Pakistan Economy - News & Updates - Archive

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KARACHI, July 5: Pakistan’s exports to Europe, including 15 EU countries, have shown a small and insignificant growth of five per cent in the year 2005-06 but it has maintained an impressive growth of 25 per cent to USA. Export earnings in other geographical regions are too small and insignificant but growth ratio on a small base looks deceptively impressive.

Bangladesh has emerged as a big competitor for Pakistan in the EU market, where it enjoys the duty advantage of 12 per cent under the GSP scheme. Official statistics show Pakistan’s total exports at $2.63 billion in eleven months of 2005-06 as against $2.52 billion last year.

“We get Bangladesh’s spillover orders from our EU buyers”, Majyd Aziz, a former chairman of SITE Association of Industry and a leading readymade garments dealer said. Textile leaders in Pakistan say that their counterparts in Bangladesh enjoy lot of advantage over them in utility cost, financial charges and labour wages. Low wages have caused a big labour unrest in Bangladesh, where 14 factories are said to have been burnt down in last few weeks.

But Pakistani exporters have shown an impressive growth of 25 per cent in USA market from where an amount of $2.68 billion were netted during July 2005 to May 2006 period as against $2.14 billion in same period last year. Exporters were able to maintain a growth in the US market because of political considerations. Yet, China, Bangladesh and India are reported to be doing far better than Pakistan.

In about 29 countries of East Europe, Pakistan’s presence in export market is insignificant and on a very small base the growth is 35.61 per cent. Total export earnings being made from these countries amount to $160.69 million. Russian Federation remains the biggest market for Pakistan from where $37.66 million were netted.

In the UAE, Pakistan’s exports in eleven months of 2005-06 amounted to $862.24 million that showed 24.31 per cent rise. China, India, Thailand and Malaysia have a clear edge over Pakistan in Dubai and other UAE countries which are home to the largest number of Pakistani expatriates.

There are 57 African countries that figure on Pakistan’s trade map and collectively these absorb a total of $582 million worth of goods in July 2005 to May 2006 period. South Africa is the biggest market of Pakistani goods that bought a total of $142 million of goods, followed by $42,308 million in Togo, $39.62 million in Kenya, $37.26 million in Egypt, $35.87 million in Morocco, and $28.55 million in Nigeria.

Pakistan’s position in 34 Asian countries, other than those in the Middle East, is relatively better. Pakistan’s exports to these countries amounted to $2.29 billion, which is 26 per cent higher than last year. China, including Hong Kong, is the traditional buyer of Pakistani goods but the overall export amounts to $734.80 million. Afghanistan is an emerging market that absorbed Pakistani goods worth $643.58 million.

Export of cotton fabrics increased by about 20 per cent to $1.37 billion in the current fiscal year. Main markets were USA, Turkey, Hong Kong, Italy, Bangladesh, Sri Lanka and other countries. In Bangladesh, Turkey and Sri Lanka Pakistani fabrics were used to manufacture bed sheets for re-export to the EU and other countries.

An impressive growth of more than 30 per cent was seen in export of readymade garments, which fetched about $853 million. Main markets were USA and European countries. Knitwear exports increased marginally by 3 per cent to $1.13 billion. The main markets were USA, Italy, Netherlands, Canada and other EU countries.

In last eleven months exports met official targets in four months and remained below the targets in seven months. The official export target for 2005-06 was $17 billion against which $14.96 billion have been realised in eleven months leaving a gap of more than $2 billion to be earned in the month of June.

http://66.201.122.226/2006/07/06/ebr2.htm

 

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KARACHI, July 5: The Karachi Customs collected Rs144.700 billion revenues during the outgoing fiscal year 2005-06 as against Rs124.125 billion last year, showing an increase of 16.5 per cent, officials said here on Tuesday.

The increased economic activity resulting in a record rise in imports during the fiscal year 2005-06 helped the Karachi Customs record an all-around surge in revenue collection at the customs stage, including income tax, sales tax and federal excise duty.

During the period under review, the Karachi Appraisement collected Rs70.217 billion as customs duty against Rs57.582 billion collected last year, showing a rise of 23.67 per cent.

Despite the fact that duty slabs generally stood static, with maximum at 25 per cent and minimum at five per cent and a few others at higher level, the revenue collection primarily rose owing to higher imports and efficient working of the customs authorities who are now mostly functioning on automation by using computers in most of their departments.

The brisk industrial activity resulting in higher imports of raw materials and some capital goods is reported to be major factor for an increase in revenue collection at the customs stage.

The collection of sales tax surged by 12.54 per cent to Rs58.990 billion as compared to Rs52.413 billion last fiscal (2004-05). The income tax collection rose by 9.14 per cent to Rs14.770 billion. Similarly, the collection of federal excise duty increased by 20.47 per cent to Rs722 million from Rs599 million last fiscal year.

The officials said the Appraisement Collectorate, Karachi Customs, recorded a fabulous growth in revenue collection in the last month (June) of the outgoing fiscal 2005-06 by collecting Rs18.108 billion as against Rs13.307 billion in the corresponding period last year, showing a growth of 36.03 per cent.

The revenue collection on account of customs duty in June 2006 stood the highest at Rs10.454 billion or 41.11 per cent higher than Rs7.408 billion collected in the corresponding period last year. The sales tax collection ranked second on recording 37.85 per cent surge to Rs6.221 billion as compared to Rs4.512 billion in the same period last year.

However, the revenue collection under the head of income tax recorded a nominal growth of 2.67 per cent at Rs1.376 billion as compared to Rs1.340 billion last fiscal year (2004-05).

The federal excise duty collection rose by 23.03 per cent to Rs55.93 million in June this year from Rs45.48 million in the same month last year.

The customs authorities put their entire energy on the last day i.e. June 30 of the outgoing fiscal year in order to achieve higher revenue collection. The Appraisement Collectorate collected Rs2.867 billion on June 30, recording a growth of 79.79 per cent as against the corresponding period last year when collection stood at Rs1.595 billion.

Taking note of the Karachi Customs performance and achievement of record growth in revenue collection, the Central Board of Revenue gave awards to the officers and some staff members.

The CBR rewarded additional collectors Wasif Memon and Faiz Ahmed Rs50,000 each. Besides, assistant collector Yaseen Murtza and principal appraiser Shaheen Farooq have been rewarded Rs25,000 each. Collector Appraisement Musarat Jabeen has also recommended more names for special rewards.

 

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ISLAMABAD (July 07 2006): Prime Minister Shaukat Aziz has allowed the Water and Power Development Authority (Wapda) to set up 700-800MW capacity thermal power stations in Punjab to bridge demand and supply gap.

In August last year, when Wapda Chairman Tariq Hameed placed the same proposal before the prime minister, it was turned down on the grounds that no thermal power project would be set up in public sector in future, sources in the Private Power and Infrastructure Board (PPIB) told Business Recorder.

"Power is urgently needed in Gepco and Lesco areas and the utility cannot afford projects on ICB basis if we have to bring additional electricity in these two regions," the sources quoted Wapda chief as saying, in his presentation last year.

The prime minister, however, at a meeting on Thursday, directed the utility to use all possible options to increase power generation, including setting up new power projects and improving in its system to meet the growing energy requirements due to high economic growth achieved during the last few years.

Sources said some of the federal ministers also expressed their serious concern over the prevailing power crisis in a recent cabinet meeting, saying the present situation could go against them in the forthcoming general elections.

The prime minister took several important decisions for power production on fast track basis and directed Petroleum and Natural Resources Minister Aman Ullah Jadoon to make available gas for thermal power projects on priority basis.

The PPIB managing director, in his presentation, said the country would have an additional capacity of 2000 MW by the end of 2008, generated by the Independent Power Producers (IPPs). This will include power produced by capacity expansion from existing IPPs, capacity creation from new IPPs and the power produced by leading business houses, he added.

Sources said Prime Minister Shaukat Aziz was not happy with the working of the PPIB, which was ultimately resulting in delay of projects, adding that President Pervez Musharraf had also expressed annoyance a couple of days earlier at a meeting, saying that nothing has been done practically to meet future power requirements.

The water and power ministry, which is being blamed for power crisis in the country, has been asked to prepare a comprehensive plan to meet future power needs, says a press release issued by the Prime Minister House.

The prime minister directed the Wapda chief to interact with the Alternative Energy Development Board (AEDB) to look into the possibilities of setting up micro-hydel projects.

He said that ensuring security of water, energy and food are among the top priorities of the government. There is a surge in the electricity demand due mainly to the high growth rates and the government is consistently monitoring the power situation in order to maintain the growth momentum and provide uninterrupted electricity supply to domestic and industrial sectors.

The prime minister said over the years the middle class has expanded, the electrification of rural areas has increased and the irrigation and industrial energy demand is at an all-time high necessitating more electricity generation. The government is taking all necessary steps to meet the growing energy demand by creating adequate power generation capacity, he added.

The meeting was attended among others by Petroleum and Natural Resources Minister Amanullah Khan Jadoon, PM's Adviser on finance Dr Salman Shah and senior officials.

 

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ISLAMABAD (July 07 2006): The soaring "twin deficits", ie, current account and fiscal deficit is posing threat to the national economy simultaneously on both internal and external fronts, as the State Bank of Pakistan (SBP) on Thursday reported that the current account deficit during the first 11 months of FY06 reached a dangerous level of $5.227 billion (4.28 percent of GDP).

Sources in the finance ministry told Business Recorder though it was largely driven by the burgeoning trade deficit (which is currently at $11.47 billion), the lavish expenditure on foreign trips and huge import of luxury cars have also been causative factors augmenting the current account deficit to the worrisome level.

Country's current account deficit is the largest, both as a share of economy and in dollar terms.

Sources said that during last 11 months, the national exchequer spent near $1.5 billion on the import of vehicles, more than $1 billion on cellular phone sets, and about quarter of a billion dollars on foreign tours of the President, the Prime Minister and the cabinet members.

The current account deficit, excluding official transfers, during the period under review (July-May 2006) grew by more than 210 percent to $5.227 billion as against corresponding period FY05 ($1.683 billion).

It is also important to note that Finance Secretary Tanveer Ali Agha has also once in the Public Account Committee (PAC) meeting some two-month back confessed that current account deficit is expected to touch $7 billion by end this fiscal and to keep it in control, the government would rely on inflow of privatisation proceeds, FDI, remittances and foreign aid.

THE BUDGET DEFICIT: the other growing threat to economy-reached Rs 201.35 billion (2.70 percent of GDP), up by 0.6 percentage point, till the third quarter (July-March) as compared to Rs 131 billion (2.1 percent) in the corresponding period fiscal year 2005. It is also believed to reach 3.4 percent of GDP. That was the reason that the government's borrowing from the domestic sources ie scheduled and central banks is on the rise for budgetary support.

According to economic experts this external imbalance in the shape of "twin deficits" may have a significant impact on the value of the rupee-a matter attracting keen attention around the country. Besides, it would translate into a large increase in Pakistan's net foreign debt position. A large and growing public debt could also eventually put upward pressure on interest rates and crowd out private investment.

One dismaying aspect is that though the government could have easily controlled this extravagance, none bothered about it.

The economic managers kept on saying that Pakistan is enjoying an economic boom and the current account was manageable by borrowing from abroad, remittances, drawing down reserves and inflow of investment.

According to them, inflow of remittances, FDI, portfolio investment, foreign economic assistance and foreign exchange reserves are very encouraging. But, how long can trade deficit continue on that trajectory without disrupting the economy? And how much longer, can Pakistan continue to spend more than it earns and support the growth? And are the inflows sustainable in the long run?

The most depressing thing was that foreign trips remained almost fruitless as no improvement was seen or mentioned about enhancement of exports (for which, the government would miss the export target of $17 billion by huge margin) or increase in investment, sources said.

 

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ISLAMABAD (July 07 2006): Affairs Division (EAD), Ministry of Economic Affairs and Statistics, Government of Pakistan has approved and signed "Area Development Programme Balochistan, Phase II", which is a joint initiative of United Nations Development Programme (UNDP) and Government of Balochistan.

On behalf of UNDP Pakistan, Haoliang Xu, Country Director, signed the project document. Recognising the tremendous success achieved in the first phase, which benefited 130,000 people in 9 districts of Balochistan, UNDP and the government felt it beneficial to extend and expand this project as a second phase.

Through this initiative, UNDP in collaboration with the Government of Balochistan and World Food Programme (WFP) aims to target poverty alleviation through a variety of activities. Focus areas include community mobilisation and capacity building, local capital generation, improvements in agricultural and livestock productivity, creating income generation activities and improving access to markets and services. In addition, facilitation for access to social sector services will be provided and women's role in development will be strengthened.

Haoliang Xu, Country Director UNDP, was encouraged by the first phase of the project and said that "the success of Phase I is a great achievement of the government and UNDP. We are confident that in the second phase we will attain greater triumph and help even more lives break the chains of poverty."

Phase I of this project succeeded in development of 492 Community Organisations with memberships adding up to 8,369 individuals, covering 12,701 households. Furthermore, these communities saved Rs 3.58 million, constructing 26 drinking and recharge water ponds and rehabilitated 26 "Karazes".

Realising the problems of water shortages in the area, 10 diversion dams and valley dikes of 1.12 million cubic feet were also set up to harvest rainwater. Hence, a total of 1,744 acres of rangeland was rehabilitated. This project also focused on building capacity, training 8,726 people in various skills including natural resource management, livestock production and other income generation activities.

Phase II of the project will provide similar support to a larger community in the area. It will have a life of 4 years with a total budget amounting to US $14,329,800. Owing to the success of the previous phase, the Government of Balochistan has committed US $4.27 million, along with funding by UNDP of US $2.6 million, WFP of US $700,000 and the communities' share (cash / kind) of US $1.0 Million. The financing gap of US $5,929,800 will be mobilised from other donors.

 

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FAISALABAD (July 07 2006): Groundbrea-king ceremony of the M-3 Industrial City will be held in September 2006, said Mian Muhammad Latif, Chairman, Faisalabad Industrial Estate Development and Management Company (FIEDMC.

Talking to newsmen here on Thursday, he said the progressive vision of President Musharraf and Chief Minister Punjab has helped to turn Faisalabad into a 'land of opportunities' by launching ambitious projects like Value Addition City (VAC) and M-3 Industrial City.

He said the Punjab government had established FIEDMC with the induction of private sector to plan, implement and manage projects and to gear up the process of industrialisation in the wake of World Trade Order (WTO).

There are 16 private sector directors on the FIEDMC board, while five would represent the provincial and district governments, he said, adding that the main power would remain with the private sector to tailor these projects according to the needs of new investors.

He said the first FIEDMC project of VAC was almost completed. It has been developed over 181 acres of land near the industrial belt of Khurrianwala, with modern concept of linear buildings and all infrastructural facilities to meet WTO requirements.

The M-3 Industrial City to be developed over 4371 acres along Motorway from Sahianwala up to Millat Road, will also have water treatment plants and state of the art facilities to fulfil the environmental and social compliance of WTO.

The industrial city will accommodate new industries and will encourage the shifting of existing industrial units operating in congested commercial and residential areas of Faisalabad.

Mian Muhammad Latif said that two-road construction contracts involving Rs1.1 billion had already been awarded to two firms, one of which had started the groundwork while the other would commence work within the next couple of weeks.

These projects will not only gear up the pace of industrialisation in the province, they will also help create a million job opportunities for unemployed youth, he observed.

 

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ISLAMABAD (July 07 2006): Pakistan would seek international expertise and assistance in bringing railways at par with the international standards, said Minister for Railways, Sheikh Rashid Ahmed while talking to the Italian Ambassador to Pakistan, Roberto Mozotta who called on him here on Thursday.

The minister said Pakistan Railway was keenly interested to avail the modern technology of Europe in terms of locomotives, signalling system and rail track and would like to go into joint ventures with Italy in order to bring improvement in railway network and operation across the country.

The minister told the ambassador that the execution of work on doubling of rail track on Khanewal-Lahore section has been started in collaboration with Frontier Works Organisation (FWO) which will be completed in one year. The completion of the project would bring a revolutionary change in the culture of Pakistan Railways, says a press release.

This will prove not only a catalyst in improving the train timings but also enhance the dependence of trains in terms of communication besides bringing efficiency and strength in the railways", the minister added. Sheikh Rashid congratulated the Italian ambassador over the success to Italian football team for reaching into the final of the Football World Cup and wished for their victory.

 

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ISLAMABAD, July 6: The Privatisation Commission Board on Thursday decided to privatise a number of state sector enterprises including Pakistan State Oil (PSO), National Investment Trust (NIT), machinery of the Lasbela Textile Mills and finalising Global Depository Receipt (GDR) of the Oil and Gas Development Company Limited (OGDCL) by December 31, 2006.

Informed sources told Dawn that the meeting presided over by Minister for Privatisation and Investment Zahid Hamid directed the concerned officials to speed up the low pace of privatisation programme.

The Board members also called for privatising Sui Northern Gas Pipeline Company (SNGPL), Sui Southern Gas Company (SSGC), Pakistan Petroleum Limited (PPL) and the land of the Services International Hotel, Lahore by the second quarter of 2007.

Sources said that the privatisation minister told the meeting that time had come when various transactions which were delayed due to one reason or the other in the past "must be immediately brought forward to a bidding point".

He expressed the hope that all the pending transactions would further restore the confidence of the local and foreign investors.

He also asked the small investors to consider opening CDC accounts and obtain computerised National Identity Cards for participating in the upcoming public offerings of GoP shares in United Bank Limited (UBL), State Life Insurance Company Limited (SLIC) and OGDCL.

He directed the PC to simplify the application forms in this regard with necessary information in Urdu so as to facilitate the small investors and issue instructions to the respective bankers to guide them in completing requisite formalities.

The minister also asked the PC officials to plan a series of roadshows especially in smaller cities, towns and rural areas for creating awareness among the masses to benefit from the planned public offerings. The PC Board reviewed the status and progress of ongoing and upcoming transactions and directed that necessary steps be taken for their expeditious completion in an open fair and transparent manner after completing all prescribed rules and regulations.

 

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KARACHI (updated on: July 08, 2006, 05:27 PST): The Prime Minister Shaukat Aziz said on Friday the banking in Pakistan has been transformed from state-owned sector into a vibrant private sector industry, gaining strength from the positive interplay of economic and political factors, but becoming an engine of growth for the country.

Talking to a delegation of Bankers at the Governor House here, the premier underlined the importance of a strong and well-functioning financial and banking sector for sustained higher economic growth.

Pakistan with its growing markets, strong economy and an emerging middle class offers immense opportunities for business and investment, he said.

Giving an overview of the economy, premier said Pakistan's economy maintained a solid pace of expansion in 2005-06 and achieved 6.6 growth despite an extraordinary surge in oil prices and the losses caused by last year's October 8 earthquake.

The magnitude of growth that Pakistan has achieved during the last four years in a row has positioned Pakistan as one of the fastest growing economies in the Asian region, PM said.

The premier said the exchange rate is steady, inflation is reducing and credit rating and balance of payment situation has improved. There is an appreciable increase of 20 per cent in the country's exports and 22 per cent in revenue collection.

He said Pakistan is fast becoming a destination of choice for foreign Investors and this year the Foreign Direct Investment (FDI) has reached $ 3.5 billion, which is a record. Per capita income has reached $847 and poverty declined from 34.46 in 2000-01 to 23.9 in 2004-05.

He appreciated the role of State Bank of Pakistan (SBP) in the success of reform agenda.

He further said growth trend is particularly positive in the manufacturing and services. The growth of services sector is a sign of maturity of the economic sector.

Further he said micro financing has a great potential in Pakistan. However, more serious players with a passion to help the country are required. The sector also needs more credit, he added.

The Bankers held an in-depth discussion with the prime minister about the situation in the banking sector. They said the reform agenda of the government has led to positive changes and growth in the sector.

They said many international banks are opening new branches in Pakistan and the banks already operating in Pakistan are expanding their operations.

 

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ISLAMABAD (July 08 2006): The Water and Power Development Authority (Wapda) has asked the federal government to make standby arrangements of Rs 2 billion for taking up initial civil work on the (NJHEP), in case no international firm comes forward to execute the project, sources told Business Recorder.

The Authority has extended the deadline for submission of tenders from June 15 to July 15 after some interested parties had sought more time to complete the documents, sources said, adding that the utility was still uncertain that any of the parties would be declared successful.

"Some international firms have submitted tenders to execute the project, but it will be clear after opening of the tenders whether any of the tenderers is capable of taking on the mega hydroelectric project," sources said.

The project was initially approved by Ecnec on December 31, 1989 at a cost of Rs 15.012 billion. The cost was later revised to Rs 84.5 billion with foreign exchange component (FEC) of Rs 46,667.70 million. Local component of the cost was to be met from Wapda's own resources and FEC through foreign aid. The estimate was again revised to Rs 95.36 billion. The gross head of the project is 420 feet and would generate 969 MW electricity through 17 km long tunnel by diverting water of Neelum River to Jhelum River.

Last year, Wapda had invited sealed tenders for starting construction of civil work, along with design supply, mechanical, electrical and hydraulic works, but did not find any potential party.

The Economic Co-ordination Committee (ECC) of the Cabinet had authorised the Finance Division to issue sovereign guarantee for raising supplier's credit, as a special case, to expedite implementation of the project.

CGGC-CMEC consortium of China, which was interested in undertaking the project, had been sidelined for not fulfilling the requirements. However, CWE (NJ), a joint venture, was providing tender security buyer's credit to meet the foreign currency exchange requirement of the project, instead of supplier's credit.

On the recommendations of the Ministry of Water and Power, the ECC changed the financing terms from 'supplier's credit' to 'bidder's credit'.

However, at a later stage, Wapda, Ministry of Water and Power and Nespak rejected the bid documents as per provision of the tender documents. They said that a French firm, Vincy, which had earlier proposed to conduct seismic study of the project site after the October earthquake before starting civil engineering work, was also among the tenderers.

The company was seeking amendments in the bidding documents, especially with reference to 'arbitration clause', but did not apply by the due date. "The project is of sensitive nature for Pakistan, as India is constructing 330MW Kishanganga hydroelectric power project on river Neelum in occupied Kashmir, and any further delay will be considered as a criminal negligence," sources said.

 

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ISLAMABAD (July 08 2006): The government will announce another 5 percent tariff concessions in January 2007 on imports from India and Sri Lanka as non-least developed countries (Non-LDCs), and Bangladesh, Bhutan, Nepal and Maldives being 'least developed countries' (LDCs) under South Asia Free Trade Area (Safta) agreement.

Official sources told Business Recorder on Friday that the existing tariff reduction under Safta notified through SRO 695(I)/2006 would be applicable only for July-December 31, 2006 period.

A new notification would be issued in December 2006, further reducing the customs duty on import of items from both NLDCs and LDCs under Safta to be applicable from January 1, 2007.

Officials said that the rates of customs duty would be zero to 5 percent by the end of this program. For the LDCs, the rate of the tariff would be curtailed 5 percent in the next three years, excluding items specified in the 'sensitive list'.

For the NLDCs, the rate of customs duty would be 0-5 percent in the next seven years. By 2013, the duty structure for NLDCs would be 0-5 percent.

The tariff reduction on trade among Bangladesh, Bhutan, Nepal and Maldives would be completed in two phases: Phase-I (2006-2008), under which existing tariff rates above 20 percent to be reduced to 20 percent within two years, and tariff below 20 percent to be reduced on margin of preference basis of 10 percent per year. Phase-II (2008-2013) requires tariff to be reduced to 0-5 percent within 5 years.

Explaining the applicability of tariff rates notified for India under Safta, officials said that the government had definitely notified reduced tariff rates for Safta applicable from July 1, 2006. But, the concession had to be seen keeping in view the conditions of import policy order by the Ministry of Commerce. The conditionality of import of any item would be decided by the Commerce Ministry.

Secondly, the statutory rate of duty is much higher on the import of these items as specified in Pakistan Customs Tariff (PCT). The tariff rates given in the PCT (2006-2007) are applicable for general imports by any person.

The CBR has notified the concessional rates under the relevant SRO for specific countries. For general import of these items, the rates specified in the PCT would be applicable, officials added.

Sometimes the concessional rates are applicable for a specific sector or industry. In other cases, concession is subject to the fulfilment of certain conditions under the consessional notification.

Therefore, the notification of reduced rates of customs duty on the import of items under the Safta SRO would be allowed following fulfilment of the relevant conditions of their import.

 

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BEIJING (July 08 2006): Pakistan's export to China registered 27 percent growth in the first five months this year, making considerable headway in overall economic interaction between the two countries, according to the Chinese Customs Authorities.

The country's export to China between January and May 2006 was amounted to US $381.25 million. It was $299.7 million in the corresponding period last year. Hence, the increase in Pakistan's exports to China in a period of five months was about $82 million.

The sources told APP here on Friday that there was a considerable jump in the export items like cotton yarn, cotton fabric, leather and seafood. The Early Harvest Programme (EHP) signed by the two countries last year will also gradually contribute to this upward trend, said Commercial Counsellor in Pakistan Embassy Shahid Mahmood.

The EHP is a mini-fast track and a prelude to the under-negotiation Free Trade Agreement, expected to be signed by the end of this year. Both Pakistan and China have increased market access for each other on items of significant commercial interests from January this year. It has provided duty free access to a large number of import-export products. Apart from this, a number of products are exportable by both counties at Margin of Preference in relation to MFN duty rate. In this way they enjoy concessionary duty rate in comparison to exports of same products from other countries.

When asked to comment on the future prospects of Pakistan's trade with China, Shahid Mahmood said, we are confident that the strong growth that we had in our exports to China last year would continue in the coming months.

Pakistan's export to China is likely to cross the $1 billion mark by the end of this year. The Chinese customs authorities had reported $832 million Pakistan's exports to China during the year 2005.

According to the sources, there is a great potential for enhancing the exports, particularly of valued-added textile products including cotton fabric, home textiles and towels. Chinese growing market also provides wide opportunities to Pakistani traders to enhance their export in non-traditional items like sports and engineering goods, handicrafts, marble, onyx, jewellery and agro-based products.

The trade volume will get a quantum jump in the coming months, when the list of export's items to China will also include sports goods, surgical instruments, rice, mango and some other agro-based products.

An official of the Chinese commerce ministry suggested that maximum number of Pakistani businessmen should visit China to explore new openings in the trade sector. Major exporters need to set up here their representative offices to introduce their products and find prospective buyers, he added.

The Chinese companies, he added enjoy official support at the government level to enhance economic interaction with their Pakistani counterparts.

"We welcome the Pakistani side to display their products at the annual trade fairs, used to take place in Chinese major cities," he added.

 

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LAHORE (July 08 2006): Provincial Minister for Mines and Minerals Muhammad Sibtain Khan has said that 101.92 million tonnes salt reserves have been discovered in two different places of Punjab and this salt is very suitable for domestic as well as commercial use.

While presiding over a meeting of Punjab Mineral Development Corporation (PUNJMIN) here on Friday, the minister said that estimated reserves of salt had been determined as 31.67 million tonnes at Mian Matha, Khushab and 70.25 million tonnes at Marmandi and Mianwali.

He said the scheme for exploration of salt reserves at Marmandi, Mianwali had been completed and production started and more than two thousand new jobs had been created.

He said that the exploration and research work on Mian Mitha, Khushab had been completed. He said that the quality of the salt was very good and it was very useful both as domestic and commercial.

The Minister was briefed in detail about the projects.

 

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KARACHI (July 08 2006): Al-Ghurair Giga Pakistan will invest more than 10 million dollars in various housing and commercial projects including supermarket chain and a five-star hotel in Pakistan in near future.

This was stated by the vice-chairman of the group, Haji Muhammad Rafiq Giga while talking to newsmen after the inauguration of international property conference IPEC 2006 at Karachi Expo Centre here on Friday.

He said that work on a large residential project in Islamabad has started while the work on supermarket will begin in September this year. Another mega housing project will be announced for Karachi in-next couple of months.

Rafiq Giga said that several memorandum of understanding (MoUs) have been signed with local partners for the start of housing schemes in various cities of Pakistan.

He said that Al-Ghurair Giga Pakistan, a joint venture between UAE and Pakistan, would start a supermarket chain in Pakistan. First outlet will be launched in Islamabad followed by other outlets in Karachi and other major cities of Pakistan.

 

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KARACHI, July 7: Exports of two major items -- grey cloth and bedwear -- are expected to cross $2 billion mark each during the fiscal year 2005-06 after achieving a record export growth during the first 11 months of the fiscal.

It will be the first time in the history of the country that export earnings from these commodities will be exceeding $2 billion each.

Another encouraging development is a surge in export of rice which has also joined the ‘one-billion-dollar club’. Three other commodities -– cotton yarn, knitwear and garments -- are already in the club.

Bedwear exports made a leap jump of over $600 million in a single year, touching $2 billion in FY06, while grey cloth, which is a semi-finished product and by far lesser in value-addition, is also close to $2-billion exports.

According to official statistics, grey cloth exports during July-May FY06 stood at $1.943, only $57 million away from the $2-billion mark. Its export in 2004-05 touched $1.994 billion.

Bedwear exports, which stood at $1.408 billion in the fiscal year 2004-05, scrambled to $1.827 billion during July-May FY06, only $173 million short of the $2-billion mark, to be filled by exports in June 2006. It is a fabulous growth in exports of bedwear because no other items have touched the $600-million mark in a single year.

Rice exports, which stood at $933 million during the fiscal year 2004-05, just crossed the $1-billion mark and will add another couple of millions in June 2006 export figures.

Giving brief details about the bedwear industry and its exports, Pakistan Bedwear Exporters Association (PBEA) Chairman Shabir Ahmed said till late 1980s Pakistan was only exporting white bed-sheet to Europe as their domestic industry was producing printed and higher quality bedlinen. He said in the 1990s, the export growth remained slow despite the fact that the European market started importing printed and higher quality bedlinen from Pakistan.

“It was exporters’ effort and determination which helped the bedwear industry grow and establish its products in the western world, as manufacturers kept upgrading and expanding their capacity,” he maintained.

He said bedwear exports surged after the European Union gave a duty-free excess to Pakistani products and increased textile quota by 25 per cent in 2001-02. However, thereafter some problems cropped up, as the EU imposed punitive duty of 13.1 per cent on imports of bedlinen from Pakistan, just a year prior to start of the quota-free regime on January 1, 2005.

After a lot of negotiations, Mr Shabir said, the EU announced a partial review of the duty, as Pakistan argued that investigations carried out by the European Commission were not completed. The EC gradually reduced the duty from 13.1 per cent on three disclosures made and finally it was put at 4.8 per cent, which means that Pakistani bedlinen exporters will be paying around 2.3 per cent after deducting 2.5 per cent concession under the GSP.

He said further that even on entering the quota-free regime with punitive duty of 13.1 per cent, Pakistani bedwear exporters had somehow managed to retain their market share. “Had there been a level-playing field, bedwear exporters would have performed even better.”