Pakistan Economy - News & Updates - Archive

[Neo]

British investors ready to multiply investments ​

Friday, May 16, 2008

LAHORE: Senior Country Manager South Asia, for UK Trade and Investment, Peter Courtney has said that Britain, being the largest investor in Pakistan, is ready to multiply its investment in Pakistan and is taking all necessary steps in this regard and urged Pakistani businessmen to come forward for joint ventures.

He expressed these views while speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Thursday.

He said that a number of projects were in the pipeline as the consistent economic policies of the present government had impressed the potential British investors who had shown their desire to shift their operations to Pakistan which is not only a corridor to Central Asian States but also fast getting the status of regional economic leader.

He said that the British government would continue to facilitate Pakistani businessmen for the promotion of trade between the two countries.

Speaking on the occasion, the LCCI President Mohammad Ali Mian said energy deficient Pakistan has a huge potential for British investors. He said during the last five years, the business environment in Pakistan has improved considerably. Its economy has been growing at the rate of 6 per cent on average over the last three years. Hence, the investment cycle is gaining momentum.

He said doing business in Pakistan is comparatively easy to other South Asian nations. It ranks at number two in the South Asian nations after Maldives, in terms of doing business.

He said the potential sectors of interest for the British investors could be infrastructure projects such as hydro-electric power generations, fruits, vegetables, livestock, dairy development, fisheries, horticulture, storage facilities for agricultural products textiles, garments, leather & leather products, chemicals, electrical and electronic appliances, oil and gas, IT, ports & ports handling etc.

“We are particularly keen on British investment that could provide transfer of technology to Pakistan,” he informed.

Pakistan’s major exports to UK include textile yarn & fabrics, articles of apparel & cloth, sports goods, cane molasses, rice, footwear, etc.

British investors ready to multiply investments

 

[Neo]

IT sector receiving highest FDI: minister ​

Friday, May 16, 2008

KARACHI: Sindh Minister of Information Technology Muhammad Raza Haroon has said that the IT industry is the most lucrative and secure sector of the economy, witnessing US$8 billion in investments over a period of four years.

He further said that there are imports worth $147 million into the IT sector every year, marking it amongst the industries that receive the highest foreign direct investments (FDI), following which there are plans to construct a media city in the country.

The IT minister and Chairman of Pakistan Telecommunication Authority (PTA), Shahzada Alam Malik inaugurated Connect Pakistan 2008, the third international information technology exhibition being held at the Karachi Expo Centre from May 15 to 18.

Haroon cited an example of China Mobile’s investment in the form of Zong cellular service providers, which is the largest investment to date in the IT sector. Haroon explained that to be a developed country, it is essential to progress in the IT sector.

He further informed that there are about 15 projects at various stages of planning in the IT sector. These include on going discussions with City Nazim Mustafa Kamal for a vision to construct town-wise call centers, which would specialise in providing information to each of the 18 towns of Karachi.

He articulated that the government is trying to create a friendly environment to avail the investment opportunities from all over the world, adding that they are also working on various projects to promote IT awareness throughout Pakistan. He stated that his vision was to have at least one IT educated person per home across the country. For this reason, he was hoping to establish a university that would specialise in the various fields of information technology.

Raza admitted to Pakistan’s IT sector being far behind than most countries and blamed the poor education system for it. “This Urdu/English medium system has not only created a disparity in our society, but has also led to a greater part of the population being prevented from becoming well versed in the IT sector,” he commented.

PTA chairman, Malik said that last year, investments worth $2 billion were made and there are six more foreign mobile service provider companies, which have applied for licenses and are waiting for approval.

Alam also appreciated the technology display showcased at the exhibition, stating that the said exhibition will provide an opportunity to interact, connect, and to leverage each other’s capacity.

CIO Leadership Conference: Along with the exhibition of Connect 2008, The CIO Leadership Conference was also held at a local hotel on Thursday. The topic of the conference was “Trends and Developments in the use of Communications and Information Technology.”

Addressing the conference, the chief guest, PTA chairman, Shahzada Alam Malik highlighted that the year 2004 is marked as an important year for Pakistan since the privatisation of the government institutions began, which opened the way for future development.

He informed that at present, over 90 per cent people have access to the mobile phones, and over 2 million connections are sold every month.

He added that in the future, PTA is planning to announce mobile banking, which will enable users to transfer funds through their cellular phones.

He further stated that on PTA’s instructions, mobile operators are now providing Mobile Number Portability (MNP) facility to its users, which is going to create healthy service competition amongst them.

IT sector receiving highest FDI: minister

 

[Neo]

Incentives for agriculture, industry, exports sought ​

Friday, May 16, 2008

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has said that the upcoming budget should focus on agriculture, manufacturing and export sectors, which must be given the right incentives to grow.

In its budget proposals OICCI said tax base must be broadened so that there is a significant increase in the tax to GDP ratio and the emphasis should be on controlling imports and increasing exports.

OICCI highlighted that corporate taxes are very high in Pakistan as compared to other developing and developed markets in the region. Corporate Tax is charged at a rate of 35 per cent in Pakistan as compared to 28 per cent in Malaysia, 29.7 per cent in Korea, 30 per cent in Indonesia, 33 per cent in China and 33.6 per cent in India. The Chamber has recommended that that the corporate tax rate should be capped at 30 per cent for all companies.

The manufacturing sector in Pakistan faces - in addition to conventional taxation - taxes on account of Workers Profit Participation Fund (WPFF) and Workers Welfare Fund (WWF).

The OICCI proposed elimination of WPFF in its entirety as the intent of levying taxes on these two accounts discourages existing manufacturing concerns from expanding their businesses and also discourages foreign investors from setting up manufacturing operations.

Similarly, it has been proposed that companies should be provided an option of Presumptive Tax Regime (PTR) or NTR for their manufacturing/import/contract execution business.

OICCI has proposed the withdrawal of withholding tax on stock exchange transactions, as it will eliminate the chances of misuse by various individuals and financers.

Likewise, it is recommended that marginal tax relief should be introduced by the government against preset criteria for the salaried class in order to avoid extra burden of tax due to nominal increase in remuneration.

The OICCI has also proposed that the third schedule of the Sales Tax Act should be deleted, as it obliges companies to suffer the sales tax on sales price, which does not pertain to the company, thereby eroding the true concept of sales tax law.

Incentives for agriculture, industry, exports sought

 

[Neo]

140 milk cooling plants to be installed in Punjab ​

Friday, May 16, 2008

LAHORE: Livestock Dairy Development Board (LDDB) will install 140 milk cooling plants across Punjab in order to increase the shelf life of milk and to ensure the supply of pure milk to the consumers.

Under this project, the LDDB has installed 34 milk cooling plants in the different areas of Punjab including Kasur, Nowshera Virkan and Mandi Bahauddin. The number of plants operating in each area are; 14 in Kasur, 12 in Nowshera Virkan and 8 in Mandi Bahauddin.

According to a statement issued here on Thursday, Deputy Project Director of the LDDB milk cooling plants, Dr Naveed Niazi, stated that the board had spent over Rs20 million on this project and the plants were provided to the small farmers free of cost.

Dr Niazi said that in the province, 51 milk producer groups had been formed which were using these plants.

Every group consists of 10 to 12 small farmers he said, adding that these framers brought there produce at a selected place where the plants were installed.

He said that one local person has hired to operate each plant. The board provided them with proper training to handle the plants and to vaccinate animals. The plant operator not only operates the milk cooling plant but also helps educate the farmers so they can increase the milk production by using better feed and medicines.

Dr Niazi said after the installation of the milk cooling plants, farmers were receiving an average of Rs4 to Rs5 per litre for the milk.

140 milk cooling plants to be installed in Punjab

 

[Neo]

Govt to increase budget allocation for mega dams in PSDP​

ISLAMABAD: Government has decided to enhance budget allocation for five mega dams including Basha, Kalabagh and Akori in the next Public Sector Development Programme (PSDP) 2008-09, a senior official in Planning Commission told Daily Times Thursday.

He said allocation amount of Rs 2.6 billion in the current year PSDP 2007-08 has been lapsed. However, he said if the North West Frontier Province (NWFP) government demanded money, federal government would arrange from commercial banks for land acquisition of Basha dam.

He said allocation of Rs 2.6 billion was made for the initial work on all dams including Kalabagh, Akori, however, now it would be converted to invest on Basha dam construction. German Company, Lehmar will issue the final detailed engineering design soon.

For Kalabagh dam project, he said allocation would not be made for specific dam. The allocation would be for all five big dams announced by President, Pervez Musharraf, he said.

He said Water and Power Development Authority (WAPDA) would also generate Rs 35 billion from different sources. He said government would focus on the construction of Basha dam.

Official said work on Karakuram Highway to link Bhasha dam was underway and federal government has released Rs 2 billion for Karakuram Highway during current year. Karakuram Highway to link Bhasha dam link would be upgraded at a cost of Rs 11.578 billion.

Official said the funds would be generated from international donors. Two main donors Asian Development Bank (ADB) and China Development Bank have agreed to provide financing for carrying out 4500 megawatt Diamer Bhasha Dam project.

China Bank has agreed following the request of Pakistani authorities during President, Pervez Musharraf recent visit to China, another official added.

These two international financers have asked Government of Pakistan to forward the final detailed engineering design of the Bhasha Dam Project so that they could determine the volume of financing required for project.

He said after the indication from these financers, chairman WAPDA, Shakil Durani has asked Lemhyer to issue final detailed engineering design of Bhasha Diamer Dam Project before the end of next month. Under the initial draft, cost of the project stands at $8.5 billion against projected cost of $6.5 billion in year 2005.

China Development Bank could make a joint venture with ADB to provide financing to Pakistan. The construction of the project is said to commence in the year 2009. Due to delay in the implementation of the project, there is further increase by 10 percent.

Bhasha consultant, Lemhyer in its initial draft of the dam has recommended the government to set up four hydropower stations of 1150 Megawatt under Bhasha Diamer Dam Project for the royalty to North West Frontier Province (NWFP) and Northern Areas.

The company has also indicated 27,000 families would be affected by the construction of the Bhasha dam. The company has recommended setting up nine model villages near Gilgat to accommodate these affected families.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Mangla Dam raising project: WAPDA directed to arrange Rs 20bn​

ISLAMABAD: The Water And Power Development Authority (WAPDA) has been directed to arrange Rs 20 billion for Mangla Raising Dam Project for 6 to 7 years instead of 6 to 7 months, officials sources told Daily Times Thursday.

In a high level meeting WAPDA failed to satisfy the participants over the mode of repayment Rs 20 billion at 10 percent rate of interest for a period of 6 to 7 months. The participants were of the view that it would be difficult for WAPDA to repay the said amount in such a short period.

After detail discussion during the meeting held a few days ago, the participants directed WAPDA to seek Rs 20 billion loan for a period of at least 6 to 7 years, officials sources added.

Mangla Dam Project, constructed on river Jhelum in year 1967 as a part of Indus Basin Development Plan, was the first major multipurpose project of Pakistan. The main components of the project include main dam, intake embankment, three auxiliary dams, main spillway, emergency spillway and a powerhouse. The reservoir was first impounded in February 1967 and since then it has undergone more than 30 cycles of operation. The operation of the reservoir is guided by rule curves developed on the basis of historic flows, forecast of inflows, irrigation demand and at times accommodation of additional minor releases for power generation. The original design live storage was 5.88 MAF, which has been reduced to 4.28 MAF due to siltation. In order to increase its capacity up to 7.16 MAF, WAPDA initiated measures to raise the Mangla Dam by 40 ft (from 1234 to 1274 ft).

On the basis of feasibility study carried out by WAPDA a PC-I was approved by the ECNEC in 2003, at a capital cost of Rs 62.552 billion including foreign exchange component (FEC) of Rs 9.678 billion for six years implementation period. The project however, could not be completed within approved cost and time frame due to contractual problems and price escalation. Accordingly, WAPDA has revised the PC-I at an enhanced cost of Rs 101.384 billion.

Main objective of the project is to raise Mangla Reservoir by 40 ft so as to regain the lost storage capacity by 2.9 MAF, increase power generation by 772MW and to mitigate flood losses by reducing flood intensity.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

EU wants to enhance trade ties with Pakistan​

ISLAMABAD: European Union (EU) is interested to help and implement cooperation activities between Pakistan and the EU.

Counsellor head of section-Political Economic and Trade Matters EU, Peter Berz Thursday said the EU delegation was seeking to enhance trade relation with Pakistan.

During a meeting with SAARC Chamber of Commerce and Industry, he said the delegation could play a central role in promoting the chief policy objective of the EU in Pakistan.

He said EU aim was to strengthening relations between EU and Pakistan through enhanced mutual understanding and in particular by cooperating with Pakistan in its development objectives through development co-operation programme.

He said promoting EU-Pakistan trade and investment through EU trade policy and economic co-operation activities is also on the list.

He said purpose behind their support for South Asian Free Trade Association (SAFTA) was to strengthen regional trade and to enhance the economic cooperation among the SAARC member countries.

The delegation showed their keen interest in implementing SAFTA to get maximum worth of primary objectives of its creation.

President SCCI, Tariq Sayeed briefed the delegation about activities of SCCI and said main focused areas involving Regional Economic Cooperation (Custom and Standards Harmonization), SAFTA, trade facilitation, transport and infrastructure development, tourism, women entrepreneurs and SMEs. He said SCCI had keen interest to get benefit of Europe experiences on areas such as Free Trade and Economic Union and SCCI would like to focus on long term business partnership to improve EU-SAARC intra-regional trade and EU investments in South Asia.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Mango exports likely to fall amid crop destruction​

KARACHI: During the current year, Pakistan’s mango exports are likely to fall by more than 40 percent compared to previous year, mainly in the wake of devastation of its crop in Sindh and Punjab.

In 2007, export of country’s one of the most demanding fruit of the summer season stood at 1,20,000 tonnes which was far better compared to the year 2006 when it fell sharply to the level of 88,000 tones, spelling financial gloom and despondency for overwhelming number of farmers and growers.

The expected sharp decline in Mango export would not only deprive the country from earning invaluable foreign exchange but also pose serious hardship for exporters to ensure their presence in the most competitive markets of the globe.

One of the major reason of devastation of unripe mango crop spread over large areas of both the provinces was unexpected blowing of strong winds in Hala and Matiari and prolonged chilling weather conditions and hailstorm during the months of January and February in Rahim Yar khan and Multan areas which played havoc with on the produce.

Annual yield of mango usually ranges between 2 million to 2.5 million tonnes in the country, out of which 5 to 7 percent are exported.

The traditional growing areas of Mango include Rahimyar Khan and Multan, famous globally for their chonsa variety while in Sindh Hala, Matiari, Kotri, Tandoallayar and Chanbar areas are renowned worldwide for Sindhri, which is always in high demand in European, Gulf and Far Eastern markets.

However, the situation has developed into a nightmare for exporters as due to the devastation of mango crops, the expected yield is likely to remain between 7 to 8 lac tones resulting in steep rise in its price.

The country may loose its traditional export markets to India, Australia and other countries that are selling their fruits at comparatively lower rates.

Abdul Wahid, Chairman All Pakistan Fruit and Vegetable Exporters Association, replying to a question said, “this year, overall export costs are also likely to surge sharply in the wake of historical oil prices in the international market.”

All major freight airlines have already announced enhancement of their tariff by 25 to 30 percent to cope with rising petroleum prices.

In addition, local transportation charges have also gone up by more than 30 percent on the pretext of high oil prices, while labour force involved in fruit packing and lifting have also demanded a rise in wages, citing excuse of rampant inflation in the country.

He feared all these additional expenditures, when added to the export cost of the Mango, would render their prices beyond the range of European and Gulf region importers, resulting in sharp decline in its demand during the current season.

Suggesting measures to control the alarming situation regarding high export prices of Mango, he urged the government to offer 30 percent air and sea freight subsidy to exporters enabling them to stay in the global competition. “If this is not done then the country would have to bear irreparable losses in terms of foreign exchange and lost of markets,” Wahid warned.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan's foreign exchange reserves fall by $487 million ​

KARACHI (May 16 2008): The country's liquid foreign exchange reserves have declined by 487 million dollars during the last week. The State Bank of Pakistan statistics show that total liquid forex reserves held by the country stood at 12.2071 billion dollars on May 10, 2008, as compared to 12.2558 billion dollars at the week ended on May 3, 2008.

Major decline was witnessed in the reserves held by the SBP, down by 788 million dollars to 9.8474 billion dollars during the last week as compared to 9.9262 billion dollars a week earlier. While the reserves held by banks increased by 301 million dollars to 2.3597 billion dollars from 2.3296 billion dollars.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Switzerland wants to expand trade relations with Pakistan ​

KARACHI (May 16 2008): The Consul General (CG) of Switzerland, Martin Bienz has said that Switzerland would like to expand its trade relations with Pakistan and offer facilities to Pakistani businessmen.

Speaking in a meeting of Korangi Association of Trade and Industry (Kati) on Thursday, he said that his country had a strong economy and Pakistan could benefit from its experience.

Bienz said that the Swiss businessmen are exploring possibilities of Business Avenue in Pakistan. At present, he said, the Swiss investors' top the list of investors in Pakistan. 'We have Pak-Swiss friendship and the Swiss business consul forums are functioning for promoting business in Pakistan', he added.

To a question he said that his country was willing to invest heavily in Pakistan in Banking and Finance Sector besides Energy Sector. The total Swiss export for January-December 2007, were 206,008.8 million Swiss Franc arid export to Pakistan was to the tune of 330.04 million Swiss Franc in the same period, he added.

On another query he said his office intended to give full support for visas to businessmen recommended by the Kati. The Swiss Consul General also appreciated the efforts of the Pakistan government for its efforts to curb terrorist activities.

The Chairman, Kati, Shaikh Fazl-e-Jalil said in his welcome speech said that Korangi Industrial Area was one of the largest industrial zones of Pakistan, it was spread over an area of 8,500 acres of land and houses more than 4500 industrial, commercial and service units. As per fair estimates, it contributes around Rs 270-million per day (USD-4.4 million) revenue to the national exchequer.

The majority of industries located in the KIA were export oriented and hence earn a great deal of foreign exchange besides providing jobs to hundreds of thousands workforce in industries like oil refineries, lubricating oil blending plants, tanneries, leather and leather garment factories, textiles, garments, silk and towel factories etc. There are more than 370 textile industries in KIA and its adjacent areas and they contribute seven percent of the total textile exports from Pakistan.

Further, he said that Pakistan had a great potential for investments in energy sector therefore Swiss businessmen should come forward and invest in the sector. The Kati Chairman further said 'Pakistan is an agro-based country and our agro-products like rice, wheat. vegetables, fruits, tobacco and raw cotton would be very attractive for Swiss markets'.

There should be a long lasting trade-tie between both the governments in order to improve the bilateral trade, he suggested. Further, Jalil recommended that bilateral track visas should be given to businessmen on the recommendation of Kati for improved business relations. The Chairman Standing Committee, Kati for Diplomats Affairs, Shaikh Muhammad Yousuf also addressed the occasion.

Business Recorder [Pakistan's First Financial Daily]

 

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'Interior Sindh to get industrial zones' ​

KARACHI (May 15 2008): Provincial Minister for Trade and Industry, Rauf Siddiqui has said that in order to attract the foreign investors, the industrial infrastructure and the law and order situation should be improved, says a press release.

Addressing the business and industry trade convention, the minister apprised that two industrial zones would be established in interior Sindh, while Nawabshah and Sukkar would become tax free zones, the release said.

He said that plots in Small Industrial Zones would be provided on half payment aimed at facilitating the small industrialists. In case any industrialist failed to establish industrial unit within two years of allotment, the plot would be taken back from him, he added.

Rauf stressed the need for development of cottage and small industries saying that these industries are directly linked to the development of other industries. The minister further said that to reduce the manufacturing cost of products, electricity generators would be exempted from import duty.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Construction of major dams: government decides to formally launch campaign​

ISLAMABAD (May 16 2008): The government has decided to formally launch a campaign for constructing major dams as the concerned authorities have agreed to go slow on "controversial" Kalabagh dam, sources told Business Recorder on Thursday.

"The formal launch of the campaign will help the government in procuring foreign and local funding for the dams, whose construction is must to save the country from becoming water-scarce country," the sources said.

The construction of the dams has already been announced by the previous government, but the proposals are in very rough form and the government finds it difficult to attract international donors to provide funding, sources said.

Pakistan wants to build Diamer Basha, Kalabagh, Akhori, Munda and Kurram Tangi dams by 2016. This was a plan that was prepared by the previous government. But very little has been done on implementing these projects and most of the allocation made in the PSDPs in the last two years or so remained unspent.

"The present government, which is facing severe problems in meeting the power demands, will take up all these projects with donors after formal launch, which is likely to be announced sometime this month," the sources said.

The delay on construction of Basha Dam project is escalating the project cost, as federal government has not utilised any money. The government had allocated Rs 2.6 billion for the land acquisition of Basha dam under current financial year's Public Sector Development Programme (PSDP).

Official said that Diamer Bhasha consultants have estimated tentative project cost of $8.505 billion at present against the earlier projected cost of $6.5 billion in 2005. This cost may further escalate due to delay in land acquisition of dam.

Government also allocated as many as Rs 10 billion in PSDP 2007-08 for the land acquisition of five big dams including Kalabagh, Munda, Krum Tungi dams. But the spending remained negligible, the sources said.

The government, according to the sources, would form dam companies for each project to generate funds for their construction, sources said. The donors are not coming forward to fund these projects for there are still issues of concerns, which need to be removed before seeking of funds. According to the sources, the differences of the provinces on Kalabagh dam are known to all.

There are some reservations of the NWFP on Akhori dam. But, these reservations can easily be removed if the government showed commitment, the sources said. There is almost a complete consensus on construction of Basha dam and the government has already asked the donors to support the government in constructing the project.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

The soaring trade deficit ​

EDITORIAL (May 16 2008): The situation in the external sector of the national economy is certainly getting from bad to worse with the passage of every month. Latest official figures released by the Federal Bureau of Statistics (FBS) reveal that Pakistan's trade deficit has risen to an all time high of dollar 16.08 billion in the first ten months (July - April) of FY08, indicating a huge increase of 50.78 percent over the deficit of dollar 11.17 billion recorded in the corresponding period of last year.

The import bill increased by 28.28 percent to dollar 32.06 billion in July-April, 2007-08 as against dollar 24.99 billion last year, while exports grew by only 10.17 percent to dollar 15.26 billion from dollar 13.85 billion during the first ten months of 2006-07. The relevant data indicate that increasing crude oil prices as well as higher imports of luxury items like mobile phones and cars and sluggish growth in exports have combined to push up the trade deficit to a record level.

The import of wheat, edible oils and fertilisers, has also witnessed the highest-ever increase. The purchase of a jet for PIA last month also put an unusual burden on the import bill. On the export side, rising oil and energy costs together with other inefficiencies are believed to have rendered Pakistani exportable goods less competitive in the world markets.

The more worrying aspect is that authorities of the country seem to be largely indifferent to the evolving situation in the external sector which continues to be highly discouraging. With imports showing an alarming increase of 59.32 percent, the trade gap reached as high as dollar 2.29 billion in April, 2008.

It is not difficult to visualise the impact of such a deteriorating situation in the external sector. If the present trend continues, and there is no obvious reason to assume otherwise, the trade deficit during 2007-08 could reach the highest-ever level of nearly dollar 21 billion in the country's history as compared with the deficit of dollar 13 billion last year.

Such an outcome would be much worse than the expectations of a dollar 10 billion-11 billion deficit, in the beginning of the year which would have been manageable only if other items in the current account of the balance of payments would have recorded surpluses to an extent so as to neutralise the impact of growing trade deficit.

Since this has not happened as indicated by the equally worsening trend in the current account, the government is going to face an uphill task to overcome the challenge of bringing back the country to a sustainable position in the external sector.

Obviously, exports have to be increased rapidly by overcoming various constraints like energy shortages and imports must be curtailed to ensure that the trade gap remains within reasonable limits and may be easily financed through normal inflows under other heads like home remittances and foreign investment.

Ishaq Dar has talked about foreign inflows to the tune of dollar 3-3.5 billion to bridge the gap in the external sector this year but such sources of funding are either debt creating or temporary in nature and cannot be relied upon as a reliable/permanent source of funding for the country. The need of the hour is to strive hard and make concerted efforts to arrest the worsening trend in the trade deficit by putting in place a policy framework, binding the country to live within its own means which would necessitate a balance between foreign exchange receipts and payments of the country.

The basic thrust of the new strategy should be to contain domestic demand by implementing appropriate fiscal and monetary policies. There is no doubt that lax fiscal policy in the recent past has not only spurred price pressures in the economy but has also increased import demand in the country to a great extent.

An effective policy shift must be complemented by reducing the level of less essential imports drastically through administrative measures like outright ban or imposition of high regulatory duty. The country is obliged to import necessities like basic foodstuffs but can live without the import of mobile phones and cars for some time.

At the same time, the powers that be must involve themselves more in highly burning issues like the one we are talking about now and concentrate less on non-economic matters for the larger interest of the country. The State Bank and other relevant authorities would find it much more difficult to narrow the gap in the external sector, stop the flight of capital, counter the onslaught on the rupee in the foreign exchange market and maintain the existing level of reserves etc if political uncertainty in the country is allowed to persist.

Business Recorder [Pakistan's First Financial Daily]

 

[sohailbutt]

Stocks plunge by 247 points at weekend​

Karachi: Bears grew further strong on Friday, taking away 247 points from the benchmark KSE-100 Index which finished the day at 14,232.

The downgrading of Pakistan’s foreign currency’s rating by Standard & Poors shook confidence of the investors who opted for off loading their holdings.

The trade volume was registered at 160 million shares – down by 10 million compared to yesterday’s trading.

Pak Premier Fund emerged top volume leader which shed 10 paisas to close at Rs13.10.

KSE-30 Index declined by 373 points to 16,882.

Market analysts forecast short recovery in the coming week.

Stocks plunge by 247 points at weekend - GEO.tv

 

[sohailbutt]

Dubai Ports World building Rs 10 billion container terminal at PQ ​

KARACHI (May 17 2008): The Dubai Ports (DP) World is constructing a new container terminal with a draft capacity to accommodate mother ships at Port Qasim at an estimated cost of 10 billion rupees. A portion of the terminal would be financed by a banking syndicate under the Islamic finance facility.

According to sources, the international port developer was building the "QICT-II" next to Qasim International Container Terminal (QICT) under an agreement it had signed with the Port Qasim Authority in 2006.

On May 15, a tripartite banking syndicate comprising National Bank of Pakistan, Dubai Islamic Bank Pakistan Limited and Standard Chartered Bank Pakistan Limited inked a deal with the QICT, a company of DP World, for Rs 5 billion Musharika finance facility to expand its infrastructure.

DP World has started work on the project, which would be completed in three phases with the first phase to be completed by 2010, a QICT official told Business Recorder on Friday. He said the new terminal, which would be made operational by the end of the first phase in 2010, would have a capacity to handle around 0.3 million TEUs.

Currently, the cargo handling capacity of the QICT stands at 0.8 million TEUs, while total number of containers handled in the country stands at 1.8 million TEUs.

The official said the terminal would be developed on built-operate-and-transfer (BOT) basis with a 21-year transfer period adding that the second phase of construction would be completed by 2013.

The QICT official said the terminal would have a 13.5-meters draft and would have the capability to accommodate the mother vessels. However, a PQA official confirming visit of mother vessels to the new terminal, said the draft issue would be decided by the authority after undertaking capital dredging.

He recalled that a five-member delegation had visited Dubai sometimes in the second quarter of 2006 to negotiate the Rs 10 billion project with DP World. The two sides after discussing all modalities had singed an agreement in August 2006 in Islamabad.

Business Recorder [Pakistan's First Financial Daily]