Pakistan Economy - News & Updates - Archive

[Neo]

Friends of Pakistan: much ado but no cash injections​

EDITORIAL (November 20 2008): A press release issued by the Foreign Office asserts that the Friends of Pakistan meeting held in Abu Dhabi adopted a work plan that envisages greater co-operation in the fields of security, energy, development and institution building - areas where Pakistan needs support.

The outcome of the Friends of Pakistan meeting was the scheduling of additional meetings, the next one from 13 to 16 January 2009, with the participation of 'experts' in each of these areas, which would lead to building of strategic partnerships. However, the Press release was ominously silent on what Pakistan needs the most urgently: financial injections to enable the government to shore up its fast depleting foreign exchange reserves, stabilise the balance of payments position as well as strengthen the declining rupee value.

To many this silence comes as no surprise. The reasons being cited for this are varied. Some believe that the Friends of Pakistan want to keep Pakistan on a tight leash in an effort to ensure that our government continues its commitment to the war on terror with little flexibility to undertake policies that are not supported by the international community.

Others argue that Pakistan must first go on an International Monetary Fund (IMF) programme which would force the government to set its house in order through adopting conditionalities that would have implications for improving governance as well as macroeconomic stability. The adoption of these conditionalities would, in turn, increase the comfort level of bilaterals with respect to how we utilise their assistance, which may follow later.

However it is relevant to note that there is a gestation period, estimated at between six months to a year, before these conditionalities begin to impact positively on the economy and increase our credit rating. Such reasoning would, therefore, imply that the government must not expect additional financing from Friends of Pakistan any time soon.

The substance of the IMF conditions was revealed by Shaukat Tarin, Special Advisor to the Prime Minister on Finance, in a television interview. First, fiscal deficit would have to be reduced from 7.4 percent during 2007-08 to 4.4 percent as envisaged in the budget, to be eventually brought down to 3 percent; however the 2008-09 budget document was vague on the actual source of revenue, and hence meeting the 4.4 percent deficit is likely to be a challenge requiring a mini budget by the end of the current calendar year that would, according to Tarin, increase taxes on agriculture, stock market, real estate and others.

The second IMF condition is to expand the revenue base from 5 to 15 percent, as per Tarin. With a decline in output in recent months - both farm as well as industrial output - it maybe difficult for the government to hasten with imposition of a new tax or raise existing taxes on the productive sectors. Tarin expressed optimism and stated categorically that the government would upgrade the farm sector and make it a profit earning. Again this would take time and in the interim period prices may well soar with the imposition of a tax on agriculture.

However, the government is considering privatisation as a means of meeting some of its expenditure requirements. According to informed sources, the plan is to generate around 5 billion dollars from privatising state-owned companies. Given today's global financial crisis, the government must put this policy on hold as it is unlikely to receive the amount that it would be able to once the crisis has blown over.

Third, the government would have to limit its borrowing from the State Bank of Pakistan, a policy that would reduce the pressure on prices. Deficit financing is a highly inflationary policy and it is hoped that the government restricts its use to what is absolutely necessary. And finally Tarin also stated that the IMF has urged the government not to make oil payments through the State Bank, which would assist in saving foreign exchange reserves and the rupee value is likely to strengthen without any intervention from the State Bank.

There is a need, therefore, for the government to accept that it is unlikely to access any additional financing in the short term at least. IMF and other international financial institutions are going to operate within our economy and impose a set of conditionalities that are unlikely to be pain-free and, unfortunately, experience shows that the poorer one is the more would be the impact of IMF conditionalities. This is in spite of the assurance by the IMF that it would ensure social protection to the poorest of the poor.

What the government should do is to ensure that belt tightening is across the board and non-development expenditure cuts must be more pronounced relative to development expenditure. Unfortunately this has not been visible in recent weeks, with numerous foreign junkets, by bureaucrats and some politicians, as well as the cabinet expansion.

 

[Neo]

Govt seeks investment in infrastructure, poverty alleviation​

Friday, November 21, 2008

ISLAMABAD: Senator Waqar Ahmad Khan, Minster for Investment has said that his Ministry would be focusing to enhance local and foreign investment in various sectors of economy to bring improvement in infrastructure, growth, poverty alleviation and achievement of millennium development goals of country (MDGs).

The Minister for Investment was talking to the H.E Anne .W. Patterson Ambassador of US, H.E Robert Edward Brinkley British High Commissioner and His Excellency Shin-un, Ambassador of Korea who called on him at his office in the Ministry of Investment.

Pakistan is the land of opportunities and offers tremendous potential for local and foreign investors in a host of areas like oil and gas exploration, coal and energy sector, said the Minister for Investment, Senator Waqar Ahmed Khan.

The Minister for Investment said that the mandate of his Ministry would be to play the role of facilitator and enhance the local and foreign investment in various sectors of economy to bridge the growing needs between demand and supply. He said that the govt. believes in level playing field for the local and foreign investors. The Minister said that the government will offer business friendly policies for the investors as well ensure the continuity of policies.

The Minister said that the Board of Investment is planning to organize an investment conference in Korea on Feb. 9, 2009 and would be largely attended by local and foreign investors. He said that it will help a great deal to Korean investors, to learn about the potential investment areas of Pakistan. The Minister appreciated the ongoing investments initiatives by the Korean companies.

The Minister also apprised the visiting Ambassadors that the govt. is considering establishing special economic zones in various parts of the country. He said that it would offer various incentives to the local and foreign investors and give a boost to business activities in the country.

The US and Korean Ambassadors also discussed the matters of bilateral interest regarding prospective investments by their countries. They congratulated the Minister on assuming the charge of the Ministry and assured the support of their countries.

 

[Neo]

Bahrain remains lucrative place for skilled Pakistani workforce: envoy ​

Friday, November 21, 2008

ISLAMABAD: Numerous employment opportunities exist for highly skilled Pakistani workforce in public as well as private sectors of Bahrain, said Ambassador of Bahrain to Pakistan, Mohamed Ebrahim Mohamed Abdulqader.

Talking to Chairman National Vocational & Technical Education Commission (NAVTEC), Adnan A Khwaja, who called on him here on Thursday, he said although the Pakistani workforce working in Bahrain was good in number but there was a scope for absorption of properly trained Pakistani manpower in various sectors, including construction, services, banking and health. He, however, said employment opportunities for skilled Pakistani women like doctors, nurses, bankers and the security women were comparatively higher.

He said many of the Pakistanis were enjoying a good status and reputation in his country in banking, police, intelligence and navy.

Ambassador Ebrahim assured Adnan Khwaja that the Bahrainís mission will fully cooperate with the NAVTEC for exploring more jobs for Pakistanis in Bahrain. On the occasion, Chairman NAVTEC said his organisation, under a comprehensive strategy, was producing highly skilled workforce through technical training courses.

In this connection, he referred to the establishment of eight Centres of Excellence in Pakistan with the technical assistance of the British Council and the JICA to help Pakistan in producing skilled manpower of international standards.

Khwaja told Ambassador Ebrahim that since its establishment in 2006, the NAVTEC had already trained 70,000 youth in various disciplines. ìWe have planned to train 100,000 more next year. We are confident that our newly trained workforce will be an asset for any organisation it will work for,î he added.

Welcoming the NAVTEC chairman’s forthcoming visit to Bahrain, Ebrahim assured him all possible help and support to make the visit fruitful and rewarding. He, however, suggested the chairman to fully involve the Pakistani mission in Bahrain for interaction with the country’s major employers for availing maximum job opportunities. Executive Director NAVTEC Muhammad Ather Tahir and Director General (Planning & Development) Muhammad Riaz Khan were also present.

 

[Neo]

Tough times for Pakistan, regardless of IMF ​

KARACHI: Pakistan faces more austerity whether or not its government keeps the promises made to the International Monetary Fund in return for a $7.6 billion bailout from a balance of payments crisis.

The cash-strapped country expects the first $3 to $4 billion tranche of the IMF loan, spread over 23 months, by the end of November, saving it from almost certain default on an international bond maturing in February.

Pakistan has entered several IMF programmes in the past, but the only one it completed was during the tenure of former army chief Pervez Musharraf, who retired in September, and the country has a reputation for falling short on commitments to the Fund.

“The IMF is a life-saving injection to a patient, but then you have to go into proper rehabilitation in order to regain health, so thats the analogy here,” said Asad Saeed, an economist.

“There can be no two ways about stabilisation in a situation where your external and fiscal deficits are completely out of sync”

The IMF’s patience is likely to be tried once again as the eight-month-old civilian government struggles to hold a firm policy line.

“The bottom line is that the IMF programme will be tested severely from the beginning as the economy continues to face unrelenting pressure from many directions,” Deutsche Bank economist Taimur Baig said in a note on Wednesday.

Enormous challenges: The coalition, led by President Asif Ali Zardari’s Pakistan People’s Party, has been at pains to say it went to the IMF on its own terms, even though the only alternative was to default.

The IMF, it says, backed policies for economic adjustment needed to correct unsustainable external and fiscal deficits that have put Pakistan on the verge of bankruptcy.

“Even with an IMF programme now finally announced, the challenges facing Pakistan beyond the 23-month term of the stand-by agreement (SBA), indeed, even beyond the next few months are enormous,” said David Fernandez, head of emerging Asia economic and sovereign research at JPMorgan in a note.

While IMF funding provides a short-term answer to Pakistan’s external debt problems, its balance of payments will remain stressed without serious structural reforms.

Pressures on its foreign currency reserves and on the rupee exchange rate will resurface by the end of the fiscal year next June if efforts are not made to bridge the trade gap, said Asad Farid, economist at AKD Securities Ltd.

If the IMF had its way interest rates would have gone up by far more than the 200 basis point hike in the central bank’s discount rate to 15 percent announced last week. Most analysts expect another rate hike of up to 200 basis points in January.

A panel of economists on Tuesday presented a stabilisation policies labelled “economic stabilisation with a human face” which was endorsed by Prime Minister Yousaf Gilani. The proposal includes a Rs 200 billion ($2.5 billion) spending cut, made up of a Rs 115 billion cut in current expenditure and a Rs 63 to Rs 100 billion reduction in development spending, according to economist Asad Saeed, who was on the panel.

Unpopular decisions: He said revenues would be increased by Rs 75 billion through duties on non-essential imports. The report projected gross domestic product growth at 4.4 percent for fiscal 2008-09 against the government’s target of 5.5 percent. The government has already taken unpopular decisions by removing subsidies on food and fuel, but it will have to go further by slashing spending, curtailing borrowing from the central bank, and cutting non-essential imports.

Government promises to reduce net borrowing from the central bank to zero may have looked good, but the IMF probably knows the target will be missed, analysts say.

Persuading a powerful army that defence, one of the top items on the budget, should also take a hit will be hard so long Islamist militancy and fears of Indian hegemony haunt generals.

The government knows it has to increase the tax to GDP ratio, which at 9.6 percent of GDP is one of the lowest in the world. The government plans to raise it above 15 percent by 2015. Income tax revenues could be raised, and a farming tax that Pakistan’s influential landowners have long resisted could be introduced, while a service tax on property and the stock market would be welcomed by many economists. reuters

 

[Neo]

Boosting Exports: Economists for revising incentive structures​

ISLAMABAD: In order to promote international competitiveness and growth of the country, the Panel of Economists in its report suggested the government to revise the structure of incentives to promote export-led growth requirements.

The report recommended that guiding objectives should be the promotion of higher value addition in exports and, to that end, incentives should be linked to the rate of increase in exports. They also suggested the government to contact the services of private firms in seeking market potential in foreign countries for Pakistan products.

The Panel of Economists report, presented to the Prime Minister yesterday, identified that structural weakness of the economy, highlighted by the current crisis, is due to the lack of international competitiveness that retards an export-led growth strategy.

According to the economists’ report, the government has to take information from private marketing firms with local knowledge of potential export markets. The government’s role in providing marketing information and producing to international standards needs to be revamped, the report suggested.

Economists also suggested the government to upgrade skill development programmes for potential labour forces. Worker skills were critical to give firms a competitive edge in international markets; programmes for skill upgrading need to be modernised.

They suggested the government to address quickly the current power shortages through medium-term power plan that provides reasonably priced and uninterrupted power to industry. A communication strategy should be in place to inform industry as to when improvements in power could be expected, the economists wrote in the interim report. Within country logistics costs should be reduced which would require investment in upgrading infrastructure and institutional and regulatory reform.

Geo-political developments provide an opportunity to open up new vents for sustained long-term growth by exploiting scale of economies arising from opening regional trade, in particular trade with India. This has the potential for unleashing productivity and income enhancing export led growth, which would be similar in scale to the earlier major growth vents such as import-substitution industrialisation following partition, the spread of green revolution technology in the 1960’s and the 70’s and the flow of remittances in the 1980’s and 1990’s.

 

[Neo]

Korea to lend $205m to Pakistan​

ISLAMABAD: Pakistan and Korea signed two loan agreements worth $205 million under the Economic Development Cooperation Fund (EDCF) on Thursday.

Economic Affairs Division Secretary Farrakh Qayyum and Korean Ambassador to Pakistan Shin Un signed the agreements on behalf of their respective governments, while State Minister for Economic Affairs Hina Rabbani Khar witnessed the signing ceremony. The first agreement was in connection with a ‘framework arrangement’ between the two governments concerning loans from EDCF for the years 2008-2011.

Under the agreement, Pakistan would be entitled to avail the EDCF loan from Korea up to $160 million at the interest rate of 0.1 percent with repayment period of 35 years including a 10-year grace period.

Under the second agreement, Korea would provide Pakistan $45 million EDCF loan concerning Gujranwala Electric Power Company (GEPCO) substations for the Rural Distribution Construction Project. The loan would be utilised to design, procure and install equipment with technical assistance from Korea for the construction of 132/11 KV sub-stations in GEPCO region.

Speaking on the occasion, Hina Rabbani Khar said that at this time of economic hardship and energy shortage, Korea had come forward and stood with Pakistan to further strengthen the bilateral economic co-operation. She hoped that the agreement signed for the development of the power sector would help reduce the power crisis.

The Korean ambassador also hoped that the agreements would help further enhance bilateral economic co-operation.

The Korean government had established the EDCF in June 1987 to promote Korea's economic co-operation with developing countries. It assists developing countries by providing necessary funding for industrial development and economic stability. The Exim Bank of Korea is responsible for the operation of the EDCF, including project appraisal, execution of the loan agreement and evaluation after project completion. app

 

[Neo]

FTA boosts Pak-China trade volume to $6.54 billion: counsel general ​

KARACHI (November 21 2008): After signing of a Free Trade Agreement (FTA), the trade volume between Pakistan and China, a time-tested all-weather friends, has reached to $6.54 billion. The Counsel General (CG) of China in Pakistan, Chen Shanmin said this in a seminar, entitled 'Inside China', organised by Management Association Of Pakistan (MAP) at a local hotel on Thursday.

He said China was investing in plenty of fields in Pakistan, most dominantly in agriculture, energy, defence, telecom and health sector. The two countries had recently signed an agreement to install two nuclear powers, the phase -3 and phase-4.

Shanmin said that his country was also investing $618 million in coal mining and power generation to meet the power shortages in Pakistan. Further, he said that Chinese mobile companies were also investing around $800 million in Pakistan, which would increase the trade volume up to $7billion in near future.

To a question, he said that a delegation of bankers were also in Islamabad to see the scope and environment of banking in Pakistan. The Chinese envoy said that by the time, more than 1,000 Pakistani students were studying in his country on scholarship and the number would be further increased in future. Shanmin said that after choosing the way of reform that began in the rural areas, China was celebrating its 30th successful year of reform and this year.

With momentous changes like building infrastructure, factories, spreading education, research and development and other extrapolations, China was expected to be the world's largest economy in 2030, he added. Pointing out on the social and political system in china, the CG said that socialism had grown up on their own land and the communist party had won the minds and hearts of Chines people after the war with Japan in 1949.

'Chines democracy is not only the one exists in the world but, our peoples know its real meaning. We do not copy the western form of democracy, though we shoo the best of other political or social system,' he added. Citing the economic development of the country, Shanmin said that the GDP growth from one percent in 1990 to the five-percent in 2008 was the result of the successful reform in the modern co-operative system, macro economic regulatory system of the advanced and centralised economy of China.

According to the CG, due to its fast developing economy, the China part in the in the world's poverty reduction was estimated to 67 percent. China recently had spent a historical huge amount of $43 billion in the Olympics game held in its own territory.Despite the recorded developments inside the country, China still had 50 million people in the clutches of poverty and its GDP behind the 100 GDPs of the states across the world, he added.

 

[Neo]

Tariff framework for imported coal power projects: government, multinational companies fail to evolve consensus ​

ISLAMABAD (November 21 2008): The Federal government and multinational companies have failed to develop consensus over tariff framework and determination process for imported coal power projects, well-informed sources in PPIB told Business Recorder.

The representatives of AES and Mitsui, who have completed their feasibility studies and are in the process of finalising the EPC contracts before submission of tariff petitions with the National Electric Power Regulatory Authority (Nepra), deliberated with the officials of Private Power and Infrastructure Board (PPIB) and the Nepra recently to prepare an alternate tariff determination for imported coal project, but the issue remained unresolved.

The sources said the representatives of multinational firms were of the view that due to very high demand for power generating equipment, the EPC contractors were not responding to any sponsor or investor, who did not have either the Nepra's determined tariff or letter of support (LoS) issued by the PPIB. The sponsors were requesting for an alternate tariff determination procedure to resolve this issue, which appears to have stalled any further progress of their projects.

The AES representatives, after recapitulating the problems of low validity price period being offered by the EPC contractors and its impact on the bankability of the project, suggested two-tier tariff mechanism whereby Nepra would admit tariff petition based on updated EPC cost estimates as provided in the feasibility study.

They also suggested that Nepra should hold public hearings and complete other requirements of tariff determination process. Finally, the Nepra will issue first tier tariff and also provide guidelines for international competitive bidding (ICB) process for the EPC.

After obtaining the actual EPC price as per the government's guidelines, the sponsors would submit the price to Nepra and it would adjust the tariff based on actual EPC price and issue final tariff without repeating the process of normal tariff determination.

Simultaneously, the AES proposed that the sponsors would strive for completing reasonable due diligence with their proposed lenders and draft agreements required for achieving financial closing. The AES continuously insisted that NEPRA should follow the tariff mechanism as developed under the tariff framework, the sources continued.

Mitsui representatives Saria Abubakr and Sheikh Muhammad Iqbal agreed with the AES, but suggested first tier tariff from Nepra without updating the feasibility study numbers, because in their views updating feasibility numbers would unnecessarily waste the time.

They were of the view that a restriction should not be put regarding obtaining the EPC cost through the ICB only, and commented that Nepra may decide appropriate mechanism like a negotiated deal to get the most competitive EPC cost. Furthermore, they requested to include sea-based infrastructure instead of jetty only for the purpose of providing linked with change of work scope.

The sources said the General Manager (WPPO), Water and Power Development Authority (Wapda) argued that the EPC cost as well as O&M cost may be sought through a competitive bidding process. He agreed with the concept of first tier tariff determination on available feasibility study figures, but did not agree with the concept of automatic tariff adjustment based on whatever prices obtained through competitive bidding process, as desired by the sponsors.

He was of the view that Nepra should have the right to examine the costs obtained through bidding. The PPIB and Nepra representatives were also supportive of these views. According to sources, the sponsors also suggested that re-opening of prices obtained through bidding process would defeat the very purpose of this exercise because reopening of prices at that later stage would not only enhance the risk in the project, but would also not be acceptable to lenders.

Investors also argued that to ascertain transparency in the bidding process, they may allow the Nepra, PPIB and WPPO to observe the bidding process, or may become part of evaluation committee for processing the bids and then the prices obtained must be adjusted automatically in the final tier tariff.

The sources said the PPIB and WPPO stated that a blanket commitment (that whatever prices are determined through bidding process will be accepted by Nepra) cannot be made as the prices could be very high. During the meeting, an effort was made to formulate stepwise determination process. A draft, therefore, was effectively formulated.

THE FOLLOWING ARE THE MAJOR POINTS:

-- Determination of first tier tariff without updating feasibility study numbers.

-- Second (final) tier tariff on the basis of only EPC prices obtained through bids instead of both EPC and O&M costs obtained through bids, (c) including sea based structures related to jetty for re-openers in case of change in scope were agreed. Interestingly, both the AES and Mitsui were indecisive on the timing of LoS issuance. The AES was skeptical for repeating the full tariff determination exercise during final tier tariff and was of the view that the final tier tariff should follow the hydel tariff mechanism.

There was a general inclination for accepting the suggestion to follow hydel tariff mechanism, which suggests "while determining the tariff, the Nepra may carry out detailed prudence of costs. However, if the applicant supports its petition by providing competitive bids from a number of reputable contractors, the Nepra may accept the lowest of bids without going into detailed diligence exercise".

 

[Neo]

650 megawatts to be added to the national grid early next year ​

ISLAMABAD (November 21 2008): The Minister for Water and Power, Raja Perviaz Ashraf said on Thursday that an addition of about 650MW in the first quarter of 2009 to the national grid will substantially improve power supply position in summer. He said that presently there is no load shedding due to change in the weather.

The Minister said three provinces objected to the construction of Kalabagh dam and it is not in the interest of the federation to initiate any controversial projects, he said.

The Executive Committee of the National Economic Council (Ecnec) has approved the Diamer Basha Dam with a capacity of generating 4500 MW, he said. Responding to a question in the National Assembly about steps being taken to increase power generation in the last five years, the Minister said six power projects including Ghazi-Barotha with installed capacity of 2200mw were added to the system during the last five years.

Further, the government has planned 25 power projects with the installed capacity of about 5730mw for 2009-2010. These projects will help the government end load shedding, he added. On a query that why load shedding persists in Karachi, the Minister replied that 500mw power is supplied to the KESC by Pepco to overcome the problem. 'We are making efforts to improve the system to resolve this issue on permanent basis,' he maintained.

Commenting on a question by Beelum Husnain concerning the expenses on Khushal Pakistan advertisement campaign in print and electronic media, Minister for Information and Broadcasting, Sherry Rehman said that the claim of print media of Rs 240 million have been settled. The campaign was passed by a high level committee of the previous regime.

About 100 million were paid to different TV channels through three agencies ie, Ad Group, Midas and Kenad, she said adding that committee has been formed to fix the responsibility and make ads awarding system transparent.

Responding to a question about the number of overseas Pakistani workers and remittance of foreign exchange by them, the Minister for overseas Pakistanis observed that 2.686 million Pakistanis are working abroad and their remittances in 2007-08 were $6451.24 million.

Further, promotion and use of Urdu in the government offices was supported by a number of law makers, saying that heads of state should make their speeches in Urdu while on foreign trips as all international leaders visiting other countries speak in their national language.

 

[Pk_Thunder]

Sharif's China visit termed highly successful​

RECORDER REPORT
LAHORE (November 21 2008): Terming current visit of Punjab Chief Minister, Mian Shahbaz Sharif highly successful, Central Finance Secretary Pakistan Muslim League-Nawaz (PML-N), Pervez Malik said that it would help bring substantial Chinese investment in the country. Malik hailed agreements reached between Punjab government and Chinese institutions as a result of Chief Minister, Shahbaz Sharif's efforts.

He hoped that Shahbaz's visit would lead to further strengthening co-operation between the two countries. He further said that Mian Shahbaz Sharif would definitely succeed in restoring confidence of Chinese investors. The PML-N leader called for strengthening the parliamentary democracy to bring the country out from present crisis.

"If the parliament is sovereign, no individual or institution would dare to exploit others", he said. He further said the people had voted democratic forces for change of system and not mere faces. He regretted that no solid steps have so far been taken by the PPP government to provide relief to the masses and end their deprivations.

He urged the rulers to follow the footsteps of Mian Nawaz Sharif to resist foreign pressure. Despite strong worded statements by the President and Prime Minister, US predators are continuously violating Pakistan's territorial integrity and killing innocent peoples in tribal areas, he said.

He was of the view that the present government has badly failed to protect sovereignty of the country and life and property of the masses Malik also underlined the importance of independence of judiciary for elimination of extremism and promotion of democracy in the country.

He asked the government to implement Charter of Democracy and Murree Declaration for ensuring political stability in the country. He added secret agreements of the government with foreign powers and international financial institutions would cause severe blow to national economy and democracy

 

[Pk_Thunder]

Turkey keen to promote cooperation with Pakistan in trade, technical, education ​

ISLAMABAD, Nov 18 (APP): Turkey is keen to promote bilateral ties and cooperation with Pakistan in various sectors particularly in economic and trade, technical education and culture.

This was stated by the leader of the visiting 32‑member Turkish delegation and Chairman of Pak‑Turk Foundation, Unal losur while speaking at a reception hosted by National Vocational and Technical Education Commission (NAVTEC) here last evening.

Expressing the desire of Turkish business community to invest in Pakistan, Mr. Unal expressed the hope that the investors will be facilitated in the country.

He also suggested the bilateral visits of university students to each other’s countries under bilateral exchange programme.

He was confident that these visits would enhance cultural relations and will make positive impact on economic ties which will ultimately benefit the people of the two countries.

He also wished all success to NAVTEC in its endeavours to skilling Pakistan.

Earlier, welcoming the Turkish delegation, the Executive Director, NAVTEC, Mr. Muhammad Athar Tahir said “We were trying to establish strong links between technical trained workforces of Pakistan with Turkish business community”.

Outlining the objectives of the establishment of NAVTEC, Athar Tahir said that all possible efforts were being made to upgrade the level of technical education in the country at the desired level.

He suggested for more cooperation between the two countries in technical education and vocational fields.

Later, Executive Director, NAVTEC presented a souvenir to Unal losur, Chairman, Pak‑Turk Foundation and M. Ali Yalandag, Turkish businessman in Home Textile.

 

[Neo]

No Pakistan defense budget cut in IMF loan​

ISLAMABAD, Pakistan, Nov. 21 (UPI) -- The Pakistani government hasn't agreed to any defense budget cut to secure a bailout package from the International Monetary Fund, a minister said Friday.

Pakistani Finance Minister Hina Rabbani Khar told the National Assembly the government has also not agreed to impose any agriculture tax in return for IMF help to resolve the country's balance-of-payment crisis, the state-run Associated Press of Pakistan reported.

"We have agreed to no such issues and there is no such plan on the table ... IMF will not give dictation to Pakistan," Khar said.

She said while there are a number of wrong perceptions among the public about the IMF rescue, the program doesn't entail indirect taxes, the report said.

Khar said the IMF loan will carry an interest rate of 3.5 percent to 4.5 percent.

Pakistan is facing a severe economic crisis, critically low foreign exchange reserves and inflation running as high as 25 percent. It is negotiating with the IMF for a $7.6 billion bailout but IMF loans usually come with tough conditions.

Pakistani officials have said the government has approved an economic stabilization program and completed talks with the IMF.

Khar said Pakistan's foreign exchange reserves as of Nov. 14 totaled $6.6 billion, the news agency reported. She said direct taxation in the country remains a challenge as only 1 million people were under the tax net.

 

[dr.umer]

Pakistan's Rupee Strengthens for a Fifth Week Against Dollar ​

Nov. 21 (Bloomberg) -- Pakistan's rupee posted a fifth weekly gain, its best winning streak in a year, after the government said it expects to receive the first installment of an International Monetary Fund bailout this weekend. Bonds fell.

The currency closed at a six-week high after the government said it expects a minimum $3.2 billion of a $7.6 billion IMF loan to be transferred to the central bank as soon as the fund's executive board approves the payment. The rupee tumbled as much as 26 percent this year, reaching a record low last month as concern mounted the government would default on its overseas debt obligations.

"The main reason behind the fall in dollar demand is the anticipation of long-awaited default-avoiding funds coming in from the IMF,'' said Imran Khan, head of research at First Capital Equities Ltd. in Karachi. "The government's clear policy announcements also helped curb speculative activities in the currency market.''

The currency rose 1.3 percent this week to 79.29 per dollar as of 4:50 p.m. in Karachi, according to data compiled by Bloomberg. It reached 79.15 on Nov. 19, the highest since Oct. 10, after strengthening from a record-low 83.55 on Oct. 17.

Pakistan is counting on the IMF bailout to help build up its foreign-exchange reserves, which shrank 75 percent in a year to $3.5 billion, and to attract investment that will boost an economy predicted to grow at the slowest pace in seven years.

The yield on the benchmark 9.6 percent bond due August 2017 rose 0.1 percentage point to 15 percent. Bond yields move inversely to prices.

 

[Pk_Thunder]

Pakistan conventional products’ exports up 44pc​

Friday, November 21, 2008
Pakistan conventional products’ exports up 44pc KARACHI: Pakistan exports of conventional products during the first quarter of the current fiscal year surged by 44 percent, while those of textile products declined by 0.97 percent.

Federal Statistics Department released data said that the exports of conventional products during July-October amounted to $3.023 billion as compared to $2.225 billion in the same period last year. Rice, sports goods, engineering, leather products, footwear, surgical and other products were included among those, whose exports were seen rising.

On the other hand, textile products’ exports decreased by 0.97 percent and thus, the exports of textile and clothes aggregated to $3.539 billion, while in the same period last year, it had remained at $3.573 billion and textile machinery imports also plummeted by 28 percent.

 

[dr.umer]

Joint Study Group of Pakistan-Japan agree to further examine areas of cooperation ​

21 Nov 2008

TOKYO, Nov 21 (APP): The Joint Study Group (JSG) of Pakistan and Japan has agreed to further hold consultation on areas of cooperation and submit their respective reports again next month to be finalized by February 2009. Both sides during their two days meeting held at the Tokyo Chamber of Commerce and Industry presented proposals for cooperation to help Pakistan to address the challenges the South Asian country’s has been facing due to the financial crisis around the region.

“Almost both sides had consensus on major areas, except on FTA which would be sorted out after mutual consultations”, the Minister Economic at Pakistan Embassy told APP in an interview on Friday.

During course of meeting Japanese side stressed the need in areas to be given priority like Agriculture, Water Resources, Traditional industries like textile, rice, mango, vocational and technical training, infrastructure development that included energy and communication, sustainable development through industrialization, high tech-value added products, Free Trade Agreement, public and private partnership, political stability and improvement in law and order situation.

The Pakistani side emphasized for development of key industries, like steel mills, ports and shipping, chemical industries, development of textile industry as well as its transformation into a value added goods, promotion and spread of education, FTA, policies towards Foreign Direct Investments and energy sector development.

The Japanese asked Pakistanis side to give some time to further review these proposals and both sides agreed to exchange the draft report next month for giving a final shape in February next year.

A 10-member Pakistani team was led by Mr. Abdul Qadir Jaffar, Chairman Pakistan-Japan Business Forum included experts and professionals from IBA, while Mr. Makoto Kakebyashi, the Chairman Pakistan-Japan Study Group headed Japanese delegation.

The Minister Economic at Pakistan Embassy, Iftikhar Babar represented as observer from Government of Pakistan.

Iftikhar Babar also presented a proposal to the JSG regarding setting up of Special Economic Zone in Karachi and said that it would help to play a critical role in rapid industrialization of Pakistan and in boosting country’s exports. The proposal was highly appreciated by the Japanese side and said that they would get due weightage in its main report.

The JSG was constituted at the High Level Dialogue Meeting held between the two governments in July, 2007 to help in devising a strategy for realization of goals as enunciated in Pakistan’s Vision-2030.