Pakistan Economy - News & Updates - Archive

[dr.umer]

$100 billion FDI in pipeline, says BOI Chief ​

7 Nov 2008

Chairman, Board of Investment (BoI) Saleem H Mandviwalla has informed business community that an Italian firm has agreed to make 100 million dollar investment in marble sector in Pakistan. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI) on Thursday, dispelling the impression that local and foreign investors are not making investment in the country.

He said that besides Italian company Fiat company, Nacellay, Palmar and other companies have shown their interest in making investment in Pakistan. Mandviwalla hoped that agreement with these companies would be signed soon. He noted that Pakistan have already signed 114 investment MoUs with China which are inactive. These MoUs will be activated, he assured.

The chairman said that representatives of chamber would be included on the board of directors of BoI. Replying to a question about high mark-up rates, he said that Pakistan is not interested to go to IMF, as their terms are very tight and requires many things to do, which are not in interest of the country.

Replying another question about electricity problem, he held previous governments responsible for this crisis. There is no quick solution of the problem, he added. However the government is aware of the issue and taking many steps to redress problems as soon as possible, he maintained.

Replying to another question regarding sales tax refund and audit, he assured that he will take-up the issue with Chairman Federal Board of Revenue (FBR).

He said that the BoI would soon inject new blood in revamping its Karachi and Lahore officers. Replying a question about honorary consuls general of Pakistan working in different countries, he said that BoI is constantly monitoring performance of honorary consuls general and replacing those whose performance remained un-satisfactory On issue of ban on manufacturing polyethylene bags blow 300 micron, he assured that he will take-up the issue with City Nazim.

Acting President KCCI, Jawed Bilwani pointed out that most of Pakistani commercial counsellors posted abroad, unfortunately did not make the hectic effort for boosting and enhancing of image as well as exports of Pakistani products.

 

[dr.umer]

Exhibition of Pakistani goods inaugurated in Tokyo ​

November 07, 2008

ISLAMABAD: There is great potential of non-traditional Pakistani export items in Japan and the embassy will extend all possible support to the exporters in marketing these goods, says a message received here on Thursday by Pakistan embassy in Tokyo.

Inaugurating a five-day exhibition of Pakistani goods in Jica global plaza Tokyo, Pakistan's Charge d'affaires, Imtiaz Ahmad appreciated the Pakistan Chamber of Commerce for holding a successful event. He also thanked Japan International Co-operation Agency (Jica) for hosting the exhibition.

Chief guest Kenji Kondo, director general, Ministry of Industries and Commerce, Japan assured his full support in promoting export of Pakistani goods. I had served in the Japanese embassy in Islamabad as a first secretary, Kondo recalled his fond memories of his stay and said that Pakistan is like his second home. He offered his co-operation to the members of the Pakistan Chamber of Commerce in Japan.

The Pakistan Chamber of Commerce Japan has organised the exhibition in collaboration with the Embassy of Pakistan and the Japan International Co-operation Agency. A number of Japan-based as well as Pakistan-based exporters participated in the exhibition, says the message.

Commercial secretary, Rahman Hamid, president of the Chamber, Zulfiqar Ali, secretary general of the Chamber, Malik Habibur Rehman, member executive committee of the Lahore Chamber of Commerce, Muhammad Riaz, and an active member of the Pakistani community, Abdul Rehman Siddiqui also addressed the gathering.

 

[dr.umer]

Heavy agenda and financial constraints mar Ecnec meeting ​

7 Nov 2008

ISLAMABAD - The meeting of Executive Committee of the National Economic Council (Ecnec) that was to approve 42 developmental projects worth Rs 311.53 billion for various sectors ended up without completing its business. Sources said that only half of the projects on agenda could be taken up during the daylong meeting and it was not clear when exactly the next meeting would be held to take up rest of the agenda.

When contacted an official said that the next meeting of Ecnec might be convened on Saturday or next week for taking up rest of the projects but the date was not yet fixed. Though the heavy agenda was the official excuse for the inconclusive Ecnec meeting, but such meetings with even heavier agendas were completed within one day in the past.

The actual reason for delay in approving projects on the agenda might have been differences between federal and provincial authorities and the looming financial constraints faced by the country. The provinces, according to the sources, have protested non-release of funds for the important ongoing development projects.

The government, which is facing severe financial constraints, wanted a substantial cut on the Rs 541 billion Public Sector Development Projects (PSDP) size and had directed the Ministries and Division to prioritise the important projects because the prevailing financial troubles were not permitting the release of PSDP allocation set in the budget.

The representatives of the provincial governments told the meeting that there is a need to prioritise the ongoing development projects instead of approving new ones amid financial difficulties. They said that most of the projects being executed in the provinces are getting delayed due to lack of funds. The finance ministry is not releasing funds to the projects which are of paramount national importance.

The Ecnec, which met with Prime Minister in the chair, was expected to approve projects including Diamer-Bhasha Dam - acquisition of land and resettlement project worth Rs 116.607 billion in water and power sector.

The meeting was to take up 16 projects of Transport and Communication sector worth Rs 47.365 billion, five projects of Water Resources of Rs 32.921 billion, three projects of energy worth Rs 118.701 billion, two projects of health sector worth Rs 27.191 billion, two projects of environment worth Rs 2.232 billion, two projects of devolution and area development worth Rs 5.672 billion, one project of education sector with Rs 657.631 million, two projects of Higher Education (HEC) 2.006 billion, one project of social sector of Rs 560 million, one project of cultural Sports and Tourism of Rs 2.519 billion and one project of Industry and Commerce worth Rs 1.985 billion. The six projects of Physical Planning and Housing with the cost of Rs 70.618 billion were also on the agenda.

 

[dr.umer]

Pakistan, India to take up basmati issue​

November 07, 2008

ISLAMABAD: Pakistan and India have decided to hold talks to settle issues pertaining to joint registration of basmati rice under Geographical Indication (GI).

A joint working group of both sides would deliberate on the issue in a meeting here on Nov 7-8, official sources told The News on Thursday.

Both Islamabad and New Delhi had agreed during the process of composite dialogue in June 2006 to set up a joint working group for looking into various aspects of joint registration of basmati. The working group, in its first meeting in New Delhi in April, had agreed to iron out differences over the issue.

“European Union has said it will not accept basmati registration separately and consider it as a product of both Pakistan and India,” an official who is part of the negotiating team of Pakistan said.

Under the World Trade Organisation’s Geographical Indication law, property rights will be given to a member country where any product or item is produced or manufactured traditionally. No other country can claim rights over such products.

“India had included basmati in its list of exportable commodities in May 2006 but 80 per cent of basmati exported to EU and Gulf markets was not original,” an official dealing with trade-related intellectual property (TRIP) laws in the commerce ministry commented on the issue.

On the other hand, Pakistan has notified DNA testing of super basmati, which proves that its characteristics match with the variety already notified in the Gazette of Pakistan on January 1, 1998.

The dispute between India and Pakistan over registration of basmati rice erupted when Delhi claimed developing a ‘super’ variety in Kharif 2003 season under the Exports Inspection Certification Act.

After the Indian claim, sources said, Pakistan decided to carry out DNA test of the variety at National Institute for Biotechnology and Genetic Engineering (NIBGE), Faisalabad, which matched the characteristics of the variety already registered under Seed Act 1976 on January 1, 1998.

Super basmati is originally grown in Pakistan as a cross between traditional pure basmati and modern dwarf rice. Super basmati has always had an edge over Indian Pusa Basmati-1 in international markets. Pakistan fears if India starts exporting the same rice, it could lose up to 40 per cent of its world market.

Super basmati is globally recognised as Pakistan’s rice and is very well accepted with exports of over 800,000 tons. It has a high yield and earns a lot due to its superior quality. According to an estimate, annual rice exports from India and Pakistan fetch around $2.5 billion.

 

[dr.umer]

Economic downturn takes toll on property rates​

7 Nov 2008

LAHORE: Real estate rates are under pressure, as entrepreneurs are trying to offload their assets to remain afloat or convert the assets into dollars.

The News has found that almost all industrial sectors are incurring losses, as they are unable to recover their cost due to high interest rates, inflation and plunging sales. These factors have made it impossible for industries to service their loans.

It has been found that most industries first tried to slash their inventories by selling them at discounted rates to overcome cash crunch and pay loan instalments.

After exhausting this option, some of the manufacturers preferred to delay payment of bank dues while some disposed of their property to repay their bank loans on time.

It has been found that the industries that have been regularly rescheduling their loans in the past preferred to delay bank payments as their asset values were less than their loan amount. They know that banks would ultimately approach them for rescheduling loans again instead of going into litigation.

However most of those manufacturers that have never defaulted in the past nor they availed any rescheduling opportunity preferred to dispose off their property and pay banks on time.

They have a reason to do so. They have built up assets by remaining update on their loans. They run the most efficient industries in their sector that has saved them from minor economic downturns in the past.

The current economic decline is beyond their capability as the cost of production has risen taking the costs beyond the reach of the consumers. The rates of real estate have declined by 30-40 per cent during last 10 months as large numbers of entrepreneurs are offering their high valued property for sale. The decline in rupee value during past two months has accelerated this process.

The pressure on property further intensified as businessmen saw huge risk to their capital because of massive devaluation of rupee. They are also disposing of their assets in rush. They are transferring capital abroad to save themselves from the decline in their asset value. The Advisor to the Prime Minister on Finance has admitted that billions of dollars have been transferred abroad in recent months.

It was found that stock market players also had bought big properties from the wealth they accumulated during the good days in the stock market. Some of them had already cashed the assets and parked money in dollar accounts while many are contemplating disposing their properties to settle their accounts with the bourses when the lower floor cap on the market is removed.

After shock in capital market they do not consider property as a safe avenue. Most want to get rid of the property and convert it in to foreign currency.

It was found that property rates have declined more sharply in the posh localities where most of the industrialist elite and capital market investors had accumulated large properties. The decline in middle class housing schemes is half decline witnessed in posh residential colonies.

 

[dr.umer]

Govt blocks floating of $4bn GDRs, bonds​

7 Nov 2008

*Ishaq Dar says PPP govt got confused and shelved plans*​

ISLAMABAD: Despite presenting a plan before the federal cabinet, the PPP-led government has been unable to push ahead with $4 billion transactions related to issuance of Global Depository Receipts (GDRs) and exchangeable bonds of Oil and Gas Development Company. This has forced the country to discuss a bailout package with International Monetary Fund, it is learnt.

Earlier, the government stopped GDRs of National Bank of Pakistan, Kot Addu Power Co (KAPCO), sale of 15 per cent shares in Habib Bank and 10 per cent exchangeable bonds of OGDC, arguing that these institutions are silver assets and they would not be sold. However, within six months, the government has taken U-turn and is ready to sell Qadirpur gas field, sources said.

“The government blocked $4 billion worth of transactions without giving authorities concerned any alternative option for generating dollar inflows,” a source said and pointed out the situation in the international market was not so bad during April compared to present difficult conditions in the aftermath of financial turmoil afflicting many economies of the developed world.

“We missed an opportunity and are now forced to pick up begging bowl for dollar inflows from the IMF programme at the cost of national sovereignty,” the source added.

Talking to The News on phone, former finance minister and PML-N leader Ishaq Dar disclosed that he had placed a viable plan to generate $4 billion before June 30 keeping in view the difficulties faced by the country on the external front. “Out of these $4 billion, Islamabad received $400 million from the US on account of disbursements made to Pakistan Army for its ongoing operation in FATA,” he said.

But, according to him, “PPP got confused and its leadership decided to shelve other plans such as issuance of GDRs and exchangeable bonds in order to avoid shattering of confidence that actually resulted in creating more difficult situation for economy.”

Referring to his recent speech delivered in the Senate while discussing the issue of national economy, he said that the increase in interest rates on the demand of the IMF would be simply a disaster for the economy of this country.

He also criticized the government policy for raising the support price of wheat saying that if the government wanted to give international prices to food commodity then it should also increase per capita income of people of Pakistan in accordance with international standards. “It is time for prayer but we should also do right things to place economy on the right track,” he concluded.

The sources in Finance Ministry said that the former finance minister had tabled a plan during the cabinet meeting on April9, 2008 for generating $4 billion before June 30, 2008. When the PML (N) decided to quit the government on the issue of restoration of judges, the PPP government blocked $4 billion transactions on the directives of President Zardari.

“Even at that time, the Finance Ministry had given mandate to JP Morgan, ABN Amro Bank (now RBS) and Barclays Bank and kick-off were convened on April 22 and 23, 2008,” the sources recalled.

The delay in issuance of GDR of NBP, KEPCO, 10 per cent exchangeable bond of OGDC and offloading of 15 per cent share of HBL resulted into creating panic in the market and forced the government to discuss bailout package with the IMF in order to get $4 billion as first tranche of expected Standby Arrangement (SBA) within this month.

Pakistan’s beleaguered state of the economy worsened further with the decline in its foreign exchange reserves. According to State Bank of Pakistan country’s foreign exchange reserves declined to $6.6 billion. The depleting foreign exchange reserves has been playing a critical role in economic collapse a it led to a 26 per cent depreciation in the value of national currency against US dollar over the last 8 months.

When Secretary Finance, Dr Waqar Masood was contacted for seeking official comments on it, he said that the Standard & Poor raised the issue soon after announcement of the 2007-08 budget that the fiscal side would remain quite weaker in this scenario.

He said that when the incumbent regime took over reigns of power at that time three quarters (July-March) had already passed. He said that the fiscal side had gone out of control before assuming power by the incumbent regime and fiscal deficit was much higher than initial estimates made by the previous government

Owing to weakening fiscal side, he said the spread had gone over 600 basis points and the international market was not ripe to enter into it with new transactions.

At that time, there were two views and one of them was to stop these transactions because it could be hasty borrowing, which would not provide benefit to the country’s economy.

 

[dr.umer]

KSE: investors stay on sidelines​

7 Nov 2008

KARACHI : Trading activity at the local share market remained dull due to prevailing uncertainty over the floor issue, which kept the investors on the sidelines and the benchmark KSE-100 index ended unchanged at 9,183.14 points. The investors' lack of interest was evident as the ready market volume declined to 236,700 shares as compared to 622,200 shares traded a day earlier while no trading was witnessed at the futures counter.

The overall market capitalisation declined by Rs 91 million to Rs 2,829.614 billion. Trading took place in only 23 scrips, of which four closed in positive, eight in negative while the value of 11 scrips remained unchanged. Al-Zamin Leasing was the overall market volume leader of the day with 115,500 shares, however, it declined by Re. 0.05 to close at Rs 1.95. National Assets closed at Re. 0.41, up by Re. 0.01 with 39,000 shares.

Sitara Energy lost Re. 0.29 to close at Rs 20.76 with 21,500 shares. U.D.L. Modaraba closed at Rs 3.30, down by Re. 0.01 with 10,500 shares. Nimir Resins closed at Rs 5.05 without any change with 10,000 shares. Mukhtar Textile remained unchanged at Re. 0.53 with 10,000 shares.

Gharibwal Cement lost Re. 0.51 to close at Rs 17.08 with 6,000 shares. KESC remained unchanged at Rs 3.80 with 5,000 shares. Mohammad Farooq lost Re. 0.23 to close at Rs 2.01 with 3,500 shares. Dewan Auto Engg remained unchanged at Rs 1.45 with 3,500 shares.

AzgN and Tri-Star Power were the highest gainers and gained Re. 1.00 and Re. 0.21 to close at Rs 9.75 and Rs 1.85 respectively while Pak Datacom and Gharibwal Cement were the worst losers and lost Re 1.00 and Re. 0.51 to close at Rs 49.00 and Rs 17.08 respectively.

Ahsan Mehanti at Shehzad Chamdia Securities said that trading activity remained low on prevailing negative sentiment following SBP's announcement to raise yields on T-Bills auctions, indicating possible discount rate hike. Members default expectations, falling foreign exchange reserves, no announcement of Saudi oil facility on deferred payments, foreign selling in the market were major concerns, which kept the market participants on the sidelines, he added.

 

[sunny_aus]

Good question!
I recall the situation after May '98 when Pakistan was facing another and more severe economic malaise Saudi's granted soft loans and supplied oil on deferred payments for more than a year. The loan and differed payments were written off.

Same might happen again if we play the cards right.

Even if Pakistan will have to pay back a part of this loan and of deferred oil facility, it’s clear that Saudi Arabia alone has solved the problem almost “completely”. this $4bn is even more than the immediate dept liabilities and on the other hand Pakistan will get relief of about $8bn to $10bn for oil import over next one year which is well enough to adjust the decline in foreign reserve. also, supports from US and other countries for war against terrorism is going to make Pakistan fully comfortable on trade side

 

[Neo]

Foreign exhibitors get $50m orders ​

Friday, November 07, 2008

KARACHI: Foreign exhibitors have expressed satisfaction over the business generated both in terms of quality and quantity, totaling more than $50 million during the three-day automobiles and auto parts exhibition held at the Karachi Expo Centre.

Local businessmen and industrialists also found the Machine Tool Exhibition extremely useful and identified new technologies that can and will be put to good use in the food and textile sectors of the country.

The 4th International Automobile, Auto Parts and Accessories Exhibition (AAPP 2008) and 4th International Machine Tools and Automation Industry Exhibition (MTAP 2008) held simultaneously at the Karachi Expo Centre concluded on Thursday.

Belgian Consul Emmanuel Rixhon was very appreciative of the fact that such a large show was held despite the economic challenges being faced by the country. He was hopeful that such shows will play an important role in bringing about a much-needed economic turnaround.

Rixhon informed that the Belgium Embassy had played an important role in attracting representatives from Belgian companies to the exhibition. “Interaction between representatives of local manufacturers and their Belgian counterparts will prove invaluable in forging technical partnerships,” he said.

Trade Commissioner of Italian Embassy, Marco Pintus was pleased at the presence of Italian companies and products at the show.

He commended the organisers for putting up an exhibition that will go a long way in boosting trade ties between Italy and Pakistan.

The Taiwanese exhibitors also shared that they were happy that they came to Pakistan and attended the event as they found Karachi to be not only safe and secure but also completely opposite to the image that is always being projected by the international media.

4th AAPP 2008 and 4th MTAP 2008 played host to more than 200 companies from 20 countries including USA, UK, Taiwan, China, India and Thailand.

 

[Neo]

Trade surplus with Afghanistan up $213m in FY08 ​

Friday, November 07, 2008

ISLAMABAD: Trade balance of Pakistan with Afghanistan registered a surplus of $213 million in 2007-08 compared to a year earlier.

Exports, which had slipped below $1 billion and were $753 million, once again surpassed the billion-dollar mark and touched $1.14 billion during 2007-08 whereas imports from Afghanistan were $76 million in 2006-07 and jumped to $91 million in 2007-08.

The trade balance, which was $677 million in 2006-07, is now $890 million and Afghanistan is the only regional country where Pakistan has a surplus trade. Pakistan’s trade with land locked Afghanistan has registered a double-digit growth besides over a billion dollar illegal trade.

The exports registered only a growth of 23 per cent while imports of limited list from war torn country showed a growth of 16 percent, reveals official trade figures.

Imported items from Afghanistan showing a phenomenal growth are iron ore and fruits while exports to Afghanistan are petroleum, animal and vegetable fats & oil, machinery parts, iron and steal manufactured, cement, rice and sugar (raw & refined).

Trade balance between Pakistan and Afghanistan was $280 million, $445 million, $708 million and $ 1.01 billion in 2002-03, 2003-04, 2004-05 and 2005-06 respectively.

 

[Neo]

Rs 400 bn debt caused power crisis: Raja Pervez ​

Friday, November 07, 2008

ISLAMABAD: Water and Power Minister Raja Pervez Ashraf has said all efforts are being made to overcome the energy crisis.

The minister, while giving assurance to the Senate Standing Committee on Water and Power, said keeping in view the situation, the government was bringing in rental power generation units and maximising generation from the Independent Power Producers (IPPs) to augment the existing supply.

He said a debt of Rs 400 billion had created problems for the power generation sector out of which Rs 260 billion were receivables of the eight power companies while Rs 140 billion had to be paid to the oil companies.

The power generation companies had no money to pay to the oil companies due to which the situation went from bad to worse, he added.The minister said low discharges from Tarbela and Mangla dams due to preservation of water for the Rabi crops was another problem due to which the power generation suffered.

He said that provision of gas to the power generation companies had been placed on top priority. The Senate body thoroughly discussed the issue of load-shedding and energy crisis in the country and future plans of power generation drawn by the Water and Power Ministry.

The committee underlined the need for chalking out emergency plans to increase power generation capacity to meet the growing demands of electricity in the country and overcome the energy crisis, which the country is facing at present.

Members of the committee were of the view that a proactive approach was required to address the issue on both short- and long-term basis. The committee directed the ministry to expedite work on power generation units being installed in different parts of the country. It was also decided that it would visit Quetta and see progress on the Sheikh Manda power generation unit.

The committee assured all support to the ministry in overcoming various problems being faced with regard to increasing the power generation capacity and bottlenecks in plans chalked out by the ministry to address the ‘important issue’.

The meeting was attended by Senator Muhammad Amjad Abbas, Ms Agha Pari Gul, Abdul Razak A Thahim, Maulana Rahat Hussain, Maulana Gul Naseeb, Raza Muhammad Raza and Dr Javed Laghari, besides the minister for water and power and senior officials of the ministry.

 

[Neo]

Steel Mills privatisation plan scrapped: minister​

ISLAMABAD, Nov 6: Federal Minister for Industries and Production Mian Manzoor Ahmad Wattoo said on Thursday that the capacity of Pakistan Steel Mills would be raised to 3.3 million tons from the current 1.1 million tons over the next three years.

“This expansion may reach 10 million tons in the next few years to meet the rising demand of steel in the county,” the minister told a press conference. He said that the privatisation of the Pakistan Steel Mills (PSM) had been put into cold storage.

“We will not allow the privatisation of the PSM. It is our national entity and it will remain in the public sector,” he said.

In reply to a question about dependence on foreign sources for raw materials, the minister said the government was considering various options to purchase raw materials from Balochistan and the NWFP. Annually, the PSM spent around Rs25 billion on imports of raw materials, he added.

He said money would be given to these provinces to start development programmes including opening of new schools and hospitals.

Mr Wattoo also announced formulation of a national industrial policy to attract foreign investment. He did not give details of the proposed policy. He said around $2 billion investment was expected in the petrochemical industries, adding that all formalities had already been finalised.

He admitted that the industrial sector had been facing severe pressure because of rising input cost and fallout of global financial meltdown.

Asked why the government was not taking action against a steady increase in the sugar price, the minister replied that government would import raw sugar to convert it into white. However, he did not mention that the government’s decision to allow massive exports of sugar was responsible for the shortage.Mr Wattoo said that during the past five months, the government had established 1,500 utility stores across the country. These new stores also provided employment to 3,500 people.

After negotiations with oil and ghee industries, the minister said, the consumer price of ghee/ oil had been brought down to Rs98 per kg from Rs140 recently.

He said quality and quantity display system had been introduced in these stores to address these issues, adding that the government would also establish these stores on the pattern of multinational stores chain. “We have already sought the help of LUMS in this regard.”

He said urea supply would improve in the next few weeks. He said that cement prices had increased because of export to neighbouring countries.

 

[Neo]

Future of coal-based power projects: World Bank team trying to resolve Sindh-Centre rift​

KARACHI: The World Bank is trying to resolve the prolonged rift between the Sindh government and the federal government over the authority of large coal deposits in the country.

Officials in the Sindh Mines and Mineral Department told Daily Times on Thursday a WB team had arrived here six days back and were actively engaged in discussions with the officials of provincial and federal governments.

They said that the delegation’s priority was to resolve the rift between the two governments and help out the provincial government in selection of a firm, which would provide technical assistance in developing the world’s fourth largest coal deposits’ land at Thar.

The officials said that key decisions regarding developing coal sites in Sindh were expected, which would remove impediments in the way.

The WB has pledged to provide $26 million funds to the selected foreign firm in Sindh that would carry out technical assistance to all coal-based power projects in the future.

Presently, there are four companies including two from Germany and one each from the United Kingdom and China that have keen interest to conduct this project but eventually the government would have to select one of them.

During the recent exercise, the WB officials held meetings with officials of Federal Ministry of Petroleum and Natural Resources and Sindh Mines and Mineral Department. Officials of other possible stakeholders that would be a part of the coal-based projects such as WAPDA, IPPs are scheduled to meet by international funding agency to streamline the track of understanding among them.

It has been observed that the two governments are at loggerheads on the future earnings to be generated through coal reserves. One by one, several authorities had been established in the past that ensured the interest of the two governments.

In the recent past the Asian Development Bank has conducted a study on Thar coal, which identified that the rift between the two governments was a major impediment in materialising Thar coal.

Sources in the Sindh Coal Authority (SCA) told Daily Times that the WB officials are conducting negotiations between the two governments keeping in view their rights of natural resources that is defined by constitution of the country.

The provincial government claims that it has the right to take all measures on its mineral reserves with full autonomy so all the revenue generation should be go in its kitty. On the other hand, the federal government had kept on intervening in all coal issues as it has been working by its ministry.

Finally, the government has formed Thar Coal Authority some three-month ago keeping the interest of both the governments. The CM Sindh is the chairman and managing director belongs to the federal government.

This authority is formed aimed at ensuring the long-term friendly settlement between the governments.

Earlier, the previous government had formed Thar Coal Mining Company (TCMC) to bridge the widening row between the two governments, which the federal government has shelved.

All action plans proposed by TCMC have been rejected categorically by federal governments as they could not create any weight, it is also learnt.

 

[Neo]

Reserves down by $163 million ​

KARACHI: Pakistan’s foreign exchange reserves dropped to $6.758 billion on November 1, down by about $163 million or 2.35 percent from $6.921 billion the country held during the previous week, State Bank said on Thursday. Foreign reserves held by the State Bank of Pakistan stood at $3.529 billion, down by over $184 million or 4.95 percent from $3.713 billion the previous week. Net foreign reserves held by banks other than SBP stood at $3.228 billion, gaining $20 million or 0.62 percent from $3.208 billion.

Historically high trade and current account deficits have eaten away the foreign exchange reserves by more than half during last one year, as the central bank had to spend dollars to protect the rupee from extreme volatility. Since the beginning of the current calendar year, the central bank has been intervening in the foreign exchange market quite frequently to support the rupee, which sharply lost its value against the dollar. Besides, the central bank has to give dollars to banks for their customers’ oil import payments. Whereas this support extended to rupee resulted in sharp depletion of foreign exchange reserves, it did not succeed in stopping the rupee’s slide. The rupee has lost about 32 percent of its value against the greenback since January.

 

[Neo]

WB operations’ summary: WB’s projects worth $1.46 billion still on list​

ISLAMABAD: Despite removal of projects worth $379 million from World Bank’s Pakistan country operations, projects amounting to $1.468 billion are still on its list of operations. The WB continues to keep on hold $300 million project of National Trade Corridor Improvement Programme (NTCIP) in November.

According to the WB’s monthly operational summary for the month of November 2008, 10 projects that are still in the WB’s country operations’ list include, the Education sector, Higher Education Support Programme project worth $100 million is for providing support to the government of Pakistan’s higher education medium term development framework to foster public private partnership in the delivery of higher education and to provide substantial technical support to the client in developing a reasonable financing plan consistent with the macro-framework of the country.

Mineral Section: In the energy and mining sector, the project of Mineral Sector Technical Assistance worth $50 million is to implement a strategy to accelerate the sustainable mineral sector development by strengthening governance, transparency, and capacity in the management of mineral resources.

Rural Telecommunication: In the area of information and communication project, Rural Telecommunications and e-Service worth $124 million is for (a) accelerating access to communications in un-served and underserved areas by using targeted subsidies for rural expansion, (b) strengthen legal, policy, regulatory and spectrum management and (c) monitor functions and expansion of e-services. Negotiations are scheduled for December 2008.

Law and Justice: Law and Justice project, Second Sindh Structural Adjustment worth $100 million is for implementation of reforms to improve fiscal and financial management, governance, public service delivery, and the state’s regulatory framework.

Social Protection: The project Support to Safety Nets worth $50 million is for supporting the effective strengthening of implementation and monitoring mechanisms for delivery of cash transfer programmes.

Transportation: The project Trade and Transport Facilitation II worth $24 million is to facilitate the implementation of the NTCIP, and facilitate the simplification and modernisation of Pakistan’s international trade procedures and practices. The meeting is scheduled for 4 December 2008.

Expressways: The project National Expressways worth $500 million is for improving trade flows, lower transit costs and times along the programme corridor through the sustainable delivery of a high-speed, safe and reliable access-controlled expressway system. Appraisal is scheduled for January 12, 2009. However, project NTCIP worth $300 million would remain in the pending till the improvement of the macro-economic situation.

Urban Development: The project Punjab Large Cities Development Policy worth $100 million is to promote economic growth in the major cities through strategic planning, integrated infrastructure investments, and efficient urban service delivery. World Bank appraisal is scheduled for late-October 2008.

Water and Sanitation: The project Second Punjab Barrages Rehabilitation and Modernisation worth $120 million is for preventing the occurrence of disastrous barrages failure and ensure their sustainable use, providing improved and reliable irrigation and drinking water supplies. The meeting is scheduled for June 1, 2009.