Pakistan Economy - News & Updates - Archive

[Neo]

‘Investors’ Protection Bill’ to be tabled in parliament ​

ISLAMABAD: The Islamabad Stock Exchange (ISE) will table a comprehensive ‘Investors’ Protection Bill’ in the newly elected parliament. Aim of the bill is to safeguard the interests of the general public whose savings are dependent on the integrity and fairness of the well-functioning stock markets, said the official statement issued here on Tuesday.

The bill, first ever to be introduced and sponsored by a stock exchange in Pakistan, is aimed at making the local stock markets safe, secure, transparent and cost effective for the investors at large. The ISE believes that the bill, once introduced through the sponsorship of some leading parliamentarians, would attract the bipartisan support of all political parties especially the government coalition parties as the same parties, while in opposition, had been voicing their concerns at the presently insufficient standards of market regulation, oversight and enforcement at the country’s stock exchanges.

Broadly, the bill would require the introduction of new measures so as to bring in enhanced level of protection for the investors, and would place a direct responsibility on the Boards and the management of the stock exchanges to investigate and punish all instances of market abuse/fraud. Some of the most important features of the bill are briefly highlighted hereunder:

The bill would require the establishment of an independent National Investors Protection Trust (NIPT) in the country, which would be funded through the redirection of all proceeds obtained by the SECP on account of its levy presently being charged on the stock exchanges transactions from the exchanges, CDC and NCCPL. Moreover, the exchanges would also be required to redirect and regularly contribute their respective investors’ protection funds to this trust. The NIPT would work on the lines of Securities Investors’ Protection Corporation (SIPC) of the United States, and its objective would be to satisfy the investor’s claims and restore all registered securities and cash funds to the investors lying in their respective accounts in the event of the failure/default/bankruptcy of a brokerage firm.

The NIPT, would however, not be responsible to make good on the losses suffered by the investors on account of their trading in the stock exchanges, but would only be responsible to return the idle securities and cash lying in the respective accounts of the investors at the time of the failure of a brokerage house.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Furniture industry in doldrums due to imports from China ​

* Prices of a bedroom set have increased by 15 to 25% in one year​

KARACHi: Furniture industry of the country is facing a tough situation because of increase in raw material prices and unabated import of China-made furniture in the local market, dealers said.

The prices of locally made furniture have increased by 15 to 25 percent, where as its demand has dropped by 30 percent despite the on-going season of marriages, in which demand of furniture for dowry increases manifold, a survey by Daily Times revealed.

Instead of purchasing full bedroom sets, the families prefer to buy only essential items of furniture for dowry. The prices of almost all raw materials used in furniture making included timber, foam, chipboard, polish material, colour paints and hardware, have increased manifold, having a spiraling effect on the finished products, traders said.

They said the timber production in the country has declined because of unchecked cutting of forests in the country. Where as, they said, the local furniture industry is threatened by imported furniture from China. The traders feared that if this situation continued for long, Pakistan would become the import market of Chinese furniture.

Chairman, Karachi Furniture Dealers Group, Atiq Mir, told Daily Times that about 60 percent raw material, used in furniture making is imported from China. Imported items included chipboard, hardware items, glasses, and MDF board. He said due to shortage of timber in Pakistan, the demand of chipboard has increased. The imported chipboard is widely used in manufacturing of bedroom sets. During the last one year, the price of a sheet of chipboard has increased from Rs 800 to Rs 1,000, he added. Besides wooden furniture, the demand of wrought iron furniture has also increased in the country, said Mir.

The prices of normal wooden bedroom set has increased from Rs 30,000 in the last year to Rs 55,000 to Rs 60,000 this year, he said adding that the price of a bedroom set manufactured from sissoo wood has increased from Rs 80,000 to Rs 150,000. Similarly, the prices of steel furniture have also surged by 60 percent, he added. The price of a steel-made bedroom set furniture was Rs 50,000 last year, which has increased to Rs 60,000. He said the government should pay serious attention on foresting in the country, otherwise 5 million people, associated with this industry would face starvation. aamir ajmeri

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Experts predict minimum wheat crop this year​

ISLAMABAD: Speakers at a seminar on “Assessment of right to food and food security in Pakistan” on Tuesday claimed that wheat production would hit lowest level as compared to the production of last several years.

Higher prices of fertilizer, non availability of water at the time of swing, higher prices of other inputs and not announcing wheat support price before harvesting time were the main factors responsible for expected lower wheat production. The government has planned to procure only 5 million tonnes out of total wheat production target of 24 million tonnes this year. But the government failed even to announce wheat support price for such quantity.

The speakers also claimed that wheat import was not the demand of people and it was only policy of the establishment for earning money. They expressed dissatisfaction that even wheat balance sheet was not available with the government.

Action Aid organised the seminar with the collaboration of SAAG (Sustainable Agriculture Action Group) here on Tuesday at a local hotel. Program Development Expert (UNIDO), Sohail Mohammad Khan, presented his research paper on “Assessment of right to food and food security in Pakistan”. He said that the progress in attaining food security was slow and uneven up to the present time at global level. This situation was likely to continue in to the 21st century unless concerted efforts were made to remove the obstacles to food security and promote overall rural development and poverty eradication.

About Pakistan he said, the last two years figures of most food production items support the argument that as a whole Pakistan was moving towards a net food insecure country. He said Pakistan had been importing significant quantities of wheat and pulses to feed the fast growing population of the country for almost four decades. ijaz kakakhel

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Govt urged for value addition in fruit sector​

* For the last many years, fruits and vegetables exports are falling short of target, and compared to other countries of the region

KARACHI: Fruit and vegetable exporters have demanded the new government of Pakistan Peoples Party Parliamentarians (PPPP) to focus special attention on value addition in fruit sector to accomplish desired goal of enhancing country’s export to substantial level.

As claimed by leading fruit exporters, all efforts by successive previous governments to increase quantum of fruit and vegetable exports have so far failed to accomplish desired results mainly due to lack of good agriculture practices leading to poor quality and appearance of exported items.

Consequently for the last many years, fruits and vegetables exports are falling short of target, and compared to other countries of the region, Pakistan is lagging far behind in export targets.

Majority of exporters blamed the dismal export situation owing to lack of official interest towards enhancing country’s export as despite bumper crop of fruits and vegetables during the last several years, their export remain stagnant.

Talking to Daily Times, Abdul Wahid, Chairman All Pakistan Fruit and Vegetable Exporters Association (APFVEA), termed the miserable export situation owing to lack of value addition. “ All efforts by the stake holders of fruit and vegetable exports to convince successive governments about importance of value addition and its significance in enhancing export to several folds compared to the present level has failed to yield any tangible result” he added.

Citing vital aspect of value addition towards upgrading fruit export, Chairman of the APFVEA claimed that Mango, regarded as vital fruit item for export purpose always drawing high demand world over, hardly costs $ 400 per tonne. The same Mango, after the value addition including Mango pulp process, can fetch $1200 to $1600 per tonne in the international markets.

Ironically out of 3 million to 3.5 million tonnes of local mango production in Punjab and Sindh, hardly 1,00,000 to 1,25,000 tonnes are exported while the rest are either wasted or used for domestic consumption. He said subjecting Mango to value addition process can fetch the country billions of dollars annually.

Similarly, he said, out of two to two and half million tonnes of Kinnow, produced only in Punjab province, hardly 1,25,000 tonnes are used for export purpose while majority of the yield is either used locally or due to lack of storage facility, is wasted.

The export price of Kinnow is $600 per tonne in the international market and the same fruit after the value addition process including pulp form can fetch upto $1000 per tonne.

Converting the fruit in pulp form, can help increase export value to several billions of dollars thus pushing country’s export to new heights.

According to him, an overwhelming majority of population prefer using juices and by converting our fruits into pulp form, exporters can take advantage of this growing trend of enhanced juice consumption.

Replying to a question, he said, only a single factory named Kargil, is operating in Sargodha district, where Kinnow is processed and converted into pulp form.

However, it is incapable to handle such large quantity of kinnow arriving during the peak season from all over the district simultaneously.

Consequently due to delay factor, majority of the fruit either perishes or due to extra-ordinary delay, it is sold in the open market at much lower rates causing loss to the growers.

Abdul Wahid, said similar problems are faced by onion, potato and other vegetable growers as due to lack of value addition, these two items are unable to fetch substantial price in the international markets causing financial loss to the growers.

He urged the new government to pay special attention on good agriculture practices and emphasised on value addition process and improved storage facilities.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

US has pumped $12.28bn into Pakistan since 2002​

WASHINGTON: The US extended $7.74 billion in security-related assistance to Pakistan between financial years 2002 and 2008, against $4.53 billion that went towards the country’s economic support.

According to Alan Kronstadt of the Congressional Research Service, the bulk of the military-related assistance went to Coalition Support Funds ($5.56 billion), followed by Foreign Military Financing ($1.57 billion), International Narcotics Control and Law Enforcement, including border security ($267 milliion), Counternarcotics Funds ($131 million), Frontier Corps training and equipment ($75 million), Nonproliferation, Global Training and Equipment ($53 million), non-proliferation, Anti-Terrorism, Demining and Related support ($52 million), and International Military Education and Training ($11 million). As for economy-related assistance, the bulk of it went to the Economic Support Fund ($2.43 billion), followed by Export and Investment Assistance ($1.43 billion).

The Export-Import Bank accounts for about 75 percent of this amount, while the Overseas Private Investment Corporation accounts for the other 25 percent. Of the rest, Development Assistance represented $286 million, followed by Food Aid ($204 million) and Child Survival and Health ($137 million).

Daily Times - Leading News Resource of Pakistan

 

[Neo]

MOL Pakistan signs $119m contract​

ISLAMABAD, March 25: MOL Pakistan, the operator of Tal Block on has signed a $119 million contract with the consortium of PDIL for the development of Manzalai Field Surface Facilities.

Managing Director of MOL Pakistan Janos Feher and CEO of PDIL Muhammad Khawar Khan signed the contract, according to a company announcement here on Tuesday.

Manzalai field is located in Karak and Hangu districts of the NWFP.

The target of the project is to produce 200 MMscfd natural gas and 4,000 BPD condensate as the second stage of the Manzalai Field Development.

Together with the first stage the planned production from the Manzalai Gas field will be 250 MMscd and 4,500 BPD condensate.

The contract also sought to construct a central processing facility comprising of two 150 MMscfd capacity gas processing trains, supporting utilities, residential facilities for operators and four remote gathering stations and 7 wellheads on turnkey (EPCC) basis.

MOL Pakistan is the operator of the block and JV partners include Pakistan Petroleum Ltd, Oil & Gas Development Company, Pakistan Oilfields Limited and Government Holding of Pakistan. PDIL, represents a consortium Presson Descon International (Pvt) Ltd, Descon Engineering Ltd, Enerflex Systems Ltd.

The members of the consortium are assigned for project management, engineering, procurement, process engineering, fabrication and supply of process equipment, fabrication of equipment and site construction.

MOL Pakistan signs $119m contract -DAWN - Business; March 26, 2008

 

[Neo]

S&P maintains negative outlook on Pakistan debt ​

LONDON (March 26 2008): Standard & Poor's maintained its negative outlook on Pakistan on Tuesday despite the appointment of a new prime minister as the country still faced tough decisions over its growing fiscal deficit. The ratings agency said it would keep its B+/Negative/B foreign currency ratings on the country and its local currency BB/Negative/B ratings.

S&P said the newly elected coalition government would ease political tensions in the country following the assassination of former prime minister Benazir Bhutto in late December but warned that Pakistan's ratings could be lowered if the new rulers proved too distracted to deal with growing economic challenges.

"The incoming administration faces the considerable challenge of arresting growing fiscal and external imbalances against deteriorating external conditions, a task Prime Minister Gilani may prove ill-equipped to handle, given an untested and potentially fractious cabinet," S&P said in a statement.

S&P revised the outlook on the sovereign rating on Pakistan to negative from stable after President Musharraf imposed emergency rule on November 3. He lifted the emergency after six weeks.

RISKS: Analysts in Pakistan said the decision to maintain the negative outlook was a realistic reflection of the problems the new government faced. "Some were expecting initially the outlook to be changed back to stable after smooth elections but S&P has rightly pointed out that there are risks on the fiscal and external side," said Mohammed Sohail, director of Equity Broking at JS Global Capital Ltd.

"This shows their focus has moved from politics to Pakistan's economy," he said. Finance Ministry data released this month showed the fiscal deficit for the first half of the July to June fiscal year was 3.6 percent of gross domestic product (GDP), compared with 1.9 percent a year earlier.

Analysts expect the budget deficit this fiscal year 2007/08 to hit 5 percent of GDP or more, overshooting a target of 4 percent. Trade deficit widened to $2.104 billion in February, compared with $1.30 billion in February last year, the Federal Statistics Bureau said.

Consumer price index (CPI), a key indicator of inflation, rose 11.25 percent in February from a year ago, the bureau said. "The positive thing is that they have not downgraded Pakistan and this states generally what we already know about the economic challenges," said Asif Qureshi, head of research at Invisor Securities Ltd. "The new government will have to show a very serious resolve on the economic challenges facing the country," he said.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Major power breakdown hits Islamabad, Lahore ​

LAHORE (March 26 2008): The provincial metropolis and Islamabad were without power on Tuesday following a technical fault at the Gutti 500kv power transmission in Multan paralysing life and industrial activities.

The irritating and repetitive power-cuts have prompted a five-member committee headed by senior Technical and Planning Manager Arshad Raza to submit an inquiry report within 72 hours. Pakistan Electricity Power Supply Company Managing Director Munawar Baseer told a press conference on Tuesday.

The power went off at 0905 hours when the 500kv in Multan's Gatti transmission line tripped after the technical fault, resulting in the tripping of other 500 and 220kv transmission lines and loss of 2600mw generation - apparently 25 percent of the available generation capacity.

Baseer said the inter-tripping system put in place by the National Transmission Distribution Company prevented the system from collapsing and damaging the 500kv and 220kv system equipment, such as transformers and generators.

About the subsequent chain of events, he went on to say the inter-tripping scheme had split the system into two parts - North and South of Multan - and limited the power disruption to only the North. The power system South remained normal, he added. "The Southern Punjab, Sindh and Balochistan continued getting power. The power supply through Karachi Electric Supply Company has also remained unaffected," he said.

He also said the National Power Control Centre in Islamabad acted under the Emergency Response System and restored the power to Islamabad at 0947 hours by interconnecting the Mangla system through 220kv Mangla-Rawat line. The Tarbela Hydel Power Station and Tarbela-Sangjani line were restored. The 220kv and 500kv systems to Lahore, Faisalabad and other areas were partially restored by 1430 hours and fully restored at 1513 hours. He told reporters that the committee would submit a comprehensive report covering the analysis of network operations, protective system in place and anomalies.

"The committee will then present clear recommendations and specific solutions in the network protection and control system to avoid such mishaps in the future," he added. He said his company had set up state-of-art call centres in FESCO, LESCO and IESCO under the company's supervision and also rental powerhouses and rehabilitation of the existing thermal power plants.

He went on, "The company is pursuing a plan in two ways - one from the demand side and the second from the supply management. Targeting of 1800mw for 2008, the company is adding 425mw on a fast-track rental generation, 550mw by adding a new rental plant and 300 more by rehabilitating the current GENCO owned generation plants. PEPCO has targeted 1850mw in 2008 by energy conservation initiatives. As earlier mentioned, PEPCO has achieved its target of 500mw of saving by the energy conservation campaign. Further, a medium-term plan to enhance the generation capacity of 6100mw has also been articulated."

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

US share in foreign investment reaches 56 percent ​

KARACHI (March 26 2008): The United State of America (USA) share in overall foreign investment has reached 56 percent, exceeding the one billion dollar mark in first eight months of current fiscal year 2008. Analysts said that Pakistan is the one of the major strategic partners of USA in its "war on terror" due to which, trade relations between the two countries are improving.

Consequently, there has been a sharp rise of US investment during last few years. Statistics show that after 9/11 and with the initiation of "war on terror" the USA investment in Pakistan is increasing and it is likely to touch all time high level during the current fiscal.

"We have gained some economic benefits against our support to US on its 'war on terror'. However the overall losses are more than the benefits," they opined. USA investment has increased by about 33.4 percent or $368 million to $1.468 billion during the period of July-February of current fiscal year, as compared to $1.10 billion during the corresponding period of last year.

According to SBP statistics, in the first eight months of the current fiscal year, overall foreign investment stood at $2.641 billion, out of which USA share is $1.468 billion, or 56%,as against the about 23 percent ($1.1 billion} during the corresponding period of last fiscal year.

In fiscal year 2001-02, when war against terror was started, USA investment in Pakistan was $324.7 million, and since then, it has risen gradually, and now exceeded the $1 billion dollar mark. USA is also the leading country in sector-wise investment in Pakistan, as it has the highest share in both portfolio and foreign direct investment.

USA investors have put up $458.9 million in portfolio investment, which is highest by any country during the current fiscal. In FDI, USA share is 40 percent, as its entrepreneurs have invested about $1 billion during the period of July-February of current fiscal year.

Analysts pointed out that better returns in Pakistan, yielding about 40 percent return during the last year, have attracted USA investors to the country's stock market.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'Pakistan can increase its share in markets of China and Malaysia' ​

KARACHI (March 26 2008): Pakistan has got best opportunity to increase its share in 791 billion dollars import market of China and 131.13 billion dollars import market of Malaysia by improving its marketing strategy, products quality and presentation said Mujeeb Ahmed Khan, Head of WTO Cell, Trade Development Authority of Pakistan (TDAP).

Addressing a seminar on "Exploring Pakistan's export potential in China and Malaysia in the context of the free trade agreement" organised by Karachi Chamber of Commerce and Industry (KCCI) in collaboration of TDAP on Tuesday, he said that Free Trade Agreement (FTA) between Pakistan and China has become effective from July 1, 2007.

He said that under the agreement 2,581 items which comes under fast track constituting 35.5 percent would be gradually zero-rated within three years, 2,604 items comes under normal track on which tariff would be lowered to 5 percent and then to zero percent within five years.

He said sensitive list comprising of 1,133 items, out of which 604 items equivalent to 15 percent of the total items have been declared highly sensitive by China while 529 items fall under sensitive list track two. These items have been given reduction on the basis of margin of performances by 50 percent and 20 percent respectively. The rest of 15 percent items have been fully protected, as they have not been given any concession.

He said that Pakistan will get zero-rated market access within three years on various industrial sectors including industrial alcohol, cotton fabric, bed linen and other home textile, marbles, leather articles, sports goods, mangoes, citrus fruits and other fruits and vegetables, iron and steel products and engineering goods.

Other products which will be benefited from FTA comprises chemicals, fish, dairy sector, frozen orange juice, plastic products, rubber products, leather products, knitwear, woven garments etc.

He said that tariff reduction modality under the FTA has been developed to achieve the twin objective of gradual regularisation of trade with China while providing adequate tariff protection to the existing industry as well as future investments.

Eliminating or reduction of customs duty on raw materials and intermediate goods will make Pakistan's exports competitive not only in China and Malaysia but also in the global market. The FTA would also help Pakistan to improve its balance of trade with China and Malaysia.

He noted that China import petroleum oils obtained from bituminous mineral worth 47.7 billion dollars and was reported as the 3rd largest importer in the world. Pakistan's export size was estimated at 13.9 million dollars to the world, but nothing to China. However this item has been excluded from the Pak-China FTA.

Referring to Malaysia, he said that this was the first bilateral FTA between two Muslim countries and also first comprehensive FTA incorporating trade in goods, trades in services, investment and economic cooperation.

Exports from Pakistan were being subjected to higher tariff in Malaysia as compared to similar goods exported from Asean member countries. Resultantly, Pakistan was losing market in Malaysia for its core export products. This agreement would provide a level playing field to Pakistani products in Malaysian market.

He said Malaysian imports from Pakistan grew only by 5 million dollars during last five years, depicting insignificant annual growth of 1.58 percent while Malaysian exports to Pakistan increased from 525 million dollars to 842.5 million dollars. Balance of trade is in favour of Malaysia. Palm oil constitute 50 percent of the total exports from Malaysia to Pakistan, he added.

He said sports goods and surgical items have been given duty free market access from January 2008. Malaysia has allowed electric fans imports at 20 percent duty by 2010, at 15 percent duty by 2013 and thereafter it will be further reduced to 10 percent.

Except men and boys knitting shirts, Malaysia has given preferential market access to almost every products which includes top 50 exporting commodities of Pakistan, which is not covered under FTA and clothing sectors will not be zero rated by 2015.

Chairman, Export Sub committee of KCCI Shariq Vohra said that China with 1.4 billion people spread over 31 provinces will be the world's largest economy by 2025 and its GDP will be higher than USA. Pakistan should take advantage of its geopolitical location and do something to penetrate in this market. Welcoming the guests, president KCCI Shamim Ahmed Shamsi express concern over non-existing of comprehensive data on import, export and goods produced in the country. He said in the absence of comprehensive data, no planning could be made in respect of import, exports and production.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Ericsson wins expansion order​

STOCKHOLM (March 26 2008): Telecom equipment maker Ericsson said on Tuesday it had won an order to expand and upgrade the GSM/GPRS network of Pakistani operator Warid Telecom. Ericsson, the world's biggest mobile network maker, said it would supply and install core radio, microwave and optical transmission network equipment. It gave no financial details of the deal.

Business Recorder [Pakistan's First Financial Daily]

 

[opinion786]

Pakistan’s Economic success: Mercy of 9/11 or Macro-Economic Policies?​

Afreen Baig

The 1990’s was a lost decade for Pakistan, mismanagement at its helm and corruption rampant. Formation of failed policies, coupled with sheer incompetence and lack of commitment, kept deteriorating the economy of the fragile Country. Benazir’s era was further characterized by ungoverned manipulation and personal extravagance of her husband Zardari.

By 1999, not only were the $10 billion Foreign Reserves misspent without any accountability, but it also shattered the confidence of our nation. Expatriate Pakistanis kept a cautious outlook of the situation and held their foreign reserves back.

In 1999, Revenue generation of around Rs.308 billion could not meet the growing expenditure requirements; with only an average of Rs.80 billion being spent on Public sector development programs (PSDP) annually, and no visible project to boast about. From this Rs.308 billion around 65% was being utilized for debt servicing. In 1988 Pakistan’s foreign debt was $18 billion, but at the end of 1999 it had accumulated to become $38 billion. A 100% increased burden on the already crippled economy. Public and external debt exceeded 300% of Foreign exchange earnings. Pakistan had become a highly indebted poor country. Poverty levels also increased to become 35% according to economic survey. This glooming situation was not being dispelled.

While the world was progressing, Pakistan’s economy was stagnated. Overall there was a feeling of despondency and uncertainty. It not only lowered the morals of the business community, but also affected adversely the Foreign Direct Investment (FDI). Foreign Investment started diverting to other promising Asian markets, especially that of India for their future prospects.

Nawaz Sharif and People’s Party often lament that during their tenures US and IMF Aid was suspended; and that President Musharraf’s government received huge aid after 9/11 to overcome the economic problems. To set the record correct, USA and IMF aid was suspended only after the Nuclear Atomic blasts of May 1998, but that too was RESUMED later that year in November, a week before Nawaz met President Clinton in USA. Before May 1998, the governments of Nawaz Sharif and Benazir Bhutto well-received worldwide aid and assistance from USA, IMF, OPEC, European countries, ODA & OOF bilateral agreements and World Bank.

The inheritance of the ailing economy that took place after October 1999 was not an easy task for the leadership of President Musharraf. Pakistan needed quick reforms, resource allocation, stabilization of policies and alluring back the Foreign Reserves and Foreign Direct Investment.

A misperception persists within some critics that attribute completely the turning around of Pakistan’s economy to: US aid or 9/11. Therefore, let it be clarified that major economic indicators had improved before 9/11, and the economy had already started showing signs of recovery and revival.

In that SHORT span of 2 years BEFORE 9/11, Pakistan’s revenue increased from Rs.308 billion to become Rs.395 billion. Exports increased from $7.5 billion to become $9.2 billion. Foreign Reserves increased from $1 billion to become $3.25 billion. Debt servicing as a ratio to Revenue decreased from 65% to 57%. Public and external debt as a percentage to Foreign exchange earnings declined from 300% to 250%. Current account deficit decreased from $2.4 billion to become $510 million. And, Pakistan’s large-scale manufacturing grew by 11% in June 2001 against 3.5% in 1998. These facts should set aside the skeptical grumblers.

Therefore, the entire credit of stabilizing Pakistan’s economy goes to the visionary decisions, sustained macro-economic policies and financial reforms of President Musharraf and the Prime Minister Shaukat Aziz. These also highlight their good intentions and ultimate honesty. Their sense of duty towards the country, honesty and the genuine resolve to address the problems does not arise from 9/11. Unlike their predecessors who swept problems under the carpet.

Now countering the other most popular allegation, i.e. US aid enabled the recent economic achievements.

The annual flows Pakistan has received during the last six years amount to approximately $ 1.75 billion from all types of US assistance - military, economic, and reimbursements for logistics support. Of these flows, the aid – military and economic accounts for $ 700 million annually.

This amount is 4.5% of total foreign exchange receipts, 7.2% of total budgetary expenditures, 6.4% of total value of Imports, 4% of total Exports and 5.8% of current account receipts of Pakistan. As a proportion of GDP of Pakistan these gross flows from all sources work out to only 3%. Negligible!

These figures by all means indicate the strength of Pakistan’s booming economy and establish the FACT that Pakistan is no more dependent upon US or foreign aid. Pakistan’s economy has managed to wriggle out of their clutches.

Pakistan’s economy grew at 6.5% to emerge as a $160 billion economy in 2007. Pakistan’s Revenue now stands above Rs.700 billion; as they increased by above 100% in just 7 years. The FBR estimates that there are now around 2.8 million Income Tax payers. A fully functional Tax Management System (TMS) was implemented on International standards with the assistance of World Bank.

Pakistan’s Public sector development program (PSDP) spending increased by above 400% to become Rs.520 billion. This has initiated major infrastructure programs throughout the country, including 7 Motorways and several Highways. Bridges erected and underpasses paved. 18 new Universities are already functioning and 9 Engineering Universities under construction.

Financial reforms enabled Pakistan to emerge as the 3rd best in Banking profitability according to IMF. Pakistan globally ranks 10th most active in perusing pro-business policies. The Infrastructure Industries Index in 2007 recorded a 26.2% growth in Industrial sector of Pakistan, with large-scale manufacturing growing at 11%. The Securities and Exchange Commission of Pakistan (SECP) registered 1,135 companies in first quarter of 2007. The IT industry registered a 50% growth.

Under President Musharraf, the government spent over $ 16.7 billion on poverty alleviation programs, and managed to reduce poverty from 35% in 2000-01 to 24% in 2006-07.

The Foreign Direct Investment that the President and the PM managed to attract back into the country is entirely due to their credibility, professional wisdom and personal interaction with the world. Their visionary plans predispose the world to trust them. FDI increased by $ 5.1 billion, for a year-on-year increase of 45.6%.

We as a nation should acknowledge Pakistan’s accelerating prominence in International relations, give credit open heartedly where something is achieved and criticize positively only to achieve something better. Cynicism and despondency should be avoided. Pakistan’s National interest should be held foremost and without compromise!

 

[opinion786]

Economics in nutshell:

• 9 world class Engineering universities being developed and 18 Public universities already developed.

• Private sector institutions have increased from 36,096 (in 1999) to become 81,103 (in 2006).

• PAK is 3rd best in world Banking profitability.

• PAK IT industry now values around $2 billion, including $1 billion exports and employs around 90,000 professionals.

• About 80,000 direct & 500,000 indirect jobs have been created only by the Telecom sector.

• Industrial Parks are being setup throughout the country for the first time! M3 estate, Sunder industrial estate, Chakri, etc.

• Major Mega projects like the Saindak, Rekodiq, Marble production, Coal production and Mining & Quarrying are being pursued.

• In 2006, GDP growth is 6%. Earlier in 1999 was 3.5%.

• Foreign Reserves from $1 bn to $17 bn.

• KHI stock market: from 700 points to 13,000 points.

• Literacy rate improved by 11%.

• Poverty decreased by 10%.

• He made 4 dams: Mirani, Subakzai, Gomalzam, Khurram Tangi dams.

• 6 Motorways completed or under construction: M1, M3, M8, M9, M10, M11.

• Six major highways under construction.

• GWADAR advance mega Sea port developed under his vision!

• Historic 100% increase in Tax collection of $11 billion.

• Large scale manufacturing is 30 year high, and Construction activity is 17 year high.

• Newly found World class copper- gold deposits in Chagai will fetch $600 million per year.

• A new Oil refinery with UAE will fetch $5 billion & will process 300,000 oil barrels a day.

• CNG sector has attracted over $70 billion investment in last 5 years; and created 30,000 jobs.

• Industrial sector registered 26% growth.

• PAK in 1999 was a $75 billion economy; and now 2006 it's $160 billion economy!

• PAK economy is now the 3rd fastest growing economy after China & India.

And, I have many more.... will post later.....

 

[Neo]

KSE hits new record, rises 76 points ​

Thursday, March 27, 2008

KARACHI: Continuously rising Karachi stock market again closed at a new record level on Wednesday as leading benchmark 100-share index closed just one point short of the resistance level of 15,200.

The KSE 100-share index moved up by 76 points or 0.50 per cent and ended at 15,199, the highest-ever level. The parallel running junior 30-index rose by 143 points or 0.77 per cent and ended at 18,588 points. Amicable resolution of some controversial issues in the market i.e. CFS MK-II, persistently mounting cement prices in the north of the country amid increasing export of this commodity, and exploitation of newly-found oil and gas reserves in NWFP altogether invited notable fresh investment in relevant stocks on the KSE, analysts said.

They maintained banking, telecom and fertiliser sectors also performed well in the sky-rocketing market, but a few blue chips including EFU General Insurance, OGDCL and FFBL failed to end in the positive column.

With the opening, the 100-index briefly touched 15,263 points, the intra-day high, in early trading, posting the day’s maximum gain of 140 points. Profit-booking at available margins trimmed the day’s high gains by the close of market.

The day closing level of 100-Index surpassed previous peak historic closing level of 15,182 points achieved on Monday, March 24. The difference between the Monday’s and this session peak levels was just of 16 points. Trading volume in the ready market was not astonishing and recorded at 219.459 millions shares, which were slightly up against 215.919 million shares changed hands yesterday.

Rollover week in progress helped future market turnover enhanced marginally as well and registered at 77.332 million shares as compared to 73.050 million of a day earlier. Accordingly, the overall market capitalisation rose by Rs29 billion and improved to Rs4.647 trillion.

Relaxation in cash margins, which were earlier required to avail financing under CFS MK-II and subsequently gradual application of submitting 100 per cent cash margins by June 2008 encouraged optimistic investors opted for accumulations on fundamentally strong counters, said Hasnain Asghar Ali of Aziz Fidahusein and added that cash deposit had been waived in the new structure up to Rs85 billion.

Foreign markets rebounded as US economic outlook improved, which were earlier affecting local market sentiment amid SCRA balances improved to $5 million for this fiscal year. The encouraging news improved the confidence level of local investors at KSE too, said Ahsan Mehanti of Shahzad Chamdia Securities.

The cement manufacturing companies have once again improved their ex-factory prices in North by Rs7-8 per bag where the Pakistani cement demand in Middle East and other parts of the world was rising.

“After witnessing a rise of Rs10-15 per bag on March 24, 2008, cement companies, with a gap of one day, have again hiked up ex-factory cement prices by Rs7-8 per bag in the North. With this spike, average ex-factory cement prices of JS universe cement companies now stand at Rs247-252 per bag,” said Bilal Hameed of JS Mild surge in international oil prices and plans of MOL to develop Manzalai fields invited local players to invest more in related scrips, said another analyst.

The broader market remained in favour of bulls with 175 companies’ stocks advanced against 148 scrips declined in red region. The value of 40 stocks remained unchanged with total 363 active counters in the market.

Highest volumes were witnessed in JS Bank at 17.677 million closing at Rs21 with a gain of Re1, followed by Lucky Cement at 15.572 million closing at Rs138.90 with a gain of 70 paisa, DG Khan Cement at 11.925 million closing at Rs111.65 with a gain of Rs1.60, Pak Oilfields at 11.486 million closing at Rs376.40 with a gain of Rs6.80 and Oil and Gas Development Company at 10.566 million closing at Rs134 with a loss of 80 paisa.

KSE hits new record, rises 76 points

 

[Neo]

Work starts on palm tree cultivation in Balochistan ​

Thursday, March 27, 2008

KARACHI: Pakistan Oilseed Development Board (PODB) has started work on a big pilot project to cultivate palm trees in Balochistan to see if Pakistan’s reliance on imported edible oil could be reduced.

The project that involves plantation of palm trees over 12,000 acres of land in District Uthal is very significant since the price of palm oil in the international market has surged to a record high, PODB Project Director Waris Sheikh told The News on Wednesday.

“Local production of edible oil is only 30 per cent of total consumption,” he said. “And most of it is met from cotton, sunflower and canola seeds.” Pakistan’s total consumption of edible oil is three million tonnes and it pays hundreds of millions of dollars annually on import of palm oil from Malaysia and Indonesia to meet large part of its demand.

The edible oil price more than doubled to Rs140 per kg from Rs62 in January 2007 after the hike in imported cost of palm oil that peaked at $1,400 per tonne against $450 a year back. PODB plans to take up edible oil production from locally-produced seeds to 50 per cent by 2010-2011, Sheikh said, adding palm trees could be planted in Thatta, Badin and Tando Allahyar regions of Sindh and the whole coastal belt in Balochistan.

Though the endeavour to start local plantation of palm trees will take many years, he said, past experience has proved that it is possible if farmers are enticed towards it through monetary incentives.

“Cultivated area under sunflower has increased to 550,000 acres from 43,000 acres in the last five years,” he said, adding that happened after government increased taxes on imported sunflower seeds, increasing demand for local produce.

He said a better support price for domestic sunflower seeds also helped in motivating farmers. The government-fixed support price has been taken up to Rs1,600 per 40kg for current crop against Rs300 that farmers were getting in 2002.

“If similar measures are taken with regard to encouraging cultivation of palm trees then there is no point in not being enthusiastic about the project.” Sh Amjad Rasheed, a former chairman of Pakistan Vanaspati Manufacturers Association (PVMA), said the government should seriously ruminate about cultivating palm trees, especially when its prices were fluctuating continuously in the international market.

However, he said, any initiative towards that end would be futile without participation of the private sector. “The government should provide land to private parties on long-term lease.” He said palm oil seed was preferable over sunflower and canola seed as it was used in making ghee, which is much more popular edible oil product in Pakistan than cooking oil.

The project director of PODB said initially Tenera Hybrid seeds will be imported to cultivate palm plants in the country and subsequently the hybrid will be duplicated through tissue culture techniques.

Work starts on palm tree cultivation in Balochistan