Pakistan Economy - News & Updates - Archive

[Neo]

RAWALPINDI, July 10: Pakistan is likely to become the world’s fourth most populous country in the year 2050 having a population of 305 million, with the current population growth rate of 2.1 per cent per annum, reveals the World Population Chart issued by the United Nations Population Division.

The country is already the sixth most populous country in the world with a population of 158 million, and the high annual population growth remains a cause of concern for government and its planners, as Pakistan joins the international community to commemorate World Population Day on July 11.

The Population Policy of Pakistan aims at achieving population stabilisation by 2020 through completion of the demographic transition including reductions in fertility and mortality rates.

Government officials have identified population as the single most pressing issue in the country’s development. Pakistan still has an unacceptably high rate of growth compared to other developing countries, it says.

Latest official figures says while mortality has been decreasing and fertility has shown a significant decline over the recent years, the crude death rate (CDR) of Pakistan is estimated at 8.2 (per thousand) in 2005-06. The decline in mortality rate is due to the elimination of epidemic diseases and improvement in medical services, it says. However, despite a considerable decline in the total mortality, infant mortality still remained high at 77 per thousand live births in 2005. The major reasons for this high rate of infant and child mortality are diarrhoea and pneumonia. Maternal mortality ratio ranges from 350-400 per hundred thousand births per year leading to about 17,000 newborn babies being born motherless, the figures reveal.

The maternal health situation is cause of concern. The maternal mortality ratio is estimated to be 500 deaths per 100,000 births. Over 75 per cent of deliveries take place at home and skilled personnel attend only about 20 per cent of them. The development of the first National Maternal Health Policy is under way. At the same time, population and reproductive health issues have been given significant weight in Pakistan’s Poverty Reduction Strategy Paper.

According to the Ministry of Population Welfare, over one- third of Pakistanis are living in poverty. The impact of population growth on poverty is obvious, since poorer families, especially women and marginalised groups bear the burden of a large number of children with much fewer resources further adding to the spiral of poverty and deterioration in the status of women.

 

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ISLAMABAD: Pakistan would be benefited from the experiences of Argentina and Brazil in the fields of livestock and sugarcane production.

This was stated by the Federal Minister for Food, Agriculture and Livestock, Sikandar Hayat Bosan during his meetings with Ambassadors of Argentina and Brazil here Monday. Matters relating to sunflower seed production and Soybean also came under discussion during the meetings.

“Pakistan expects to sign a number of MoUs with Argentina and Brazil especially in the fields of livestock development, sugarcane processing particularly Ethanol production, cooperative development for small farmers and Soybean production, during my forthcoming visit to these countries,” said the minister.

A delegation of industrialists and farmers is also expected to accompany the minister during the visit. The visit will open up channels of communications between the governments and private sectors for better interaction and cooperation for future investment and technical exchanges, hoped the minister.

This visit is being organised on the request of private sector especially people belonging to sugar industry. In order to streamline the visit, the food minister discussed with the ambassadors of Argentina and Brazil the detail of his visit programme.

 

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KARACHI: Emaar Properties, the leading real estate group, has been a key driver of Dubai’s fast-paced economic growth. It has redefined urban developments in the Middle East and Southern Asia by bringing in world-class standards, while encouraging inward investment and acting as a catalyst for Dubai’s property boom, says a company press release.

A Public Joint Stock Company listed on the Dubai Financial Market and part of the prestigious Dow Jones Arabia Titans Index, Emaar has experienced tremendous growth since its inception in 1997.

Emaar’s net profits for the year ending 31 December, 2005 climbed 180 per cent, to a record $1.288 billion. In December 2005 Emaar was awarded the Euromoney Gulf Real Estate Award for Best Overall Developer in the UAE as well as Best Residential Developer in the UAE.

The awards, voted for by industry peers, took into account factors such as most consistent providers of high quality, profitable real estate projects and innovation as well as individual developments, both recently completed and those at the planning stage.

Emaar has several real estate projects in its primary market of Dubai at various stages of completion. These include Dubai Marina - one of the world’s largest master-planned waterfront developments, Arabian Ranches ñ a premium desert paradise spread over thousands of acres and Emirates Living - a collection of neighbouring Emaar properties that includes Emirates Hills, The Lakes, The Meadows, The Springs, The Greens and The Views and provide quality homes in beautiful settings with tranquil, scenic landscapes as well as a community lifestyle.

In 2004 an exciting chapter in the history of Emaar and Dubai began with construction of the 500-acre Burj Dubai Downtown development -- Emaar’s most ambitious UAE project to date and one that will create a new vibrant downtown for Dubai. The development centres around the Burj Dubai, slated to become the world’s tallest tower when completed in 2008.

Major international projects include: Cairo Heights and Smart Village, both in Egypt; Boulder Hills, a world-class leisure and residential community in Hyderabad, India; multiple resort projects in Morocco, including Amelkis II & III and Bahia Bay, luxury residential golfing communities; Eighth Gate project in Damascus, the city’s first master planned community; and Lakeside in Istanbul, a landmark development for Turkey’s cultural and commercial hub. In Saudi Arabia, Emaar is embarking on the creation of King Abdullah Economic City, a mixed use development covering 55 million square metres of green-field land with a 35 km shoreline close to the industrial city of Rabegh as well as Jeddah Hills, a 2,286 hectare residential community offering spectacular views over the surrounding landscape.

Emaar has also made rapid strides internationally with the acquisition of America’s “best builders” John Laing Homes for $1 billion, a strategic move that has firmly perched Emaar in the international spotlight. The partnership with John Laing Homes is a reiteration of Emaar’s strategy of expanding its business on a global basis beyond Dubai.

In addition, Emaar has teamed up with Giorgio Armani SpA to build and manage 10 Armani hotels and resorts across the world; an Armani hotel will feature in Emaar’s flagship Burj Dubai tower and other locations will include Milan, London, Shanghai, New York and Tokyo. The joint venture will offer 160 guest rooms and suites, a variety of restaurants and a spa covering more than 40,000 square metres and is the flagship for a global collection of Armani designer hotels and resorts.

While continuing to actively pursue expansion in its core business of innovative, high quality real estate development, Emaar has diversified into related business lines to further build value for its 59,000 shareholders, which includes the Government of Dubai.

Recently the award winning property developer announced plans to aggressively expand into the retail sector with investments of over $4 billion to develop approximately 100 malls in the mega emerging markets of the Middle East, North Africa (MENA) and the subcontinent.

In March 2006 Emaar announced its plans to enter the healthcare sector in the MENA and South Asia markets. Emaar’s plan involves the construction of hospitals, clinics and medical centres and investing in the provision of world-class healthcare services. With a total investment outlay of around $5 billion over the next decade, Emaar’s plan is to develop and manage around 100 hospitals each with 200 bed capacities and super medical specialities added in key centres.

In just eight years, Emaar has dominated the UAE property market and created new architectural benchmarks for global property developers while providing high quality homes for a booming population. With its reputation for experience and commitment, and a passion for improving people’s lives, Emaar sees a vision of the future, with an investment in today.

 

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Tuesday July 11, 2006

ISLAMABAD: Pakistan has initiated negotiations for signing an agreement with France for civil nuclear technology due to its growing energy needs.
Addressing weekly press briefing on Monday, spokesperson of foreign office said due to growing economy of Pakistan the country needs more energy therefore we have started talks with France for obtaining civil nuclear technology.

She said talks on civil nuclear technology agreement with France are in progress because France is the major country building Nuclear Power Plants and we have already informed Washington about this.

When asked about the tragic incident of PIA fokker crash in Multan, she said I have no knowledge of casualty of a foreigner in the incident. Forty-five passengers on board PK-688 enroute from Multan to Lahore died in the crash near Multan.

Citing deal of F-16 fighter jets with US, she made it clear that the technology of the F-16 will not be transferred to any other country. The matter is in the hand of US Congress and American administration has assured us that the deal will be finalized.

US opposition has not opposed the sale of F-16s to Pakistan and we are hopeful US congress will finalize the deal within a month.

When asked about the price of F-16, the spokesperson said she had no idea about it.

Commenting on the upcoming meeting between the foreign ministers of Pakistan and India, she said Pakistan has not extended any agenda to India neither she has any knowledge about Indian Prime Minister Manmohan Singh’s visit to Pakistan.

Citing concern over presence of Afghan refugees in Pakistan, she said Pakistan wants peaceful repatriation of Afghan refugees. She said Pakistan wants peace in Afghanistan because it is in the best interest of the region.

Referring to election in Azad Jammu and Kashmir, she said there has been no interference from Islamabad in the polls. The election in AJK are held as per constitution of Azad Kashmir and if someone has some objection over it then they should talk about it with AJK government.

Commenting on the visit of Foreign Minister Khurshid Mahmood Kasuri, she said foreign minister would hold talks with US Secretary of State Condoleeza Rice on several issues pertaining from bilateral, regional and international importance. Afghanistan situation will be focal point of their talks.

On a query, the spokesperson said Pakistan condemns the Israeli attacks on innocent people of Ghaza because Israeli atrocities have augmented the miseries of the Palestinian people and international community must look into this humanitarian crisis.

Responding to another question, she said the electoral process of UN Secretary General will begin from July 15 but so far nobody has come forward to contest the seat and Pakistan has not decided about its candidate.

Commenting on Pakistan-Iraq relations, she said a ministerial delegation under Minister for Religious Affairs Ijaz ul Haq will visit Iraq to discuss promotion of relations with Iraqi government including the affairs of Holy Places with the Baghdad.

 

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Tuesday July 11, 2006

ISLAMABAD: The government of Pakistan Monday signed an agreement with the World Bank amounting to US$ 22 million for financing the project of Balochistan Education Support Program in the province of Balochistan in Economic Affairs Division.
A statement issued by the Economic Affairs Division stated that the agreement was signed by Khalid Saeed, Secretary Economic Affairs Division on behalf of the government of Pakistan and Qayum Nazar Changezi, Additional Chief Secretary, government of Balochistan on behalf of the government of Balochistan while John W Wall, Country Director, World Bank signed the agreements on behalf of World Bank at Economic Affairs Division. The terms and conditions for the Credit will remain as per the World Bank standard i.e maturity period of the credit is 35 years having a grace period of 10 years. Government of Pakistan has to pay service charges @ 0.75 % and commitment charges @ 0.5 % per annum.

The objectives of the proposed Balochistan Education Support Program (BESP) are to promote public-private and community partnerships to improve access to quality primary education, in particular for girls. The project design envisages Balochistan Education Foundation as an apex body working with Implementing Partners (Ips) to implement the project activities. Project components consists of (a) Establishment of Community Schools in Rural Areas (US$ 13.9 million), (b) Support to Private Schools (US$ 2.1 million); and (c) Capacity Building of BEF and Ips, Parent Education and Teachers (US$ 4.2 million).

The project will support education service delivery models through partnerships with non government and low-cost private sector providers. It is different from traditional investment projects as GoB will provide the proceeds of the Credit to the Balochistan Education Foundation (BEF), a semi-autonomous apex financing body with the mandate of supporting public-private and community partnerships in education to improve service delivery and to improve access to quality education, in particular for girls.

 

[Owais]

Wapda given Rs 29 billion more under PSDP

ISLAMABAD (July 12 2006): In a bid to help thwart ongoing power crisis, the Planning Commission has made available Rs 29 billion to the Water and Power Development Authority (Wapda) under the Public Sector Development Programme (PSDP) for upgradation of its system, besides establishing a 500mw thermal power project in Punjab on fast track basis.

These financial resources will be made available to Wapda in addition to its share in the PSDP for 2006-07. Sources said the commission has ensured all-out financial support to Wapda to help it revamp existing power production and distribution system, besides establishing more power plants to cater to ever-increasing energy needs in future.

Setting up a 500mw thermal power project in Punjab is part of Wapda's long-term policy. The project will cost Rs 18 billion and would be completed in June 2008.

Planning commission deputy chairman Dr Akram Shaikh met Wapda chairman Tariq Hameed in Lahore on Monday and informed him about the availability of additional financial resources.

Sources said the Wapda chairman gave a detail presentation to the planning commission deputy chairman, covering total power production capacity of Wapda and consumption in 2005-06 and future demand.

According to the presentation, Wapda's power consumption showed 11 percent increase in 2005-06 against only 6 percent in 2004-05. However, parity in power consumption and industrial growth showed discouraging trends in 2005-06.

The presentation indicated domestic and commercial use of power increased by 12 and 18 percent in 2005-06, respectively, whereas, industrial power use declined to 7 percent. A big jump of power use by domestic and commercial sectors is indicative of unproductive use of energy, as its contribution in industrial growth and subsequently in GDP is always very marginal. Sources said Wapda is studying different options to change the equation for optimal use of power for productive purposes.

Sources said Wapda is also undertaking a massive repair and maintenance programme of its existing facilities to enhance its efficiency and plug leakage. It will also install capacitors in Lahore, Gujranwala and Multan regions to enhance capacity of its system. The programme will be extended to other regions in the second phase. The first phase will cost $20 million and it will help the authority get 150mw additional power in a short span of six to nine months.

Sources said Wapda will submit detail programme to the planning commission for upgradation of its system, besides completing new thermal power plant projects on the fast track basis.

 

[Owais]

300,000 tonnes shortfall likely in rice export

KARACHI (July 12 2006): The country's rice exports are likely to suffer a shortfall of over 300,000 tonnes due to the 30 percent expected decline in Sindh's rice production alone for the next crop season starting in September.

The prediction regarding less rain and shortage of irrigation water that accumulates to a 40 percent water shortage is likely to hit the rice crop in Sindh and a decline of 900,000 tonnes in the production is feared as compared to the last year.

These views were expressed by Haji Abdul Majeed, Chairman, Rice Exporters Association of Pakistan (REAP) in his presentation given during the meeting of Federal Export Promotion Board presided over by the Prime Minister Shaukat Aziz on Saturday.

He said that the old seeds of Irri-6 are producing less yield and the growers are facing heavy input cost due to the price hike of fertiliser, pesticides, diesel, electricity and seed cost.

He said that the middle traders are getting the benefit as they squeeze the farmers, millers and traders. The losers are farmers and exporters. Farmers and millers would get a better price if they work through intermediary or middlemen who make money while supplying input and taking away rice at lower rates. Chairman Reap said that the rice export sector is ignored completely and even in the budget for the year 2006-07.

He suggested that a central market should be established urgently where growers and millers bring paddy and white milled rice to Karachi where warehousing is urgently required. He said that the growers and millers could get a better price if they bring their rice to Karachi at a certain place by eliminating the middlemen.

He demanded of the government to allow import of parboiled plants without duty and sales tax. He also demanded for handing over the Rice Research Institute Dokri to the REAP for research work of rice and the provision of place for laboratory.

He also demanded for the provision of 500 acres of land for rice exporters to store rice in addition to warehouse as well as land to farmers and millers. He suggested that warehouses should be controlled/supervised by Zarai Tarqiati Bank as the lender.

He informed the meeting that the Reap has achieved the target of $one billion of rice exports as it has exported over $1.12 billion worth of rice including nearly 900,000 tonnes of basmati for first time in the history.

 

[Owais]

Fate of Chinese cement still undecided

KARACHI (July 12 2006): Despite the elapse of a month, the fate of imported cement is still undecided as the Central Board of Revenue (CBR) has clearly conveyed to the importers that their detained Chinese cement would not be released. However, the importers are hoping that they would manage to convince the CBR over the quality issue of the cement.

The commercial importers are still confident that their imported commodity possesses good quality and was manufactured under the strict international standards. However, the stance of the custom authorities is also very clear that the samples of the cement imported from China do not conform to the specifications prescribed under the national standard PS: 232 of cement as applied in Pakistan, according to Pakistan Standards & Quality Control Authority (PSQCA).

The importers are also waiting for the announced subsidy of Rs 60 per 40 kg bag by the federal government in April last, which they say, has not been cleared despite submission of all the necessary documents.

"The issue of subsidy is in the process and we are hoping to get it shortly, however, we have sold all the stocks of the imported cement and preparing to place some more orders in China," said a leading importer on the condition of anonymity.

However, the public notification issued by the Ministry of Industries, Production and Special Initiatives (MoIP&SI) on April 28, reads, "As per ECC decision in case No ECC-69/4/2006, a freight subsidy of Rs 60 per 50kg bag on imported cement has been allowed in order to improve the supply of cement in the domestic market thereby reducing its price."

It said that the importers could lodge their claims, along with the documents including invoice, copy of contract/LC, bill of entry/GD form, truck/railway receipt, etc.

The notification said that the commercial bank would examine, process, recommend and forward, the claim within three working days of its receipt, to concerned State Bank of Pakistan, BSC Field office, for payment.

"State Bank of Pakistan, BSC Field offices, on the basis of the bank's certification, will debit relevant head of Government Account and will credit the bank's account within three working days of receipt of claim from the bank for onwards disbursement to the concerned importer immediately," it remarked. Sources said that a very few importers are still interested in bringing in the Chinese commodity, but also fear that the custom authorities may detained their cement despite having quarantine and other quality standard certificates.

"We have verbally placed some orders but still meticulously observing the current situation," an importer said, adding that once the detained commodity released, a few importers would make their deals on papers.

"I don't know why the customs authorities had detained the cement which is used by the countries like the United States, Afghanistan, Hong Kong as well as countries in the Far East and Middle East," he added.

According to sources in the Customs, the government is insisting on re-testing the samples. Efforts are being made to hush up the PSQCA's report as one of the importers commands vast influence in the corridors of power and is endeavouring hard to ensure that the consignment of cement, held up at Karachi port, is cleared, they said.

Some traders are of the view that the imported cement was quite expensive when compared to its quality, however, the importers stood firm and dispelled the impression, saying that the 50 kg bag of imported cement was tagged between Rs250-Rs270 per bag.

On the contrary, the private importers have also thrown allegations on the local cement manufacturers, saying that a strong lobby got activated the day when the government had announced to import cement from different countries, aimed to contain the skyrocketing domestic cement prices.

"On one hand, they (local cement manufacturers) do not only enhance their production capacity but also raise their products' prices for no reason," a cement importer regrettably said.

Market sources said the detention of the cement had adversely affected the import process. Because some ten ships which were ready for the departure from Chinese port Long Kou, were given an order to stop and offload as the Pakistani importers immediately cancelled their deals when they were informed that a ship MV Uthai Navy had been detained in Pakistan when reached here.

The commercial importers of cement earlier estimated the local market demand of around 600,000 tonnes and were mentally prepared to book the commodity at the rate of $65-$70 per tonne, however, when the customs detained the second consignment of Chinese cement, they all backed-off.

 

[Owais]

Circular issued for computing income tax on salaried class


ISLAMABAD (July 12 2006): The Central Board of Revenue (CBR) has issued an explanatory circular for computing income tax payable by the salaried class for the 'tax year 2007', and deducting of advance tax from salary for the tax year starting from July 1, 2006.

The Board issued Income Tax Circular 3 of 2006 on Tuesday to explain the taxation on salaried persons including taxation on motor vehicle/accommodation provided by the employer, quoting different examples to explain the levy.

A salaried taxpayer means where salary constitutes more than 50 percent of the total income. All perquisites, allowances or benefits, (excepting those covered under Part-1 of the Second Schedule of the Ordinance) would be included in the salary and rate of tax prescribed in Part-1 of the First Schedule shall be applied for the tax year 2007 on the gross figure. Tax in the case of a salaried taxpayer shall be computed in accordance with sections 12,13 and 14 of Income Tax Ordinance 2001, read with rules 2 to 7 of Income Tax Rules 2002.

According to the Circular, the value of accommodation provided by the employer to the employee shall be taken as the amount which the employer would have paid to the employee in case the accommodation was not provided to him. In other words, for the purpose of calculation of value of the perquisite of housing, the amount of house rent that would have been paid by the employer (if the house was not provided) shall be included in the salary for tax purposes.

However, the value taken for this purpose will not be less than 45 percent of the minimum of the time scale of the basic salary or the basic salary where there is no time scale.

Explaining the basic exemption threshold, the Board has elaborated that the basic exemption for tax year 2006 is Rs 100,000. This has been enhanced to Rs 150,000 for the 'tax year 2007'.

The tax slabs have also been revised through Finance Act, 2006. These slabs shall be applicable for tax year 2007. For withholding purposes, these shall apply to salary paid from July 1, 2006.

According to the revised slabs, where the taxable income does not exceed Rs 150,000, the rate of tax would be zero percent;

-- where the taxable income exceeds Rs 150,000 but does not exceed Rs 200,000, 0.25 percent;

-- where the taxable income exceeds Rs 200,000 but does not exceed;

-- Rs 250,000, 0.50 percent; taxable income exceeds;

-- Rs 250,000 but does not exceed;

-- Rs 300,000, 0.75 percent; taxable income exceeds;

-- Rs 300,000 but does not exceed;

-- Rs 350,000, 1.50 percent; taxable income exceeds;

-- Rs 350,000 but does not exceed;

-- Rs 400,000, 2.50 percent; taxable income exceeds;

-- Rs 400,000 but does not exceed;

-- Rs 500,000, 3.50 percent; taxable income exceeds;

-- Rs 500,000 but does not exceed;

-- Rs 600,000, 4.50 percent; taxable income exceeds;

-- Rs 600,000 but does not exceed;

-- Rs 700,000, 6 percent; taxable income exceeds;

-- Rs 700,000 but does not exceed;

-- Rs 850,000, 7.50 percent; taxable income exceeds;

-- Rs 850,000 but does not exceed;

-- Rs 950,000, 9 percent; taxable income exceeds;

-- Rs 950,000 but does not exceed;

-- Rs 1,050,000, 10 percent; taxable income exceeds;

-- Rs 1050,000 but does not exceed;

-- Rs 1,200,000, 11 percent; taxable income exceeds;

-- Rs 1200,000 but does not exceed;

 

[Owais]

Cont..............

-- Rs 1,500,000, 12.50 percent; taxable income exceeds;

-- Rs 1500,000 but does not exceed;

-- Rs 1700,000, 14 percent; taxable income exceeds;

-- Rs 1700,000 but does not exceed;

-- Rs 2000,000, 15 percent; taxable income exceeds;

-- Rs 2000,000 but does not exceed;

-- Rs 3,150,000, 16 percent; taxable income exceeds;

-- Rs 3,150,000 but does not exceed;

-- Rs 3,700,000, 17.50 percent; taxable income exceeds;

-- Rs 3,700,000 but does not exceed;

-- Rs 4,450,000, 18.50 percent; taxable income exceeds;

-- Rs 4,450,000 but does not exceed;

-- Rs 8,400,000, 19 percent and where the taxable income exceeds;

-- Rs 8,400,000, the rate of tax would be 20 percent.

For the taxation of motor vehicle provided by the employer, the addition on account of motor vehicle provided by the employer to the employee shall be calculated in the following manner:

Where motor vehicle is used partly for personal and partly for business purposes: In case the motor vehicle provided by the employer is used partly for personal and partly for business purposes, the amount to be included in the salary on this account shall be 5 percent of cost to the employer for acquiring the motor vehicle or the fair market value of the motor vehicle at the commencement of the lease (if the motor vehicle is taken on lease by the employer).

Where motor vehicle is provided exclusively for personal or private use: In case motor vehicle provided by the employer is used exclusively for personal or private use, addition in income will be made as under: Where motor vehicle is owned by the employer, 10 percent of cost to the employer for acquiring the motor vehicle or where the motor vehicle is taken on lease by the employer, 10 percent of fair market value of the motor vehicle at the commencement of the lease.

The circular has clarified that any amount received as flying allowance by the pilots, flight engineers and navigators of Pakistan armed forces, Pakistani airline or Civil Aviation Authority (CAA) and Junior Commissioned Officers or other ranks of the armed forces shall be taxed at the rate of 2.5 percent as a separate block of income.

The circular has also issued procedure for the adjustment of tax liability of salaried taxpayers by employers being withholding agents.

In accordance with the guidance embodied in Circular No 18 of 2004 every employer, while deducting income tax payable on the income chargeable under the head 'Salary' of its employees, is allowed to make such adjustments, as may be necessary, for any excess deduction or deficiency arising out of any previous deduction or failure to make deduction during the 'tax year'.

A withholding agent is allowed to make adjustments on production of the documentary evidence by an employee regarding income tax withheld along with motor vehicle tax in respect of motor vehicle registered in employee's own name and telephone bill as subscriber of telephone.

The Circular added that a full-time teacher or a researcher, employed in a non-profit education or research institution recognised by Higher Education Commission (HEC), a board of education or a university was entitled to a benefit, under the Ordinance 2001 and his tax liability stood reduced by an amount equal to 75 percent of tax payable on his income from salary.

This concession has now been extended to full-time teachers and researchers employed in government training and research institutions also, the Circular added.

Salary Circular 2006

 

[Owais]

Forensic report on KSE crash in three months: Shaukat


ISLAMABAD (July 12 2006): Prime Minister Shaukat Aziz on Tuesday said that forensic accountants were investigating the March 2005 crash of Karachi Stock Exchange and would submit a report in three months. "Strict action will be taken against individuals or organisations found involved," Aziz said in an interview to a private television channel.

He said that market corrections were not a strange phenomenon in the stock exchanges as all international markets see ups and downs, since these were globally linked up.

He said the stock exchanges of Turkey fell by 20 percent, Dubai and Kuwait by 30 percent and India by 40 percent recently. The Prime Minister said Justice Saleem Akhtar had been appointed to head the Task Force to investigate the KSE's last year's crash.

He said that on his directives the report, submitted to the Securities and Exchange Commission of Pakistan (SECP), was published on the internet the same day on which it was released, and it did not mention any names.

"It is not justice to blame any person without any proof as the report does not name anyone and as soon as the forensic accountants complete their report, legal action will be taken against those found responsible," he said, and added "Let the facts speak for themselves."

When asked whether he had any investments in KSE, the Prime Minister said "I, as a matter of personal policy, do not invest in the country I work; this is my principle, and I have worked very hard and all my assets are known."

When asked why he did not invest in Pakistan, he said, "Had I done so, you would have said the Prime Minister was running his own business." He said, "I have no factories, no shares; everything I have has already been declared."

About the rumours that strong cartels were behind such scams, the Prime Minister said: "No one is above the law...if anyone violates, government will not make any distinction and they will face the music."

He said the government was pursuing the policy of de-regulation. However, he made it clear that it does not mean abdication. "The government will continue to make the policies; the independent regulator will monitor. and the private sector will do the business," he added.

About Supreme Court's decision on the sale of Pakistan Steel Mills, the Prime Minister said the government fully respects the decision and was waiting f or the detailed judgement. "We will only take a decision that is in national interest," he added.

He said the government was already working on the formation of the Council for Common Interests (CCI) and after Court's short order it was announced last week.

"The privatisation process will continue, under the guidance of the Supreme Court transparently," the Prime Minister said. He made it clear that the objective of privatisation was not to sell the industry, but to improve the working to bring about necessary improvement.

He cited the example of award of two cellular licences of US $290 million each through open bidding that was shown live on television. About the sugar crisis in the country, he said the high prices were linked to the increase in international market and dismissed the 'conspiracy theories' in this regard.

"It is basically a matter of demand and supply, we acquired more sugar, subsidised it and have been able to stabilise the prices." He said there were enough stocks of sugar in the country and were being sold through a network of 1000 Utility Stores and franchised stores.

He said the National Accountability Bureau investigates only in cases when some personal interests are involved, but this matter relates to demand and supply

 

[Owais]

Company formed to channelise FDI: Qatari adviser meets Prime Minister

ISLAMABAD (July 12 2006): A new investment entity "Qatar Diar Pakistan Company" has been formed to channelise foreign direct investment to Pakistan, especially in energy, telecommunication, development of IT cities, mega real-estate development projects, construction of five-star hotels and medium to high quality housing schemes.

This was stated by Qatari adviser on investment Nasir Al Ausari during his meeting with Prime Minister Shaukat Aziz at the Prime Minister house here, on Tuesday.

Appreciating formation of this investment company, the Prime Minister invited Qatar to participate in Pakistan's privatisation programme, infrastructure development, construction of Islamabad airport and deep-water terminal at Karachi Port Trust.

He also invited Qatari investors to invest in sectors like cement manufacturing, life insurance, Islamic banking and livestock & dairy development.

He said Pakistan greatly values its relations with Qatar, which are based on common faith, values and a shared perception on international issues and are growing with the passage of time.

The Prime Minister said Pakistan is an ideal place for foreign investors due to its consistent growth rate ranging between 6-8 percent, expansion in middle-class and significant rise in per capita income.

"We offer a level playing field to both local and foreign investors and have introduced a number of reforms allowing foreign investors to transparently invest in Pakistan and repatriate their capital and profit without any restriction," he said. Ausari informed the Prime Minister that as a result of transparent and stable economic policies coupled with consistent growth in the economy, Qatar looks toward Pakistan as a destination for its investment.

He said Qatar is also interested in establishing power plants in Pakistan running on gas imported from Qatar.

He said Qatar would soon send a high-powered team to Islamabad to evaluate potential areas of investment in Pakistan.

He also showed interest in establishing an airline service within Pakistan.

In the backdrop of Qatar's deputy prime minister's recent meeting with President Musharraf and Prime Minister Shaukat Aziz, he said close links between the two countries would lead to Qatar's increased investment in Pakistan.

The meeting was attended by privatisation minister Zahid Hamid and senior government officials.

 

[Owais]

Products quality: government to set up Asian Institute of Standards

ISLAMABAD (July 12 2006): The government has decided to establish Asian Institute of Standards (AIS) to maintain quality of products as per specified standard set by the regional countries and meet broader needs of the society, including consumers, sources in the science and technology ministry told Business Recorder here on Tuesday.

They said the ministry would initiate negotiations in this regard with the member countries of the Asia Co-operation Dialogue (ACD) after the approval of the federal cabinet, which is scheduled to meet on Wednesday (today) with Prime Minister Shaukat Aziz in the chair.

The fourth meeting of ACD countries held two months ago at Islamabad to discuss the vistas of co-operation in the field of standardisation and quality assurance among the members decided that ACD countries would increase efforts for the harmonisation of standards amongst the members of the organisation with a view to establishing AIS for development, manufacturing and supply of products and services more efficiently, safer and cleaner, the sources added.

The proposed AIS will act as an organisation in which a consensus could be developed on solutions that meet both the requirements of regional governments' local standards, businesses and boarder needs of the society consumers.

Sources said the science and technology ministry has prepared a Mutual Recognition Agreement (MRA) of co-operation amongst the member countries in the field of standardisation of quality.

They also said the ministry has obtained concurrence of foreign affairs and law ministries before the submission of the proposal to the federal cabinet.

"As the cabinet clears the proposal, the ministry will start negotiations with the ACD member countries on MRA and final agreement," the sources said, adding that after developing consensus the mutually prepared pact would be submitted to the cabinet again.

After the establishment of AIS under the umbrella of Pakistan Standard and Quality Control Authority (PSQCA), the quality of products would be strictly monitored, the sources said.

 

[Owais]

Mango export may decline by 20 percent

KARACHI (July 12 2006): Pakistani mango export target set for the current season is in jeopardy as the country is consistently missing export orders due to a shortage of the crop's arrival from upcountry, sources said. The fruit, due to the deterioration of the crop this season, is likely to lose around 20 percent of its global export market.

The mango exporters of the country might not achieve last year's export figure of Rs 72 million and a shortfall of Rs 14 million is predicted in the export turnover of the fruit as compared to the previous year.

The total mango production in the year 2005 was 1674 thousand tonnes, while the production for the current year is estimated at 1350 thousand tonnes, said Mohammad Iqbal, Chief Operating Officer, Pakistan Horticulture Development and Export Board (PHDEB).

He said that the persistent cold wave at flowering time in Punjab damaged the florescence thus, adversely impacting the fruit production.

The relatively young orchards were more affected and the inclement weather further compounded the problem. "The extent of damage ranged from seven to 14 percent while the average damage is estimated at 20 to 25 percent in Punjab," Iqbal informed.

Alternate bearing is another reason, as last year an extraordinary crop was reaped that had an adverse impact on this year bearing and the resultant production.

A leading mango exporter and Director of Iftikhar Ahmad & Co, Waheed Ahmed said that about 60 percent of the mango crop had been destroyed in the country due to which the exporters were unable to meet the export orders.

At the start of the season the arrival of crop from Punjab and Sindh was not that low and the initial orders were met. Since only one and a half month is remaining, the exporters are faced with the shortage of the commodity and as the law of demand and supply operates, the shortage of supply against the demand has resulted has increased prices," he said.

Last year a bucket of 12-kg mango cost Rs 160 and now the price of same quantity of different varieties has gone up to Rs 320, he said and added that even a couple of days back the bucket's cost was just Rs 250, he added.

There has been a drastic decline in the export shipments in the past few days that have fallen by approximately over 50 percent.

"Now, we are able to ship only one container to the destinations, where we used to dispatch four containers a day just a week ago," Waheed said.

Another leading mango exporter, Mohammad Imtiaz said that severe weather conditions in the Punjab had hit the mango crop while in Sindh, the affect was quite nominal.

Mango is the second major fruit crop in Pakistan, which is grown on an area of around 94 thousand hectares and the production hovers around 1600 thousand tonnes.

Multan, Bhawalpur, Muzaffargarh and Rahim Yar Khan are the main mango producing districts of the Punjab while in Sindh it is mainly grown in Mirpurkhas, Hyderabad and Thatta districts.

 

[Owais]

'Double pay' lower staff names not yet declared by CBR

ISLAMABAD (July 12 2006): The Human Resource Management (HRM) Wing of CBR, even after passage of two months has not notified the names of CBR employees (below Grade 17), who have been selected for specialised positions with double pay package.

Sources said that test and interviews of CBR staff were completed two months back under 'internal job posting' by the HRM Wing. It is a procedure to select the tax officers who are eligible to operate at the reformed units.

In case of tax officials (Grade 17 and above), notifications of double pay package were issued in few days after completion of all legal formalities. But no progress has been seen in case of lower staff. Even the staff working with the reformed wings was not given any extra benefit.

Sources said that the Board has not given double pay package to the staff working in the reformed wings despite approval by Finance Division. The President had sanctioned special allowance equal to 100 percent of the basic pay to officers/officials posted in Large Taxpayers Unit (LTU), Lahore and Medium Taxpayers Units (Rawalpindi, Karachi, Quetta, Peshawar and Faisalabad) and reformed sections of CBR (HQ), Islamabad.

These functions included Human Resource Management (HRM) Wing, CBR (including Sub-office ie Rawalpindi, Peshawar, Lahore and Karachi); Tax Policy and Reform (TP&R) Wing, CBR (including Regional Tax Offices); Information Management System (IMS) Wing, CBR; Fiscal Research and Statistics (FRS) Wing, CBR; Audit Wing, CBR and Facilitation and Taxpayer Education (FATE) Wing, CBR.