same period last year, said the central State Bank of Pakistan. Remittances in March surpassed the previous monthly record of $673.5 million in December 2008 and clocked up a significant increase from expatriates working in the Gulf countries, it added.

Pakistanis in the United Arab Emirates (UAE) sent back $175 million, up from $112 million in March 2008, and 151 million from Saudi Arabia compared to $120 million in the same month last year, it added.

"The increase will certainly help our foreign exchange reserves to grow but we should not be happy," independent economist AB Shahid told AFP.

Pakistan's economy relies heavily on its roughly four million expatriates -- around two million in the Gulf and the rest divided largely between Britain and North America.

Their remittances account for 4.4 percent of Pakistan's gross domestic product and the $5.66 billion paid so far this fiscal year make up around half the country's foreign exchange reserves of $11.22 billion. But thousands of Pakistani workers have lost jobs, mainly in the Gulf. Low-paid Asian workers have fallen victim to the global credit crunch as companies run short of business and money.

A report published in the UAE in February showed that $582 billion worth of building projects (45 percent of the total) had been put on hold due to the slowdown. "Our exchange reserves will remain healthy this fiscal year but next year a decline in remittances will certainly hit us," Shahid said. Most Pakistanis are unskilled workers associated largely with construction, transport and civic services such as sanitation in the Middle East.

The ruler of Dubai, Sheikh Mohammad bin Rashed al-Maktoum, acknowledged this month that economic growth in the UAE would probably fall to around three percent in 2009, down from 7.4 percent last year.

Private recruitment companies say the slowdown means fewer jobs.

"We had long queues of people wanting to go to the Middle East last year but now their number has declined significantly," said Illahi Bakhsh, owner of the Personnel Services Bureau, one of hundreds of Pakistani recruitment companies.

The economic downturn has closed scores of industrial units in Pakistan, rendering thousands unemployed. Soaring at 20 percent, inflation is hammering the ordinary man on the street and squeezing prices.

Wilting under extremist attacks and a fragile economy, the International Monetary Fund agreed last November to give Pakistan a 7.6 billion dollar loan to avoid a balance of payments crisis. International donors pledged $5.28 billion in Tokyo last week to stabilise the frontline state in the US-led "war on terror". Analyst Rauf Nizamani believes there is some hope provided returning workers invest their cash in small businesses.

"They could still contribute to the economy if they invest in small businesses and not use the money on private consumption."

Businessman Majyd Aziz was optimistic, noting that people were increasingly sending money home officially rather than through backhand channels. "Certainly, Pakistanis and other Asians are suffering lay-offs but our remittances have also increased because most Pakistanis now use official channels instead of hundi," he said. The traditional method -- by which money is transferred within days through agents anywhere in the world to even the most remote village -- is illegal in Pakistan, but experts say most expatriates rely on the system. The government is now campaigning to dissuade expatriates from patronising moneychangers allegedly involved in hundi. afp

 

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CDWP likely to approve 51 projects costing Rs 59.6 billion on April 30​

Central Development Working Party (CDWP) of Planning Commission is likely to recommend and approve 51 development projects worth Rs 59.6 billion in its meeting scheduled for April 30, it is learnt here on Monday. According to the agenda, a copy of which is available with Business Recorder, CDWP will consider 6 projects in energy sector worth Rs 23.6 billion.

Government is focusing on the energy sector projects to overcome the current power shortfall. The projects that CDWP will consider for approval include Electricity Distribution and Transmission Improvement Project (MEPCO) (Modified) worth Rs 195.606 million, Electricity Distribution and Transmission Improvement Project PC-II (IESCO) costing Rs 144.230 million, Rs 183 million Interconnection of IPPs with National Grid (Phase-II) for dispersal of power from 200 MW Nishat Power near Chunian project, Diber Khawar Hydropower project (130-MW) costing Rs 14217.395 million, Khan Khawar Hydropower project (72MW) worth Rs 7652.645 million and 4MW Hydropower Project Thak Chilas, (modified PC-I) at the cost of Rs 1113.90 million.

In Transport and Communication sector, the CDWP may recommend another big project to ECNEC for approval is Environment Friendly Public Transport System for major urban centre of Pakistan (Karachi, Lahore, Quetta, Peshawar, Faisalabad, Multan, Rawalpindi/ Islamabad, Hyderabad and Sukkur (PPP) at the cost of 5.billion. The nine other projects are

improvement and up gradation of existing single lane metalled road to double lane metalled road, Kohala - Dhirkot (Mujahid-e-Awal Road ) Length 27 k.m. Distt. Bagh (amended PC-I) worth Rs 941.039 million, Construction of PCC Road, District Dir NA-22, Rs 470.000 million, Construction of Suspension/ Arch Bridge at Distt. Dir, NA-33, Rs 217.261 million; Const. of Matalled Road from Gandha Singh to Kanganpur road along Dipalpur Canal, Distt. Kasur, Rs 418.493 million; Widening and Rehabilitation of Matalled Road from Radha Kishan Road to Khundian Dist.

Kasur, Rs 238.670 million; Widening & Black Topping of Road from Jamrud to Mullahgori (17-km) from K.M. No 23 to 39 from Lowera Maina to Azam Banda (Phase-V) Khyber Agency, Rs 418.739 million; Improvement Widening & B/T of Road from Takhta Baig to Mathani via Bara By Pass and Sheikhan (30-KMs), Rs 466.420 million; Construction & Black Topping of Road from Jamrud via Mullagori to Landikotal (Phase-IV) 10 kms Khyber Agency Rs 274.790 million;

Widening/ improvement of Road from Gillwala to Ghumanwala via Bhuttla Jhanda Singh and Qila Didar Singh Length=38 kms in District Gujranwala, Rs 281.677 million; Construction/ Black topping of road from Hub to Dureji District Lasbella (length 129.00 km) Rs 1000 million; Construction of Link roads from Kohlu town to By pass, Rs 79.865 million; Construction of various black topped road to link different villages with main Kohla town, Rs 222.245 million; Construction of By pass road at Kohlu, Rs 197.810 million.

Establishment of the Highway Research and Training C0entre (HRTC) Rs 914.810 million with foreign component of Rs 566.840 million; Diamer Basha Dam project - Construction of By pass "Shatial - Thor Nullah - Existing Karakorum Highway (KKH) Rs 3,928.558 million.

In water resources, CDWP will consider 12 projects for recommendation and approval. These projects are Rs 2,478.344 million Sukkur Barrage Rehabilitation and improvement project, Sabakzai Dam project (2nd revised) worth Rs 2005.545 million; Research Studies on Drainage, land reclamation, water, management and Use of Drainage water, Rs 426.902 million;

Chashma Right Bank Irrigation project stage-III Remedial measures in NWFP portion, Rs 563.490 million; constructing additional VR bridges on Dists and minors in Chashma Right Bank Canal Division, Taunsa Sharif (amended) Rs 72.209 million; construction of office building for the office of Indus River System Authority (Revised PC-I) Rs 68.863million; acquiring consultancy services for preparation of detailed design of 75 small dams. Detauked syoervision etc, located in Kohitan and Nagarpakar areas on Sindh Rs 162.000 million; providing protective measures Muhammad Shahwala Flood Bund Bursla Branch against erosion by River Ravi (Guide Spur Road 419+420 Burala Branch) Rs 50.392 million; construction of J-Head Super No 2 of Pir Adil Minor and I-I Disty of Link Rs 141.497 million; construction of guide head supr at RD 165+000 Link Rs 53.033 million; construction of SPUR No 34 & 35 along Right Bank of River Indus District DI Khan (NWFP) Sub Work Construction of SPUR No 34 at the cost of 198.752 million and extension of stone apron pitching along K.K. Bund Mile 11/3 to 12/4 and Rcoapment of Damage Apron pitching from Mile 10/7 + 550 to 11/1+110 in Begari Sindh Feeder Circle amounting to Rs 2623.000 million.

In agriculture and food sector, poverty reduction through small holders livestock and dairy development worth Rs 2500.000 million will be tabled before CDWP for consideration. In Forestry and Wildlife, establishment of model forestry park near Rawal lake Rs 239.017 million is expected to get nod of CDWP. In Physical Planning & Housing the project is to be considered are constriction/replacement of new and existing water supply line under Special Development Plan Lyari, at cost of Rs 370.410 million, construction/replacement of new and existing sewerage system under special development Plan Lyari worth Rs 367.002 million, rehabilitation and improvement of lighting system of road/streets and playgrounds at Lyari Town Rs 191.454.

Projects in Industries and Commerce include "Foundry Service Centre Lahore" worth Rs 179.4 million and Rs 435.636 million may get approval. Devolution and Area Development projects are Mohmand and Bajur Area Development Projects (Phase 111) costing Rs 125.195 million and in education, CDWP will consider one project that is construction of Inter Girls College at Kohlu (Revised) amounting to Rs 125.590 million.

In Higher Education, CDWP may approve establishment of Women University Multan (Prime Minister's directive) costing Rs 1715.830 million and strengthening of Allama Iqbal Open University Islamabad at the cost of Rs 389.655 million.

CDWP is expected to clear Position Papers (PPs) that include immediate needs of the University of Science and Technology Bannu worth Rs 427.861 million and Rs 485.567 million Strengthening of Institute of Space Technology (Phase 1) project. The other project is development of University of Balochistan Quetta worth Rs 971.878 million. In Labour and Manpower, short term vocational training courses under Prime Minister Special Initiative for Hunarmand Pakistan Programme costing Rs 106.994 million and establishment of a National Training Centre (NTTC) Kasur at the cost of Rs 494.459 million will be tabled before CDWP for consideration.

In Governance sector, two projects will be considered that are Institutional Strengthening and Efficiency Enhancement of Planning Commission amounting to Rs 494.459 million and Rs 79.481 million and project of establishment of office of Inspector General Development Projects Balochistan (Phase 11). In health establishment of 400-bed woman hospital and chest disease centre at Ralwapindi at the revised cost of 2.643 million and construction of 50 bedded hospital at Kohlu costing Rs 225.704 million will be tabled before the meeting.

 

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Pakistan offers farmland to foreign investors​

Pakistan is offering one million acres of farmland, protected by a special security force, for lease or sale to countries seeking to secure their food supplies, an official from the ministry of finance said on Monday. Gulf Arab countries, mainly reliant on food imports, have been seeking farmland in developing nations to secure supplies and have expressed interest in Pakistan's offer.

Donors including the United States, Japan, Europe, Saudi Ararbia and Iran pledged more than $5 billion in aid over two years at a conference in Japan this month to help Pakistan as it battles militants and repair its economy. "We are offering one million acres of land across Pakistan for investors who want to buy or lease the land for a long period of time," said Waqar Ahmed Khan, the Federal Minister of Investment.

Pakistan's government is now in talks with Saudi Arabia, the United Arab Emirates, Bahrain and other Arab states, said Khan. "And very soon we will be signing the deals," he added. The ministry, which was formed in October to promote foreign investment in Pakistan, will also provide investors with a legislative cover to protect them from changes in the government, Khan said in an interview to Reuters and a local newspaper.

"We want to give Pakistan a corporate style and corporate look and with that we also want to protect investors from any changes that happen politically, which never used to happen before," he said, adding parliament would approve this within three months.

"For the first time I can say that whole government including the upper and the lower house and the opposition are on board for this project and are supporting the idea of improving Pakistan's economic situation." Khan said the ministry will also make sure that all machinery being brought in will be exempted from duty charges.

 

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Fahim for improving quality of export goods​

ISLAMABAD: Federal Minister for Commerce, Makhdoom Amin Fahim on Wednesday suggested exporters to focus on quality improvement and efforts for bringing innovations into designing to make the product of international standards.

A six-member delegation of Pakistan Carpet Manufacturers and Exporters Association called on him and discussed the problems faced by the industry.

The minister showed concern over the decline in carpet exports from $146 million to $103 million during the current year.

The minister assured complete support of the Ministry of Commerce and Trade Development Authority of Pakistan (TDAP) to facilitate the carpet exporters. Chairman of Pakistan Carpet Manufacturers and Exporters Association Akhtar Nazir Khan said that carpet export sector had remained one of the main export sectors and about 2 million people were attached to the industry. staff report

 

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Non-textile exports continue to post growth​

KARACHI: The handsome growth in non-textile exports helped to avert the major loss in the overall export volume caused by dismal show of textile products. The export of non-textile products posted 10 percent growth to $6.220 billion in first nine months of current financial year over $5.648 billion in the corresponding period of previous year.

Whereas textile exports registered 7.58 percent negative growth to $7.193 billion in the period under review against $7.783 billion in the same period of last financial year.

Rice, fisheries, fruits, footwear, engineering goods etc, trigger the substantial growth in the non-textile products. The strong performance of the non-textile sectors, analysts and exporters pointed out, was mainly driven due to commodities, which so far performed well. Apart from commodities, the various categories in non-textile areas are also struggling hard to compete in the international market.

The talks of expanding the export base has been heard for a long time, they added, but it is still confined to few sectors. Earlier this textile sector, which was leading in the export volume and stabilizing the export figures and now this time it was commodities like rice and fisheries, which have exceptionally well particularly the fisheries that is facing the European Union (EU)’s ban on its export.

Official export figures indicated that export of rice rose by 52.66 percent in July-March period of 2008-09. The export of Basmati rice increased by 42.05 percent and export of other varieties of rice jumped 66.05 percent during the period under review.

The export of fisheries and its products rose by 21.17 percent, fruits 3.13 percent, vegetables 12.29 percent, spices 15.58 percent, meat & meat preparations 16.01 percent.

The export of sports goods declined 2.21 percent. Export of leather goods fell 19.74 percent and carpets export decreased by 29.67 percent. Cutlery export fell 2.83 percent, whereas onyx manufactures are up 113 percent.

Chemical and pharma products export increased 7.49 percent, engineering goods 39.50 percent, jewellery 20.04 percent, molasses 134 percent, cement 60.42 percent.

The export of auto parts and accessories decreased 36.41 percent, gems 59.60 percent and furniture 19.49 percent. The export of petroleum products and coals fell by almost 23 percent.

In textile group, the export of cotton yarn fell by 15.52 percent, cotton carded 5.62 percent, yarn other than cotton yarn 53.39 percent, knitwear 4.80 percent, bedwear 11.80 percent, tents 19.29 percent, readymade garments 13.10 percent.

 

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Pak-Saudi bilateral trade volume crosses $4bn/annum​

ISLAMABAD: Saudi Arabia is among the 15 export partners of Pakistan with which bilateral trade volume has gone above $4 billion per annum and this would be further increased in the future.

This was stated by the President Islamabad Chamber of Commerce and Industry, Mian Shaukat Masud during a meeting with Ambassador of Saudi Arabia to Pakistan, Ali Awadh Assari, who paid a farewell visit to ICCI on Wednesday.

Speaking on the occasion, Ali Awadh said that there was a need to devise a short- and long-term strategy to boost the trade and business relations between the two countries. He asked for encouraging efforts for boosting direct trade between Pakistan and Saudi Arabia to benefit the people of both the countries.

He said that due to the involvement of a third country, prices of goods more than doubled because of taxes and the quality of the goods like fruit and vegetable was also decomposed. The ambassador suggested to increase the number of cargo flights between both of the countries to save extra tax expenditure as well as quality of a product. He urged the local business community to interact with the Saudi businessmen to further boost trade in the fields of surgical instruments, furniture, leather goods, fruit and vegetable.

The people from every corner of Pakistan are serving in different sectors including health, education, construction and communication, which was a symbol of trust and historic friendship between both the countries.

The ambassador informed that Saudi embassy was processing about 1,400 work visas per day to facilitate the business community.

He said that Pakistan was facing many challenges including extremism and terrorism that can be resolved only through home made strategy, adding that best minds and leadership was present here to meet any challenge. Saudi Arabia would continue its diplomatic and financial assistance and efforts to help Pakistan for the development and prosperity of its people.

President ICCI thanked the ambassador for his farewell visit to ICCI and said that Saudi Arabia has always provided considerable economic and financial assistance, which played an important role in the economic development.

He asked for simplifying the visa process to further facilitate the business community in the country.

ICCI chief said that there were 350 Pakistani investors in the Kingdom who have obtained licenses from Saudi Arabian General Investment Authority and have established companies in various fields.

 

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SBP sees inflation at eight percent in 2010​

The State Bank of Pakistan on Monday said that inflationary pressures are easing and average inflation is expected to come down to 8 percent in fiscal year 2010. The SBP, in its monetary policy statement said that reduced domestic demand pressure, as evident in shrinking twin deficits, is expected to narrow the output gap and reduce inflation.

However, supply shocks such as power shortages and worsening law and order situation may delay the eventual fall in inflation. In fact, the persistence in inflation is largely due to these factors and is evident in various inflation indicators. Nonetheless, other supply side factors such as falling international commodity prices and improved food supply coupled with strong expectations of low inflation in the near future will have a beneficial impact on current inflation.

The SBP pointed out that declining trend in inflation now appears robust as headline CPI inflation (YoY) has come down to 19.1 percent in March, 2009 from the peak of 25.3 percent in August, 2008. "Present declining trend is likely to continue as indicated by an expected average inflation of around 14 percent in Q4-FY09 and 8 percent for FY10," the SBP added. However, due to strong inertial impact, average CPI inflation for FY09 would remain around 21 percent.

Core inflation, measured by 20 percent trimmed mean, which remained firm around 21.7 percent since October 2008, declined to 19.3 percent in March 2009. Similarly, non-food non-energy (NFNE) measure has also eased to some extent. On month on month basis, both core inflation measures, have reverted to levels prevailing in FY07 (0.5 percent) after rising above 2.0 percent during earlier month of FY09, which provides further support to expectations of falling inflation in the coming months, the SBP said.

 

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Poverty reduction: Pakistan undertaking home-grown strategy ​

Pakistan is undertaking a home-grown strategy for growth and poverty reduction that will be implemented with the support of the IMF and other development partners.

According to a statement issued by Finance Division here on Wednesday, development partners at the meeting of Friends of Pakistan (FOP) have pledged new financing for Pakistan totalling more than $5 billion over the next two years to provide additional support to social safety nets, human development, and pro-poor development expenditures.

Donors also reaffirmed their commitment to the existing programs (currently totalling more than $15 billion dollars) for ongoing and medium-term development initiatives in Pakistan, reduce poverty and enhance economic growth.

The action of development partners included financial support, but also broader support development and stability in the regional context of Pakistan and its neighbours. .A meeting of 'Friends of Democratic Pakistan' preceded the donor conference where development partners welcomed and took into account the government's commitment to address security concerns and noted the need: for strong regional co-operation to address common issues.

The meeting addressed Pakistan's reform program, and financing needs. The Government of Pakistan presented a statement outlining its overall approach to addressing the interlocking challenges which it confronts. Development partners noted the need to maintain reform momentum of particular tax revenue generation and its impact on macroeconomic planning. Pakistan's short-term financing needs focus on protecting poor, maintaining pro-poor services, and continuing programs in health, education and social protection. In particular, development partners were supportive of expanding social safety nets. Participants emphasised the importance of ensuring transparency and good government in implementation of the safety nets, as well as rapidly increasing capacity for monitoring and evaluation.

There was broad support for Pakistan's Poverty Reduction Strategy and its articulation at the meeting with a focus on safety nets, skills developments, social mobilisation, education and health. Delegations also recognised the importance of accelerating investments in infrastructure, agriculture, power, and irrigation over the medium term. The importance of term strategy was emphasised, particularly given the current security challenges.

Participants of the FoP conference also noted concern about the security situation in Pakistan, and the impact on development, the investment climate, and growth. The meeting addressed how to undertake effective development work, and the meeting addressed how to undertake effective development work in the face of rising terrorist attacks. The Friends of Democratic Pakistan, which took place immediately prior to the Donors Conference, addressed security issues, development, and regional co-operation.

Participants recognised the need for ongoing co-operation among partners and the government with a view to increasing co-ordination, making funding both more predictable and more accountable and strengthening implementation. The meeting concluded that the Government of Pakistan will host a Pakistan Development Forum (PDF) within one year's time.