Pakistan Economy - News & Updates - Archive

[dr.umer]

Atlas, KASB, Mybank in queue for sale ​

22 Oct 2008

KARACHI: A new wave of mergers and acquisitions has swallowed up three more small banks KASB Bank, Atlas Bank, Mybank – leaving no option for them but to change their status after realising their existence under the current circumstances is no more possible.

Industry sources said that a consortium led by Hussain Lawai had finalised a deal with Mybank. The same consortium had signed an MoU with the Arif Habib Securities Limited (AHSL) to invest Rs4.5 billion to acquire up to 50 per cent shares of the Arif Habib Bank Limited (AHBL).

Sources said the amount involved in the deal of Mybank was about Rs5.3 billion, however, it was not known that when this process of acquisition would be completed. Mybank, which was incorporated in 1992, operates with 76 branches across the country. The paid-up capital of the bank is Rs4.243 billion, equity Rs5.148 billion and total assets Rs41.344 billion.

On the other hand, the KASB and Atlas Group on Tuesday announced that they had agreed to merge their respective banks. As a result, KASB Bank, KASB Capital and Atlas Bank would merge together to form KASB Atlas Bank.

The State Bank of Pakistan immediately approved the merger and termed it a positive move.

The merged entities would have a capital base in excess of Rs12.5 billion and a branch network exceeding 110 branches.

The small and medium-sized banks, which are not more than 12, in Pakistan have been in the grip of fear since the enhancement of minimum capital requirement (MCR) by the State Bank.

In August, the SBP had raised the MCR of banks to $300 million and asked all banks to attain the target till 2013 in phases. Till 2009, banks were bound to achieve MCR of Rs6 billion.

'The sharp jump in MCR to $300 million is beyond the capacity of these small- and medium-sized banks to achieve,' said Aamir Ahmed Khan, a banking analyst. 'These banks are now looking for opportunity to leave the field for large banks,' he added.

The recent turmoil in the US and European banking industry has also put enormous pressure on the local banking industry. 'These banks have geared up their efforts to get out of the industry or merge with a giant for mutual survival,' said a senior banker.

With equity of over Rs5.2 billion and assets base of over Rs.24.79 billion, Atlas Bank is supported by the trusted equity of Atlas Group, a leading manufacturing, financial services and trading group.

Among the small banks Atlas Bank is relatively stronger one. It began its journey back in the year 1990 when Atlas Group and the Bank of Tokyo-Mitsubishi Limited entered into a joint venture as Atlas Investment Bank Limited.

Later in 2002, the bank merged with Atlas Lease Limited and acquired Dawood Bank Limited in December 2005 and renamed it as Atlas Bank Limited and merged Atlas Investment Bank in to Atlas Bank in 2006. Atlas Capital Markets (Private) Limited was also incorporated in 2006 and is currently a wholly-owned subsidiary of the bank.

The KASB Bank, formerly Platinum Commercial Bank Limited, was incorporated in Lahore on October 13, 1994 as a public limited company under the Companies Ordinance, 1984 and received banking licence from the State Bank of Pakistan on January 9, 1995. The bank is currently operating with 41 branches in different cities. Total equity of the bank is Rs4.159 billion with paid-up capital of Rs4.015 billion.

SBP welcomes

Meanwhile, the State Bank in a statement has supported the merger and approved it saying it is in line with its 10-year Financial Sector Vision and Strategy.

The SBP has been working towards catalysing a new wave of mergers and acquisitions across the banking sector which is likely to yield more solid and substantive results, particularly in the present environment, the central bank said.

Anticipating more mergers and acquisitions, SBP Governor Dr Shamshad Akhtar said that the central bank was working round-the-clock to help generate such partnerships and would work closely with concerned parties to conclude such transactions smoothly and speedily.

'The merger is in line with consolidation policy being pursued by the State Bank of Pakistan to make the financial sector of Pakistan more vibrant, robust and resilient so that it could meet the financial needs of all sectors and segments of the society in the country,' she added.

 

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Govt sets 25m tonnes wheat production target ​

Wednesday, October 22, 2008

ISLAMABAD: The government on Tuesday unveiled its Rabi crop plan with emphasis on growing more wheat while ignoring rest of the crops and no details of availability of inputs and weather condition.

The official press brief distributed after the meeting of The Federal Committee on Agriculture (FCA) held at the P block with Federal Minister for Food, Agriculture and Livestock Nazar Mohammad Gondal in the chair, not even mentioned the production Rabi crops of sunflower and other oilseeds.

Overlooking oilseed crops is contrary to the directives of Prime Minister Syed Yousuf Raza Gilani for depending less on imported cooking oil. Palm oil worth over $1.4 billion nearly 70 per cent of local consumption is imported from Malaysia and Indonesia.

Briefing the media at PID along with high-ups of MINFAL, Nazar Mohammad Gondal announced that the target for next wheat crop would be 25 million tonnes while for the rest of the crops the target remains unchanged.

He did not share any specific plan for achieving this target and reducing the increasing prices of wheat for the consumers.

“Ensured Guaranteed Minimum Price (GMP) for wheat is the only formula to have good next crop and the federal government is pursuing this policy,” the minister said.

“It is responsibility of the government to feed its citizen locally grown grain rather than imported one. Now the commodity is at par with international price and no subsidy would be given to wheat grower of Canada, US and CARs,” he said.

The minister also did not mention the availability of water, fertilizer, and pesticides for achieving wheat production of 25 million tonnes.

To a question about the rising sugar price, the minister said that there is no shortage of commodity in the market and coming cane crop is enough to meet the domestic consumption of the sugar.

The minister said that agriculture sector is still not competitive and profitable enough to bear agri-income tax, although growers are paying numerous indirect taxes on inputs, levy on transport of produce to markets, in addition to land revenue and water charges where applicable.

About the Kharif crops Gondal said: “We have a record production of rice while cotton and sugarcane were short of target at 14.1 and 63 million tonnes respectively.” The government is working on promotion of Bt cotton for achieving excellence in cotton production, the minister said.

 

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Rice output seen up to 6.54m tonnes ​

Wednesday, October 22, 2008

ISLAMABAD: Pakistan’s rice output is expected to rise to 6.54 million tonnes in the 2008/09 crop year, up from 5.50 million tonnes the previous year, Food and Agriculture Minister Nazar Muhammad Gondal said on Tuesday.

Pakistan’s eight-month-long rice season runs from April to November. Final estimates for the crop are due in late December.

“Despite a shortage of irrigation water, our rice crop has increased,” Gondal told a news conference in Islamabad.

Gondal did not give an estimate for how much of the crop would be available for export, but said: “As far as exports are concerned, rice is the major crop.”

Pakistan is the world’s fifth-largest rice exporter and it has removed a minimum export price on basmati and non-basmati rice after expectations of a bumper crop.

Overall rice exports in the first quarter of the July-June financial year to September rose 41.58 per cent to 619,090 tonnes compared with the same quarter last year, according to the Federal Bureau of Statistics.

Exporters expect rice output of 7 million tonnes this year and say exports could exceed 4 million tonnes compared with 3.3 million tonnes last year.

Annual domestic consumption is about 2.3 million tonnes.

However, a Karachi-based rice trader said earlier, Pakistan’s rice exports could fall in October and November because Pakistani ports have been inundated with wheat cargoes and buyers have slowed rice purchases because of weakening global prices.

Rice accounts for about 8 per cent of Pakistani exports and 12 per cent of gross domestic product.

 

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IMF clearance necessary ​

Wednesday, October 22, 2008

LAHORE: Without even opting for an International Monetary Fund facility, Pakistan would have to follow conditions of the Fund as loans from multilateral donors have already been linked to a letter of comfort from the IMF.

All international lending agencies seek the opinion of the IMF before sanctioning loans for any country. The IMF states that letters and statements prepared by the staff for providing a signal to the lenders should contain a clear assessment of the quality of macroeconomic and related structural policies of the country seeking loan.

According to the IMF, this assessment should focus on the extent of macroeconomic imbalances and related structural distortions, and on the extent to which current and planned policies are dealing with (or perhaps contributing to) these problems. It should indicate whether the Fund’s staff has major outstanding concerns about these policies. In case of extreme macroeconomic imbalances or pervasive distortions which would likely nullify the benefits of any particular loan or grant, the staff would draw attention to these distortions.

Economic experts point out that the IMF and World Bank first ask the government seeking assistance to remove policy flaws that have forced it to come to the lending agencies. This is done to improve revenues, plug leakages and eradicate corruption in the system and these actions actually hit the influential segment of the society more than the common man.

However, senior economist Naveed Anwar Khan, an FCA, said the dictates from donor agencies were for public consumption only, adding loans were granted by Bretton Woods Institutions with the tacit nod from the US and EU even if the recipient country promises to take measures other than those suggested by the donors to improve revenues.

Instead of improving governance and broadening the tax base, he said, the government resorted to indirect taxation which was an implicit tax on the poor. “This is the reason that despite taking the IMF structural adjustment facility several times the distortions in the economy are the same as were at the time of first structural adjustment loan more than two decades ago.”

He said foreign inflows might bring a temporary relief to the economy but real solution lay in better governance and transparency where every segment of the society was taxed according to its income.

The trade and industry, meanwhile, is shuddering on the possibility of the government going for a further increase in taxes without widening the tax base. They have a reason to worry as both domestic and export sales are on the decline. Addition of new taxes would further depress the sales, particularly in the local market.

“Prices have gone out of the reach of consumers,” said Syed Nabeel Hashmi, former chairman Pakistan Association of Automotive Parts and Accessories Manufacturers.

He said car manufacturers had been forced to increase prices despite a 50 per cent decline in sales as undue taxes, high dollar rates and rampant corruption were pushing up the production cost while there were no buyers of the products.

Industry circles pointed out that the tax base had remained almost stagnant in the last decade while tax revenues increased three-fold.

The increase in the number of taxpayers during the period came mainly due to the workers as they crossed the income tax ceiling after a rise in salaries. Otherwise, the number of companies or traders had not increased substantially.

They pointed out that tax compliance had not kept pace even with the increase in the gross domestic product.

In fact, the tax-to-GDP ratio declined by three percentage points in the last 10 years, though the tax amount increased three times. That, they added, indicated that the ratio of non-documented economy was on the rise.

Industry circles said that non-development expenditure of the government also quadrupled during October 1999 to October 2008.

Defence budget has doubled while the tax is being taken from the same set of entrepreneurs that were paying taxes in 1999.

They said the capital market, agriculture, real estate, lawyers, doctors, engineers and above all traders should be forced to pay according to their real income and not on the basis of declared income.

 

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Pakistan weighs options as payments crisis looms ​

Wednesday, October 22, 2008

ISLAMABAD: Pakistan has just a few weeks to raise billions of dollars in foreign loans needed to keep meeting debt payments and pay for imports, according to the country’s newly appointed economic troubleshooter.

Shaukat Tarin, the adviser to the prime minister on economic affairs, reckoned Pakistan needs $10 billion to $15 billion to avoid a balance of payments crisis and undertake adjustments needed to right the economy over the next two years.

The government has been seeking the International Monetary Fund’s endorsement of its economic strategy, and appears poised to ask the IMF for a loan. Other donors could follow suit.

The international community can ill afford economic chaos in a nuclear-armed, front-line state in the war on terrorism.

How much foreign currency does Pakistan have?

As of Oct 11, Pakistan had $7.75 billion of foreign currency reserves, of which the central bank held $4.34 billion, barely enough to cover six weeks of imports. And that was 10 days ago.

The rupee hit at an all-time low of 84.40 per dollar on Oct 17, around 27 percent weaker than it started the year, but had recovered to 80.90/81.70 on Tuesday.

The News daily has reported $1.5 billion of central bank reserves were accounted for by forward booking liabilities.

How long can Pakistan go on b4e fore it runs out of dollars?

Tarin said on Saturday Pakistan had to show some action in the next 30 days, but he also said he was confident that financing would be sown up within 60 days.

The international bond market has already priced in a default on a $500 million bond due to mature in February.

Pakistani officials say it won’t come to that. Officials are hopeful of other multilateral lenders and friendly governments coming to Pakistan’s aid, if not they’ll go to the IMF.

How much money does Pakistan need to stay afloat?

Pakistan needs between $10 billion and $15 billion. Tarin said “immediately”, but Pakistan doesn’t need it all at once.

The IMF estimates the financing gap on Pakistan’s balance of payments at up to $4.5 billion, compared with the government’s estimate of $3.0 billion for the fiscal year ending on June 30 next year, Tarin said.

A senior IMF official has been quoted as saying the gap is more like $5 billion this year and $5 billion next year.

How much is Pakistan spending?

Economists say Pakistan is shedding reserves at a rate of about $1 billion a month.

The September trade deficit was $2.207 billion.

In July-September the current account deficit widened to $3.95 billion from $2.27 billion in the same period a year ago.

The main factors behind the widening deficit are soaring oil and food prices, compounded by a poor wheat crop last year.

Recent falls in the oil price should help reduce the deficits.

How can Pakistan help itself?

The rupee’s depreciation will go a long way to inducing overdue adjustments in the economy.

The central bank could raise interest rates, while easing banks’ liquidity, impose capital controls, ban imports of non-essentials, limit dollar purchases by foreigners in Pakistan.

Inflation around 25 per cent is a good reason to raise interest rates, but a rapid slowdown in growth limits the scope.

Pakistan can also stop foreigners from withdrawing funds. A floor imposed on the stock market in August effectively stopped investors exiting a market that had fallen 35 per cent this year. The Karachi Stock Exchange plans to remove the floor on Oct. 27. Investors fear it will probably spark a rush for the door.

Bringing in rules to make foreigners keep proceeds from sales of stocks or bonds in Pakistan for a set period is an option.

The central bank can also buy time by imposing capital controls that would break the link between onshore and offshore players, like ending credit facilities for offshore players.

What can Pakistan do to fix its budget?

Stop government borrowing from the central bank.

Cut current, development and defence spending. Zardari may face objections from Pakistan’s powerful army as it battles against Islamist militants across the northwest, and tries to match Indian military power.

Broaden the tax base. At 10.5 per cent, Pakistan’s tax as a percentage of GDP is one of the lowest in the world.

Raise taxes on agriculture, a move long resisted by Pakistan’s influential landed aristocracy.

Raise taxes on services, including real estate and stock market transactions. Even though the market is in a very fragile state, analysts say it will eventually recover.

Where could help arrive from?

The global economic crisis clouds prospects for help.

The IMF would offer Pakistan favourable terms of 5-6 per cent interest. The World Bank has $1.4 billion available under an existing programme for Pakistan, but it needs board approval. The Asian Development Bank, the Islamic Development Bank, and Britain’s development agency would all help, Tarin says.

The US presidential election complicates prospects in the short term, but the United States is already Pakistan’s biggest lender and there are long-term proposals to boost financing.

 

[Neo]

Saudi-Pak investment conference begins ​

Wednesday, October 22, 2008

ISLAMABAD: The 2nd Saudi-Pak Investment Conference was jointly inaugurated by the Vice Chairman of the Jeddah Chamber of Commerce and Industry, Mazen Baterjee and Pakistan’s Minister for Ports, Shipping, Investment and Privatisation, Syed Naveed Qamar in Jeddah on Tuesday.

According to a statement by Consulate General of Pakistan Jeddah, Baterjee while welcoming the guests said that the Kingdom was building new economic cities and needs Pakistani investors to invest in these mega projects. He said that 300 new Pakistani investors have been registered with Saudi Arabian General Investment Authority (SAGIA) and they were working in construction, services and other allied sectors, said the statement received here on Tuesday.

Batterjee informed that the Kingdom has revised its laws to allow maximum facilities to the new investors to participate in the development of the Kingdom and also share the profits. He said that six million people were expected to perform Umrah and Hajj in the coming year and all investment in the services sectors will be of immense benefit to these investors. He said that the Saudi market was the biggest market of the region and a gateway to the African countries, adding that Jeddah being the hub of economic activities and the gateway of the Kingdom, provides immense opportunities for trade and investment.

Speaking on the occasion, Syed Naveed Qamar said that the people and the Government of Pakistan hold the people and Kingdom of Saudi Arabia especially the Custodian of the Two Holy Mosques, King Abdullah bin Abdul Aziz and the Royal family, in high esteem. The Minister said that opportunities exist in Pakistan due to its geo-strategic location adding that Pakistan was the gateway to the landlocked Central Asian countries and as such is the biggest market of the region.

Syed Naveed Qamar said, “this is the time when Saudis should come forward and take the benefits from the available opportunities”. The Minister said that he has brought high-profile people representing various sectors who can ensure confidence building in Jeddah with their counterparts for greater collaboration in these sectors.

The Minister again offered collaboration and investment in agriculture sector where investment can be made to ensure food security.

 

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‘New measures to stabilise economy’ ​

Wednesday, October 22, 2008

ISLAMABAD: The government is taking new measures to increase foreign exchange reserves which would stabilise the economy within months, Adviser to Prime Minister on Economic Affairs Hina Rabbani Khar said here on Tuesday.

Talking to PTV, she said Pakistan was considering to seek loans from other countries and financial institutions to meet its payment crisis. Replying to a question, she said there was no danger of default but Pakistan needed to bring down inflation and show flexibility on the rupee exchange rate.

About the IMF, she said: “If we want to go to the IMF, we can... but only as a backup,” adding, she was confident Pakistan had a viable plan to work through its problems. Hina was optimistic that economic situation would improve and Pakistan would be in a very good position within the next 5 to 6 months.

 

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‘Balochistan facing 445 MW power deficit’ ​

Wednesday, October 22, 2008

QUETTA: Quetta Electric Supply Company (QESCO) Chief Executive Officer Engineer Shafiq Ahmed Khattak on Tuesday said Balochistan was facing a shortfall of 445 megawatt. Addressing a news conference here at the press club, the QESCO CEO said electricity requirement of Balochistan stood at 1,250 megawatt, but it was producing 805 megawatts; thus, there was a shortfall of 445 megawatts in the province.

As a result of the shortfall, the QESCO has been forced to carry out load-shedding for six hours in Quetta, eight hours in the surrounding areas, 12 hours in the rural areas, 12-18 hours for steel furnaces.

Engineer Shafiq Ahmed Khattak regretted that 10-11 per cent power was being reportedly pilfered. The head of QESCO revealed that around 150 QESCO personnel had been suspended on charges of their involvement in the power pilferage.

The QESCO chief said new meters would be installed in the city in the morning and evening timings for implementing new tariffs. He disclosed that Rs 9,764 million were outstanding against its consumers. Of the mentioned amount, Rs 867 million is due against the provincial government, Khattak added.

 

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Law and order situation in Sindh viable for foreign investors: Qaim ​

Wednesday, October 22, 2008

KHAIRPUR: Sindh Chief Minister Syed Qaim Ali Shah Jilani on Tuesday said that the law and order situation in Sindh was viable for foreign investors.

Talking to various delegations, which met him at the Jilani House here, Qaim said that during the visit to the US, he had met US investors. He said that he motivated them to invest in Sindh and assured them of providing a good atmosphere.

He added that China had decided to invest in Pakistan.Qaim said that President Asif Ali Zardari had resolved wisely the political crisis and would also resolve the economic crisis intelligently.He said the Sindh government was keen to provide justice to the people at their doorsteps and resolve their issues.

He said that he had issued directives to take severe action against hoarders and those who were selling flour at excessive rates. He said that there was no flour crisis.Qaim said that for strengthening the agriculture sector, the government had increased the rate of wheat.

The chief minister said that the Benazir Bhutto Income Support Programme was being implemented.He said the Sindh government was trying to provide jobs on merit, adding that the recruitment process had started.

He said that there was no threat of terrorism in Sindh. He added that the deteriorating law and order situation in Sindh had been improved by appointing professional police officers, especially in interior Sindh where the cases of kidnappings for ransom were on the rise.

Qaim said that they would accomplish the mission of Shaheed Benazir Bhutto.Meanwhile, the chief minister visited the office of the EDO Health where representatives of the PAIMAN briefed him on their programme.

On the occasion, Qaim said that the Sindh government was focusing on the provision of health facilities and allocated more funds for the purpose.

 

[Neo]

IMF offers $6bn package​

By Anwar Iqbal

WASHINGTON, Oct 21: The United States has repeated its offer to help rescue Pakistan from the current financial crisis as diplomatic sources in Washington say the International Monetary Fund has agreed to provide $6 billion to the country to boost up its ailing economy.

“It’s hard for me to speculate,” said State Department’s deputy spokesman Robert Wood when asked if the IMF had agreed to offer a rescue package to Pakistan. But “we obviously will try to see what we can do to help Pakistan get through its financial crisis”.

Pakistan had “no choice but to seek help from the IMF,” said another State Department official. The official, who was not identified, was quoted in the US media as saying that Pakistani officials knew it would not be a popular decision in Pakistan but they had to go to the IMF.

“It won’t be popular with the public and it sends a lot of negative signals about Pakistan’s financial situation, its creditworthiness. But it’s a decision the Pakistanis are going to have to make,” he said.

The country’s inflation is running at around 25 per cent, and its foreign currency reserves are rapidly depleting, forcing the government to seek emergency cash advance from friendly countries and international financial institutions.

Pakistan is reportedly discussing a $10 billion to $15 billion support package with the IMF and other bodies.

Diplomatic sources in Washington have told Dawn that the IMF has agreed to provide $6 billion to Pakistan to stabilise its economy and to help avoid defaulting on foreign debt repayments due next year.

The money will be available at 5 to 6 per cent interest while Pakistan also has agreed to readjust its monetary policies to qualify for the loan.

The country has already withdrawn subsidies on oil and oil products, a major IMF demand that may hurt millions of ordinary consumers across Pakistan.

“Since Pakistan had already taken some of the most difficult and painful measures, the IMF is willing to help,” said a diplomatic source involved in negotiations between Pakistan and the IMF.

Diplomatic sources said the United States is playing a key role in persuading international financial institutions to help Pakistan but it is also urging Islamabad to undertake serious economic reforms.

Some of Pakistan’s key allies, such as China, also have urged Pakistan to go to the international community with concrete economic plans for seeking assistance instead of “going door-to-door, asking for money,” said Shahid Javed Burki, a former finance minister and vice president of the World Bank.

At the State Department briefing, Mr Wood refused to disclose US plans for helping Pakistan but assured Islamabad that Washington was considering various options.

“It would be premature for me to get ahead of what we may decide to do back here from Washington … but obviously, the situation there is of great concern, not just to us, but obviously to the Pakistanis,” he said.

“And so we will look at ways we can try to help Pakistan, you know, get through this crisis. But beyond that, I don’t have any specifics for you.”

Pakistan’s front-line role in fighting terrorism persuades Washington to help prevent an economic collapse. Policy planners in Washington fear that an economic meltdown will leave this nuclear-armed country of 160 million at the mercy of extremist groups like Al Qaeda and Washington wants to avoid this.

Other Western and Middle Eastern nations also have similar fears and are willing to help.

 

[Neo]

Foreign firm to set up project at PQ​

LONDON, Oct 21: Pakistan High Commissioner to the UK Wajid Shamsul Hasan handed over a letter of intent (LoI) to the chairman of Trans Polymers Limited (TPL) for setting up a petrochemical complex costing $2 billion at Port Qasim.

The project, the first of its kind in Pakistan, is expected to create over 3,000 jobs. According to the high commissioner, TPL’s investment in the complex should help save over $500 million foreign exchange annually, as a result of import substitution and exports, reducing the trade deficit of Pakistan.

He also said the entire production of plants should be sufficient to meet the projected local requirements for polymers.

TPL’s investment, the high commissioner said, should be viewed as a strong indicator of foreign company’s confidence in the policies pursued by the new democratic government of Pakistan. TPL Chairman Peter Lloyd-Cooper apprised the high commissioner of progress of the project in Pakistan.

 

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Parent raises stake in Unilever Pakistan​

Karachi, Oct 21: Unilever Overseas Holdings Limited said on Tuesday that they had acquired 323,548 additional shares in Unilever Pakistan Limited, raising their holdings in the company to 9.68 million shares representing 72.84 per cent of the total paid-up capital, from 70.40 per cent previously. The Unilever Overseas has also accumulated 70.52 per cent of the preference share capital of the company.

Analysts viewed it as rare good news for the country’s stock market, where a foreign investor (if only a holding company) has shown confidence in its Pakistani subsidiary. But there are reasons to be optimistic.

The Unilever Pakistan is one of the highest quoted scrips on the stock exchanges with price tag of Rs2,340 for a 50-rupee share.

The recent waves of equity erosions passed over the Unilever stock, licking almost nothing from the value of Rs2,361 quoted on April 18, the day when the market was caught in the downward spiral.

Shareholdings in Unilever Pakistan, other than those by overseas holding company, are widely dispersed among institutional and individual investors. But much of them are in frozen blocks as the stockholders seldom part with their stake.

The turnover in Unilever stock stood at just about 81,120 million shares in the nine months period of the current calendar year (Jan-Sept) against the company’s issued and paid-up shares of 13.3 million.

On June 30, the Unilever Pakistan reserves amounted to Rs1,746 million and total equity at Rs2,415 million. The balance sheet footing was Rs11 billion.

 

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Pakistan needs $10-15 billion urgently, says Tareen​

* Economic adviser says circumstances make routine meeting ‘extraordinary’
* Pakistan must correct imbalance in 24 months​

ISLAMABAD: Pakistan requires $10 billion to $15 billion of support from foreign lenders to avert a balance of payment crisis, Economic Adviser Shaukat Tareen said on Tuesday, as talks between Pakistani and International Monetary Fund (IMF) officials began in Dubai.

“In 24 months, we must correct the imbalance we have created,” Tareen told Dawn News television. “Immediately we don’t need more than $10-15 billion.”

The ongoing meeting with the IMF is an annual economic health check-up, which all IMF members have to go through. “It is not an extraordinary meeting but, yes, the circumstances have made it so,” Tareen told AFP.

“We’ll discuss with the IMF the present economic and financial situation we are facing,” he said.

Inflation in Pakistan is running close to 25 percent, the budget deficit is unsustainable, government borrowing from the central bank has squeezed liquidity in the banking system, and the international bond market fears a debt default.

“The talks that are now taking place will ensure that the Fund can act quickly should there come a request from the Pakistani authorities,” said an AP source in Dubai with knowledge of the discussions underway.

Consultations with the IMF are taking place in the Gulf because of security concerns, and are likely to continue for days.

Last month, an IMF team left Islamabad in a hurry after a suicide bomber killed 55 people and destroyed the Marriott Hotel.

The government has been trying to get IMF endorsement for its economic strategies in order to persuade other multilateral lenders and friendly countries to come to its rescue. But it does not want to take IMF money unless they were out of options.

Potential donor governments are also scheduled to meet in Abu Dhabi next month, but Tareen stressed the urgency of Pakistan’s situation last Saturday by saying Pakistan needed action in 30 days.

Analysts say Islamabad needs up to $3 billion to $4 billion urgently to stabilise the economy, although the total financing gap for the balance of payments was projected at around $7 billion for the fiscal year ending June 30, 2009.

Falling oil prices have helped, but there will be another hefty financing gap in fiscal 2010 to cover. agencies

 

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Non-textile exports up by 51 percent​

KARACHI: The export of non-textile products increased by 51.3 percent to $2.53 billion during the first quarter of the current fiscal year against $1.694 billion in corresponding period last fiscal.

This surge in export can be attributed to substantial growth seen in the export of food group.

The current fiscal year began with the handsome growth in the export of goods other than textile, whose exports have continuously showing a declining trend amidst power shortages and fierce competition from China, India and Bangladesh. Textile sector miserably failed to record any growth in its export and remained flat during the period under review.

During the first quarter non-textile products posted impressive growth with an unprecedented increase in rice export, which led the boom in the export of non-textile products.

The export of traditional products, like rice, sports goods, leather products, footwear, surgical and engineering goods rose despite the fact that the input cost of such products witnessed a substantial increase during the period under review.

During July-September period, export of food group was up 71.69 percent. In this group, the export surged by 139.24 percent – basmti by 74.31 percent and other varieties by 352.10 percent.

“Pakistan benefited tremendously by the restrictions placed by India, Vietnam and Thailand on rice export due to shortage of staple food in their respective countries,” analysts and exporters citing the reasons for the export growth in rice said.

The export of fish products was up by 2.79 percent, fruit 2.03 percent, sugar 100 percent and meat 43.85 percent.

Export of petroleum products increased by 13.64 percent during the quarter under review, sports goods 7.68 percent, leather products 6.56 percent, footwear 23.42 percent, surgical goods and medical instruments 18.57 percent, cement 78.19 percent, molasses 291.25 percent and gur 17.55 percent during July-September of this fiscal.

Analysts pointed out that despite the poor performance of textile products, the growth in export volume depicts the diversification in the export base of the country. “This is urgently needed to enhance the export base because the tough competition faced by textile exports as well as capacity constraints of the sector are hampering its ability to post any substantial growth in export,” they said.

“The export of other products managed to make-up the losses suffered by the shortfall in export of textile products. The traditional products are fetching the much-needed foreign exchange reserves for the country at this critical time”, they said.

 

[dr.umer]

Pakistan to seek world counter-terrorism support at Asia-Europe summit ​

BEIJING, Oct 23 (APP): Pakistan will seek extensive support for war on terror and cooperation to meet its growing energy demand at the 45-member Asia-Europe (ASEM) summit to be held here Friday. The present democratically elected government attaches great importance to this apex forum as it is for the first time that Pakistan is taking part at the summit since it joined the group in 2006, with Prime Minister Syed Yousuf Raza Gilani to lead his country.

This was stated by a senior Pakistani official here Thursday while briefing newsmen on the summit.

The Prime Minister will address the plenary session of the international forum and is likely to highlight his country’s fundamental position on key issues, facing the region.

The leaders at the summit may discuss wide-ranging matters of common concern like global financial crisis and socio-economic disparities. It will be the highest-level interaction of Prime Minister Gilani with key political and economic regional and international players. According to the sources, Pakistan and China may take a similar position on the global issues, especially war on terror. Pakistan has already endorsed the theme of the seventh summit of ASEM, i.e. “Vision and action towards a win-win situation”. The first plenary session of the summit, to be addressed by the Prime Minster will focus on International Economic and Financial situation.

Pakistan’s admission to ASEM as its formal member is an acknowledgment of the important role it is playing in the international arena.

It is also a manifest of recognition by the international community of Pakistan’s vital geo-strategic position and its ability to contribute towards ASEM process. “Pakistan is ready and committed to playing a most useful role in furthering the ASEM process,” the sources added.

“I expect a lot of interactions with all the world leaders. And there would be an opportunity to discuss with them our basic problem, that is about extremism and terrorism in the country,” Prime Minister Gilani said in an interview on the eve of his trip to Beijing.

Gilani said Pakistan, being strategically in the front-line of the anti-terror war, has suffered a lot from its fight against terrorism and extremism and wished to have a joint strategy to promote peace and security.

“We want to ensure a better life for our people by availing all available resources with the support of our foreign friends, especially China,” he added.

Delegates to this summit are to discuss global economic and social development as well as the current financial crisis, and make future action plans, Foreign Minister Yang Jiechi said.

Yang told newsmen that the summit would focus on the world economic and financial situation, and global issues such as food security and disaster relief cooperation, and sustainable development.

Leaders from Asian and European countries would communicate and coordinate on the issues, deliver documents and pragmatic cooperation proposals, and make action plans for the next stage, Yang said.

As usual, the summit would issue a chairman’s statement, expounding the stances of Asia and Europe on major international and regional issues.

“This summit is an important international meeting set against special global conditions.

The world financial crisis is getting worse. Global issues such as energy, climate change and food security interweave, and the international community is facing serious challenges,” Yang said.

Several state leaders are coming to China for ASEM7, including Prime Minister Gilani, Indian Prime Minister Manmohan Singh, German Chancellor Angela Merkel, Dutch Prime Minister Jan Peter Balkenende, Slovenia President Danilo Turk, Danish Prime Minister Anders Fogh Rasmussen, Polish Prime Minister Donald Tusk, Singaporean Prime Minister Lee Hsien Loong, and Vietnamese Prime Minister Nguyen Tan Dung, Foreign Ministry spokesman Qin Gang announced yesterday.