Pakistan Economy - News & Updates - Archive

[Neo]

‘US should expand IDP aid to $1bn’ ​

* PAL-C says children living in IDP camps need particular attention

WASHINGTON: An advocacy group working on the Capitol Hill has urged the US to expand assistance for internally displaced persons (IDPs) to $1 billion.

“In addition to the assistance required to provide basic services, there will be further assistance required to provide education and counselling to the children housed in the camps,” said the Pakistani-American Leadership Centre (PAL-C). The centre drew attention of both the US Congress and administration to the urgent needs of the IDPs. According to Mossadaq Chughtai, a noted PAL-C founding director, children living in the IDP camps need particular attention.

Another Pakistani-American organisation, Friends of Pakistan, has also launched a fund-raising campaign to marshal resources that would help Islamabad take care of the largest migration of people the country is witnessing since Independence. The Obama administration and the Pakistani embassy in Washington have been encouraging Americans to contribute to relief assistance through the UN High Commissioner’s Office for Refugees (UNHCR), by taking part in a text messaging initiative announced by Secretary of State Hillary Clinton last week.

A bipartisan group of US senators has also asked President Barack Obama to significantly expand American humanitarian assistance as part of efforts to help Pakistan look after the displaced people properly. Meanwhile, Ambassador to the US Husain Haqqani is scheduled to host members of the Pakistani American community this week to mobilise support for the people of Swat. app

 

[Neo]

Pipeline or pipe dream?​

By Rasul Bakhsh Rais

If all or most of the Iranian gas is used for the power sector, as stated by the government, then our energy mix will remain lopsidedly dependent on imported fuel

After more than a decade of negotiations and many ups and downs, Iran and Pakistan signed the framework on the Iran-Pakistan ‘peace’ pipeline during President Asif Ali Zardari’s visit to Tehran, pushing the much-delayed project a notch forward. The gas pipeline project makes economic sense: Iran has surplus gas to sell and Pakistan needs gas.

But situations, particularly in the extended Southwest Asian region, don’t always follow economic logic; instead, they are determined by politics, strategic interests, rivalries and conflicting views, particularly about Afghanistan.

Since the pipeline project presently concerns Iran and Pakistan, it would be better to comment on the nature of Pak-Iran ties and whether or not moving forward with pipeline will also move forward the somewhat troubled relationship between the two states. The answer lies in how we read the nature of this relationship and how it is likely to develop in the context of the larger context of power between a variety of players — Iran, Afghanistan, Pakistan, India and the United States.

The smiles and tight embraces of diplomats and political leaders of Iran and Pakistan don’t tell much about the hidden tensions, mistrust and cloak-and-dagger behaviour between the two countries. All the talk about common cultural and civilisational roots doesn’t carry much weight for territorialised nation states, which have their own interests.

It is the conflict or congruence of these interests that can either cause rifts between states or bring them closer together. And in today’s world, specific issues drive relations between states like Iran and Pakistan, and within the context of the larger strategic vision of each country.

We are not sure if the strategic visions or regional and outside powers and the games they play create any groundswell for comprehensive partnerships beyond certain specific issues. The strategic partnership between Iran and Pakistan was shaped by the dynamics of the Cold War, and American dominance in Iran ended three decades ago with the Iranian clergy’s capture of the state.

The Iranian clergymen, like their counterparts in Pakistan, have a worldview, a strategic map and a policy framework to order Iran’s regional and global relationships. In their bipolar view of the East (Muslim countries) and the West, Pakistan has been on the other side of their policy and ideological fence. It has not been easy for Pakistan to win real friendship of the post-Shah Iranian leadership.

We don’t think Pakistan’s pragmatic tilt toward the West, more specifically the United States, was or could be a major roadblock in the way of closer relations between Tehran and Islamabad. What causes these hidden tensions, then, are conflicting interests in Afghanistan and horizontal partnerships between feuding Afghan social groups and regional states like Pakistan and Iran. This rivalry has fuelled the fire between the Taliban and the Northern Alliance, causing tremendous harm to Afghan society at large.

Conflicting visions of Iran and Pakistan have not changed in the structural sense, but there appears to be a growing agreement on three specific issues that may perhaps help to transform this relationship: the war on terror; the stability and reconstruction of Afghanistan; and energy trade.

These are not ordinary problems. They are critical and have the potential to reshape the development and security paradigms of the entire region. They key to all these issues is closer cooperation between Iran and Pakistan on the one hand, and between Afghanistan and Pakistan on the other.

While stabilising Afghanistan and creating a shared regional interest in the future of this state may take a long time, and the war against terrorism may require greater understanding than we have at the moment, the gas pipeline has a real chance of success. It can be a great infrastructural project, and the first of its kind to connect Pakistani consumers, industries and power plants to Iranian gas-fields.

What are its potential benefits and drawbacks for Pakistan?

A straightforward argument is that the pipeline project is a perfect match between a country with an energy surplus and an energy-deficient country, and that the deal is going to benefit both. It is a win-win situation.

The real potential benefit of energy trade between Iran and Pakistan, with the possibility of its extension to India once New Delhi is on board, is in creating latent interdependence. The reason for naming the proposed gas pipeline as a ‘peace’ pipeline is because of its value in making the three countries interdependent on one another, and thus subjecting old disputes to the economic rationalism required in this day and age.

Economic interdependence leads to much larger and complex relationships, forming an unbreakable web and creating dense partnerships, and causing a spill-over from one set of issues to another. It is of course not an automatic process, and is subject to critical political decisions.

And those decisions are about how to harmonise conflicting strategic visions that dominate in our region in all other aspects of inter-state relations. We can also approach the issue of energy trade and larger economic cooperation by separating them from conflicting strategic pursuits, and then let the real economic benefits work on reshaping the respective strategic visions of each country.

The outcome will depend on whether it is economic rationalism or divergent strategic views that shape this partnership. It is better to realise economic benefits and let them shape the future course of our relationships than unsettled strategic problems and conflicts. But in a region like ours, competing security interests cannot easily be sidelined from the decision-making process.

Pakistan, however, runs the potential risk of over-dependence on Iranian gas, which may affect efforts to explore and develop our own gas fields. If all or most of the Iranian gas is used for the power sector, as stated by the government, then our energy mix will remain lopsidedly dependent on imported fuel.

Another serious question is why our rulers continue to ignore our hydroelectric power potential and the Thar coal deposits, some of the largest in the world. The lack of consensus that is often cited as the reason for not utilising our own resources is also politically manufactured, as the interests of important political players at a given point in time may demand something else.

Before we find leadership with a national vision and the political will to help ourselves through our own resources, let us do what energy-starved countries do: import.

Dr Rasul Bakhsh Rais is author of Recovering the Frontier State: War, Ethnicity and State in Afghanistan (Oxford University Press, 2008) and a professor of Political Science at the Lahore University of Management Sciences. He can be reached at rasul@lums.edu.pk

 

[Neo]

IPI becomes ‘peace pipeline’​

The big dividend from the tripartite Iran-Afghanistan-Pakistan meeting is the Iran-Pakistan gas pipeline deal announced on Sunday. President Asif Ali Zardari and President Mahmoud Ahmadinejad signed a “framework” agreement in Tehran which will lead to a formal agreement on the building of a pipeline in a fortnight. The pipeline project has taken 14 years to materialise because of the political vicissitudes of the region and, one has to admit, inexperience on the part of the parties concerned of the culture of pipelines.

The project, earlier dubbed Iran-Pakistan-India pipeline, was conceived in 1995. Last year, as a result of India signing the US-India nuclear treaty, based on a US Congress law which suggests that India follow the American line on Iran, India quit the pipeline deal. Iran’s own relations with India went through some ups and downs because of the former’s frequent “change of mind” on done deals. Pakistan also faltered on oil-pegged price-setting with Iran in a seller’s market when oil was selling at nearly $150 per barrel. Thankfully, all that now seems to have been sorted out.

India is out for the time being. But Prime Minister Manmohan Singh, the economist, might realise in his new tenure that nuclear technology has been trumped by India’s colossal demand for energy. Today, when the price of oil is $60 a barrel, the deal Pakistan has clinched looks greatly attractive. Pegged to 80 percent of the price of oil, the gas Pakistan will get will save it a billion dollars a year. But since these savings will be in the sector of oil and furnace oil imports the advantage will be durable. Also, the 2,000 km pipeline, shared half and half by the two countries, will not go through the troubled area of Khuzdar in Balochistan but will enter Pakistan from its border near Gwadar and go to Nawabshah in Sindh, which is the hub of gas pipelines in Pakistan.

Pakistan will receive one billion cubic feet of gas from this pipeline but will expect India to rejoin the project. But India will have to decide pretty soon what it wants as the project will start on the ground in 2010. If India doesn’t, then the pipeline will become forever a two-state pipeline because of its diametrical size. Pakistan will use this gas for industrial and power generation (5,000MW) purposes. It seems that the dream of Pakistan becoming a transit country for gas supply to India and China is on hold for some time. But the destiny of Pakistan as a transit hub will not be negated by war forever.

The changing of the name of the pipeline to “peace pipeline” is not without significance. The signatories, Iran and Pakistan, cannot avoid the innuendo that “peace” has prevailed after a period of “non-peace” between the two. And the big development since the beginning of 2009, when the project was stalled because of pricing difficulties, has been Pakistan’s final decision to take on the Taliban inside Pakistan. Only a few months ago, hostile commentators in Pakistan were “noting” the presence of Iran’s foreign minister in Mazar-e-Sharif as a plot against Pakistan, but the truth is that Iran was greatly threatened by the possibility of the return of the Taliban to power in Afghanistan and said so when its officials recommended that Pakistan stop the Taliban onslaught in Pakistan.

From the low point when Iranian diplomats were killed in Mazar-e-Sharif in 1998, Iran-Pakistan relations have come out of their dark patch this year. The “transit route war” which began with India helping Iran build the Chabahar port right next to Gwadar is hopefully at an end; and after Pakistan’s opting for its true role in South Asia, the gas pipeline will serve to integrate the regional economies. Pakistan’s geopolitical, significance will be demonstrated to the world after the pipeline is completed and Iranian gas from gasfields near the Gulf is used by industries right next to the Indian border. After that, Pakistan will not be able to avoid prosperity, which is the birthright of the people of Pakistan, by choosing conflict instead of cooperation.

 

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Zardari for development of inland waterways ​

ISLAMABAD (May 26 2009): President Asif Ali Zardari Monday said Pakistan's strategic location at the crossroads of Central Asian Republics was an asset and needs to be fully exploited for increased intra-regional trade through an improved trade corridor. Chairing a meeting for the National Trade Corridor Improvement Programme (NTCIP) here at the President's House.

The President said the project must aim at revamping the physical infrastructure, trade logistics and services to make business more competitive. The president directives came a few days after he signed the controversial Memorandum of Understanding (MoU) in the US allegedly giving transit to India for trade with Afghanistan via Pakistan.

According to an official statement, the President advised the government to closely look at the development of inland waterways as a means for cost effective and pollution free bulk transportation particularly of goods in the country to relieve the burden on roads and railways.

This is an area in which the public-private partnership can play a pivotal role, he said. Development and use of inland waterways transportation will also make our trade more competitive in the region, the President observed. President Asif Ali Zardari also called for a separate briefing on inland waterways to give some shape to the proposal.

The meeting was attended by federal ministers Makhdoom Amin Fahim, Babar Khan Ghouri, Ghulam Ahmad Bilour, Deputy Chairman, Planning Commission Sardar Assef Ahmad Ali, SAPM Kamal Majidullah, Secretary General Salman Faruqui and secretaries of relevant ministries and entrepreneurs and representatives from the private sector. The meeting was informed that NTCIP will modernise and streamline trade and transport logistics, practices and customs services, improve port efficiency, reduce the costs for port users and enhance port management accountability.

The corridor also aims at sustaining delivery of an efficient, safe and reliable National Highways system; promote and ensure safe and efficient civil aviation operations, enhance export of perishable commodities like fruits, vegetables and livestock by establishing an efficient and viable cool chain supply system.

The President was informed that the National Trade Corridor Task Force (NTC Task Force) headed by Deputy Chairman Planning Commission with Federal Secretaries of Communications, Railways, Ports and Shipping, Defence, Petroleum and Industries, Chairman FBR as its members were working along with two task forces headed by the private sector experts on maritime industry, private sector development and inland waterways.

 

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Funds for Thar coal project unlikely in 2009-10 budget: Centre, Sindh government remain at loggerheads ​

KARACHI (May 26 2009): The federal government is unlikely to allocate funds in the 2009-10 budget for generation of power from Thar coal, in view of severe differences between the federal and provincial government officials regarding control over the bodies responsible for execution of the project, Business Recorder learnt on Monday.

According to sources, the Centre is insisting to carry out the development work through Thar Coal Mining Company, to be established by the federal government, whereas the Sindh government had constituted Thar Coal Energy Board, and also recently created a new department, 'Coal and Energy Development Department' for the purpose.

Sources said that the federal government had proposed only 20 percent share of the vast reserves of Thar coal to the Sindh government, and 80 percent to go to the Centre, if the mining company is allowed to carry out the uplift works. In the present setup, they said that it seemed that the federal government did not want to develop Thar coal due to a dispute, and added that no development work had been carried out at the site for past 15 years. The Centre and the provincial governments remain at loggerheads due to authoritarian control of the Thar Coal, they added.

During a meeting of the Annual Plan Co-ordination Committee (APCC), they said, the deputy chairman of the Planning Commission, Assef Ahmed Ali, had told Sindh government officials that funds could only be earmarked if the province agreed for uplift by the mining company.

Presently, they said, the country is facing a shortfall of around 3,500 MW and the delay in Thar coal project, from which some 200,000MW could easily be generated, would further aggravate the situation and push the country into darkness. Moreover, they said, the Planning Commission (PC) had also rejected to include Thar Coal and Power Technical Assistance Project of the World Bank, which was later approved following strong protest by Sindh Chief Minister Qaim Ali Shah.

 

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Decline in oil and gas production ​

KARACHI (May 26 2009): Pakistan produced an average 66,000 barrels per day (bpd) of crude oil during the first ten months of the ongoing fiscal (Jul-Apr 2009), five percent less than the previous year's 10-month average output of 70,000 bpd. On the other hand, gas production remained flatter with average supply recorded at 3.99 billion cubic feet (bcf) per day in the 10 months of FY09 compared to 3.98bcf/day during the similar period of last year.

The combined oil and natural gas production, in barrel equivalent (boe), topped-out at 707,000 bpd, depicting a flat trend versus the level of 709,000 bpd, previously. All three listed E&Ps registered production decline in the period under review. OGDC produced 41,356 bpd oil in the first 10 months of FY09 - a dip of 5 percent over the last corresponding period's production of 43,415 bpd.

Faraz Farooq, an analyst at First Capital Equities said that lower production volumes mainly ensued from the decline in production from Dhodak (-75 percent), Bobi (-21 percent), Chanda (-13 percent), Lashari Center (-32 percent), Thora (-31 percent), Pasahki NE (-25 percent), Noorai Jagir (-64 percent) fields in the operated and Pindori (-71 percent) and Adhi (-7 percent) in the non-operated areas. Nonetheless, the production declines from these fields were largely, though not completely, offset by the improved volumes at Pasakhi (+31 percent), Kunnar (+31 percent), Mela (+26 percent) and 'First Oil' from Moolan North and Chak-66 NE fields.

OGDC's gas production remained flatter with one percent increase at 995mmcf/day versus that of 982mmcf/day, previously. While the company reported better yields at Dakhni (+36 percent), Nandpur (+40 percent), Mela (+57 percent) in operated and Bhit (+10 percent) in non-operated divisions, decline at Dhodak (-79 percent) and lower output at Uch (-2 percent) in operated and Miano (-21 percent) in non-operated sections restricted the overall gas volumetric growth in the 10 months of FY09. Average gas production in April 2009 was at 1,055mmcf/day (+11 percent on year-on-year basis).

PPL produced 4,087bpd oil in the 10 months of Y09, just 2 percent above the previous year's 10-month average of 4,014bpd. In this regard, the production decline at operating filed, Adhi (-7 percent) and non-operating Makori (-7 percent) was more than offset by the higher volumes at Kandhkot (+19 percent) and Mela (+26 percent) fields. Whereas, the gas production topped-out at 875mmcf/day in this period- down by 3 percent over that of 902mmcf/day, previously.

Faraz said that the main reason for this decline was 6 percent lower production from heavyweight Sui field. Moreover, production volumes also remained lower at non-operating Sawan (-10 percent) and Miano (-21 percent) fields. The impact was, however, partially offset by the better averages at Adhi (+3 percent), Kandhkot (+11 percent), Qadirpur (+3 percent) and 'First Gas' from Tajjal and Latif fields commenced from January 2009. In the month of April 2009, PPL's oil output was 9 percent on year-on-year higher at 4.3kbpd while gas supply remained flat on yearly basis at 882mmcf/day.

POL's oil production during the first ten months of FY09 averaged at 3,828bpd - a massive decline of 26 percent over 5,200bpd recorded in the similar period of last year. This decline was largely contributed by subdued production volumes at Pindori (-71 percent).

The average oil production from this filed in the 10 months of FY09 was 912bpd versus that of 3,149bpd, previously. In April 2009, the oil volumes even dropped below the first three digit mark (100bpd) and recorded at 74bpd - a decline of 97 percent over 2,125bpd in April 2008. The current production (2nd week of May) at Pindori is 312bpd.

In addition to Pindori, lower volumes at Pariwali (-22 percent) also shared the dip in headline oil volumes. The similar pattern was observed when it comes to gas production which depicted 13 percent decline in this period at 39mmcf/day compared to 45mmcf/day, previously. Again this was largely led by substantial declines at Pindori (-70 percent) and Pariwali (-17 percent).

 

[Neo]

Japanese businessmen urged to enhance imports from Pakistan ​

ISLAMABAD (May 26 2009): Chief Executive of Trade Development Authority of Pakistan (TDAP), Syed Mohibullah Shah stressed upon Japanese businessmen to enhance imports from Pakistan. According to a press release from the Embassy of Pakistan received on Monday, the TDAP Chief during his meeting with Japanese businessmen in Tokyo on Monday briefed them about superior quality of Pakistani carpets, furniture, textile products and handicrafts.

He apprised Japanese businessmen about high quality Pakistani products with much lower prices as compared to other countries in the region. Shah called upon Japanese traders to enhance their imports from Pakistan saying that current Pakistani exports to Japan were too small.

He assured the traders that the TDAP would extend all possible support to Japanese businessmen interested in importing products from Pakistan and also extendded invitation to the Japanese businessmen to attend EXPO Pakistan to explore new products available in the Pakistan market. He will also met the Japan's Vice Minister for Agriculture,Forestry and Fisheries to resolve almost decade long issue of the export of Pakistani Mango to Japan, the release added.

 

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'Pakistan and Jordan to sign FTA soon' ​

ISLAMABAD (May 25 2009): Pakistan and Jordan will sign "free trade agreement" very soon to further promote bilateral trade and for the benefit of the business community of the two countries.

This was stated by the Ambassador of Hashemite Kingdom of Jordan to Pakistan Dr Saleh Ahmad Al-Jawarneh in a message on the occasion of celebration of 10th anniversary of assumption of power by King Abdullah II and 63rd anniversary of Hashemite Kingdom.

The Jordanian ambassador is hosting a reception on Monday in connection with the celebrations of anniversary of assumption of power by King Abdullah II and 63rd anniversary of Hashemite Kingdom.

The ambassador said "free trade agreement" between Pakistan and Jordan is expected to be signed in the near future. He said a number of Jordanian companies have already been working in different fields in Pakistan while both the countries have been engaged in trade of various commodities and the FTA will further increased. He said the people of Jordan celebrating 10th anniversary of King Abdullah II Ibn Al-Hussein's assumption of power and 63 independence day of Hashemite Kingdom of Jordan this week.

The ambassador Dr. Saleh Ahmad Al-Jawarneh said both Pakistan and Jordan have very warm, brotherly and friendly ties. He said these brotherly relations established since the inception of both the nations and flourished in all the years.

The Jordanian ambassador said, "These ever growing bilateral relations touch every facet of a nation's existence, political, economic and social aspects." He said it is most fortunate for both Pakistan and Jordan that such conditions exist and continue to be strengthened as the two nations maintain this historical friendship and association.

The Jordanian ambassador said there has been always excellent diplomatic ties between the two nations, as there have been numerous exchange of visits in the recent past such as the visit to Jordan made by Minister for Investment Waqar Ahmed Khan who led Pakistan delegation participated in the World Economic Forum. King Abdullah II is the 43rd generation direct descendant of the Prophet Muhammad (Peace Be Upon Him). He assumed his constitutional powers as King of Jordan on June 9, 1999.

Referring to the efforts of King Abdullah II, the Jordanian ambassador said Pakistan and Jordan made progress in improving relations in different fields. The Jordanian ambassador said King Abdullah II, who is a brilliant leader and passionate man and possessed innovative ideas and has the drive to translate them into reality.

He said King Abdullah II made supreme efforts towards effecting peace throughout the Middle East using his well-earned reputation of being a sincere brother to all Arab nations, including furthering the cause of the Palestine people.

The ambassador said Queen Rania Al-Abdullah is also very active in the social welfare projects especially relating to women rights. She remained engaged in development, humanitarian and charitable causes as well as towards furthering the cause of women's rights.

The ambassador in his message extended a warm welcome to all the Pakistani brothers and sisters to make a tour of Jordan and seek out the profitable business and investment opportunities.

 

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Pakistan and Indonesia agree to expand cooperation ​

ISLAMABAD (May 27 2009): Indonesia on Tuesday reiterated its support for Pakistan's bid for Full Dialogue Partnership in ASEAN, as it desires higher-level of political and economic integration with ASEAN. Talking to Foreign Secretary, Salman Bashir on the sidelines of the 9th ASEM Foreign Ministers Meeting in Hanoi, the Foreign Minister of Indonesia Dr N Hassan Wirajuda expressed satisfaction at the long-standing brotherly relations between the two largest Muslim countries.

He briefed the Foreign Secretary on various regional initiatives, both inside and outside ASEAN's auspices, to tackle the global financial crisis. The Indonesian Foreign Minister appreciated Pakistan's role in regional stability and campaign against religious extremism and terrorism. Foreign Secretary thanked the Foreign Minister for Indonesia's role in strengthening Pakistan's close association with the East-Asian region.

He emphasised that despite the present security challenges, national development agenda remained Pakistan government's top priority. In this context, he stressed that regional and trans-regional linkages were essential to realise the full economic potential. The Foreign Secretary also briefed the Indonesian Foreign Minister on regional security situation and trilateral processes of engagement with Afghanistan, particularly the President's recent visit to Iran for the Pakistan-Afghanistan-Iran summit.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan and Thailand pledge to expand bilateral ties ​

ISLAMABAD (May 27 2009): Pakistan and Thailand Tuesday agreed to comprehensively expand bilateral co-operation across the political, trade, economic, commercial, energy, education and cultural fields. This was decided during the meeting between Foreign Secretary, Salman Bashir and the Foreign Minister of Thailand, Kasit Piromya held on the sidelines of the 9th ASEM Foreign Ministers Meeting in Hanoi, Vietnam.

Foreign Office Spokesman, Abdul Basit giving details of the meeting said the two sides shared the view that immense potential existed not only in further broadening and deepening bilateral co-operation in various fields, but also in benefiting from each other's strategic location to undertake collaborative ventures in third regions.

The Foreign Secretary, while emphasising Pakistan's desire for building a comprehensive economic partnership with Thailand, stressed the importance of forging regional linkages and promoting trans-regional development co-operation.

In this context, he particularly emphasised Pakistan's objective of Full Dialogue Partnership as well as higher-level political relationship and economic integration with ASEAN community. The Foreign Secretary also apprised the Thai Foreign Minister of Pakistan's participation in various trilateral initiatives to promote stability in Afghanistan and advance the trans-regional development agenda.

The central theme of this engagement was to enhance regional connectivity through trade and energy corridors and infrastructure development with a view to maximising the economic potential of the region, he said. The Thai Foreign Minister reciprocated the commitment to up-grade the overall bilateral relationship, with a particular emphasis on a strong economic partnership. He identified co-operation in the fields of food processing, bio-technology and textiles as possible avenues for expanded economic collaboration.

He noted that the two countries could also work to promote trilateral co-operation through projects in Central Asia, the Gulf, and South Asia. It was agreed to schedule bilateral Political Consultations at an early date and hold the next meeting under the MoU on Combating Terrorism. The two sides also agreed to intensify mutual collaboration in regional organisations and multilateral fora.

Business Recorder [Pakistan's First Financial Daily]

 

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Malaysia keen to increase trade with Pakistan: Consul General ​

RECORDER ERPORT
KARACHI (May 27 2009): Consul General of Malaysia, Mohammad Khalid Abdul Razak has said that Malaysia is interested in increasing two-way trade with Pakistan. He was speaking at a dinner meeting hosted by Karachi Chamber of Commerce and Industry (KCCI) in honour of 13-member trade delegation of Malaysia. The Consul General said Pakistan and Malaysia are enjoying excellent relations in trade, economic, social and other fields.

He said that a number of Malaysian companies were actively engaged in Pakistan, besides frequent exchange of delegations between both countries. He said that Malaysia has made huge investment in palm oil sector in Pakistan. He said that Pakistan should make efforts to improve its image abroad to attract foreign investors. The foreign investors and importers feel that Pakistan is facing economic instability and added that efforts should be made to build better image of Pakistan.

Trade Commissioner of Malaysia, Zain Uddin Ahmed Jalil said Malaysian investors are keen to invest in services sector and transport in Pakistan. He said that Malaysia has a population of 27 million out of which 35 percent is associated with service sector.

He said at present Malaysia is importing rice, textile products and seafood items whereas exporting palm oil, rubber and food items, etc. He said that Malaysia is keen to increase trade of rice, lather and leather products and tea with Pakistan.


Business Recorder [Pakistan's First Financial Daily]

 

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Ghauri seeks National Assembly body's help to get Gwadar, PQA lands vacated ​

ISLAMABAD (May 27 2009): Pakistan Navy has illegally occupied 584 acres land of Gwadar Port and 1,250 acres land of the Port Qasim, hampering further development and extension of both the ports and for promotion of export through these ports. This was stated by Federal Minister for Ports and Shipping Babar Khan Ghauri, who sought the help of the National Assembly Standing Committee on Ports and Shipping, which met in Parliament House here Tuesday with Rana Mahmood-ul-Hassan in the chair.

During the briefing, the committee took serious notice and strongly recommended that the Pakistan Navy immediately hand over the possession of the land to the Gwadar port and Port Qasim in order to extend the ports to their requirements and to make it profitable and uplift to the international standard. The committee also discussed the split of oil from Tasman Spirit ship in Pakistani water near Karachi in detail and emphasised the report, made by the Ministry of Environment, be obtained to enable the committee to reach at final decision.

The committee also expressed deep concern on encroachment of the land of Karachi Port Trust and decided that the Inspector General of Police, Sindh, will also be invited in the next meeting to discuss the encroachment issue and the government of Sindh may also cooperate to settle the issue amicably. The committee was briefed on the installation of an expensive Fountain at Karachi seashore and other affairs of the Ministry of Ports and Shipping and its attached departments in detail.

Babar Ghauri, participating in the meeting, said that the Fountain at the Karachi seashore was a new addition in the beautification of Karachi and icon of Pakistan. It would become a profitable fountain in the near future, he added. Babar Ghauri informed the committee that they were constructing a civic centre at Gwadar Port of international standard in order to facilitate the public and to attract more foreign investors to get all the facilities at one place. He further said that they were also going to install treatment plant for the Karachi so that the sewerage directly falls into the sea.-PR


Business Recorder [Pakistan's First Financial Daily]

 

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Punjab food support disbursement to reach Rs 11 billion next month​

RECORDER REPORT
LAHORE (May 27 2009): The 10th instalment of Punjab Food Support Scheme would be dispatched to the deserving families on June 1st, 2009. After this instalment, the total distributed amount among the needy families would reach to Rs 11 billion. The Administrator, Punjab Food Support Scheme, S A Hameed said while presiding over a meeting of MPAs belonging to Lahore district.

He said that 1.4 million deserving families are being provided with Rs 1000 each on monthly basis across Punjab. He said that in case of any problem about the distribution of money orders, DCOs and the officials of the Pakistan Post of the concerned district should be contacted.

Hameed instructed the MPAs to review the status of Tandoors under 'Sasti Rotti Scheme' in their constituencies and inform the district administration about the utilisation of Atta on these Tandoors.

He also instructed the district administration to hold meetings of MPAs and co-ordinators to fully monitor the "Sasti Rotti Scheme." Further, he said that the registration of Tandoors found selling less weight Roti or over charging would be cancelled. The Administrator further said that sale of fruits and vegetables in 'Sunday Bazaars' at affordable prices would be ensured, besides provisioning drinking water for the general public. MPAs from Lahore District, DCO Lahore and other high ups of the concerned department attended the meeting.

Business Recorder [Pakistan's First Financial Daily]

 

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FBR proposes Rs 1.405 trillion target for 2009-10 ​

SOHAIL SARFRAZ
ISLAMABAD (May 27 2009): The Federal Board of Revenue (FBR) has proposed Rs 1405 billion revenue collection target for next fiscal year (2009-10) against the projected collection of Rs 1160-1170 billion for current fiscal year (2008-09). Revenue Division Secretary General Salman Saddique told the National Assembly Standing Committee on Finance here on Tuesday that the FBR still needs to collect Rs 280 billion in May-June 2009 to meet the revenue collection target for current fiscal year.

FBR STILL NEEDS TO COLLECT RS 280 BILLION IN MAY-JUNE 2009 TO MEET THE REVENUE COLLECTION TARGET FOR CURRENT FISCAL YEAR According to a presentation of the FBR on budget 2009-10 before the committee, the federal revenue target for fiscal year (2009-10) has been estimated around Rs 1400 billion.

The strategy for achieving revenue target in 2009-10 included better team management; enforcement through transparent audit and linking incentives for tax administrators with quantifiable performance (market equalisation fund). The tax officials informed the committee that the FBR had been successful in achieving the assigned revenue targets for the last several years.

However, this year is unusual in many ways; economic slowdown, weak performance of manufacturing sector and demand compression had an adverse impact on federal revenue collection. The target was revised upward in November 2008 from Rs 1250 billion to Rs 1360 billion under the IMF Economic Stabilisation Programme on the basis of the First Quarter Performance.

However, the growth in revenue was all due to higher oil prices. And as the economy stumbled after the first quarter so did the revenue. The FBR data revealed that the financial year 2008-09 has been a roller coaster ride for the FBR. It is evident from the data that the July-October was an upswing where total revenue collection was Rs 354.3 billion, reflecting a growth of 30.5 percent as compared to previous fiscal year.

The downswing started in November 2008 and November-April collection was Rs 544.9 billion, showing a growth of 10.7 percent. However, the overall collection during July-April stood at Rs 899.2 billion, reflecting a growth of 17.8 percent as compared to previous fiscal year.

The assumed growth for meeting upward revised target of Rs 1360 billion included expected growth of GDP at 22 percent; Large Scale Manufacturing (sales tax domestic growth of 22 percent); growth of 32 percent in sales tax at the import stage and 25 percent growth on the import of dutiable items.

On the other hand, the assumed growth for achieving original target of Rs 1250 billion included projected GDP growth of 17.3 percent; LSM (sales tax domestic growth of 16.5 percent); growth of 12.5 percent in sales tax at the import stage and 8 percent growth on the import of dutiable items.

One of the major reasons for shortfall in revenue collection is the fluctuation in POL prices. The POL has 28.3 percent share in indirect tax revenue ie sales tax (domestic) 44 percent; sales tax (import stage), 33 percent; customs duty 14 percent and share of POL in the federal excise duty collection stood at 4 percent. Thus, any fluctuations in POL prices, quantity or rates have a direct effect on revenue.

During 2008-09, revenue collection from POL stood at Rs 406 billion against Rs 366.4 billion in 2007-08, showing an increase of 10.8 percent. A major reason for shortfall of revenue collection at the import stage is the import compression. The import related taxes constitute about 35 percent of total tax revenue. Besides fluctuations in POL, import of the other commodities especially, automobiles, machinery and edible oil also declined during July-April (2008-09).

Resultantly, the effective rates of customs duty and sales tax decreased despite 1 percent increase in sales tax rate from 11.6 percent to 10.8 percent in customs duty and from 7.5 percent to 6.9 percent in sales tax. Another major reason for shortfall also included slowdown in manufacturing especially automobile and services sector especially telecom.

The FBR officials said that the growth is telecom was comparatively less against anticipated growth worked out at the start of the 2008-09. Giving reasons for shortfall in direct taxes collection during this period, the FBR specified that less than expected growth in CIT was due to overall slowdown. Against the targeted 25 percent growth in revenue, the overall performance of public companies was 11.7 percent; private companies 8.4 percent; banking 9.6 percent; foreign 7.0 percent and total growth stood at 10.0 percent.

The data further disclosed that the collection from "Advance Tax" grew by 2 percent only against the expected growth of 25 percent. The capital value tax (CVT) on purchase/trading of shares and property is also affected due to crash in stock market and slump in real estate sector. These two major factors resulted in decrease in CVT collection during 2008-09.

In the case of withholding taxes, the overall collection from WHT is almost 57 percent of total direct taxes collection. The WHT were assumed to grow by 37 percent, however the overall growth is around 20 percent as compared to 31 percent during the last fiscal year.

Other reasons for shortfall in direct taxes collection was largely due to non-obligatory cut on development projects/schemes, slowdown in imports and low profitability of the corporate sector. It was expected that efficiency gains from the tax administration reforms would give some revenue increase, however, self-assessment without complementary audit did not produce the desired results, the FBR added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Iran gas to generate 5,000MW, says Asim ​

Wednesday, May 27, 2009

KARACHI: Prime Minister’s Advisor on Petroleum and Natural Resources, Dr Asim Hussain said that natural gas imported from Iran will be exclusively used to generate 5,000 megawatts of electricity.

He said that country needs 8 to 10 billion cubic feet of gas while the supply is only four billion cubic feet. To a question, he said that Irani gas is not expensive in comparison to natural gas, which is going to be even costlier than petrol due to its high caloric value and environmental-friendly nature.

“Gas is also a raw material for fertiliser, textile and other industries and it is 15pc more efficient than the furnace oil used in power generation”, he noted. He said cost of pipeline project has been reduced to $1.2bn as 42 inch diameter pipeline will be locally made and the cost of steel is $700m.

Dr Asim said that those who were opposing the gas pipeline project were enemies and do not want development in the country. “Pakistan can face a grave energy crisis if we are not able to materialise this pipeline project”, he said.

While giving calculations about the savings on Iran-Pakistan gas pipeline, Asim said Pakistan would save about $1.2 billion at $60 a barrel of oil, and save $2 billion if oil price increased to $100 a barrel.

He said locally produced gas costs Rs364 or $4.5 per mmcf while Irani gas will cost Rs643 per mmcf. He said Iran has completed laying 900 kilometres of pipeline and would lay another 100 kilometres to reach the supply point at Irani border to supply nearly 1 bcf of gas per day.

To a question, he said that if India indicated willingness to join the project within the processing period, it will get gas from this pipeline, otherwise a separate 52 inch pipeline will have to be laid. He said gas price of Turkmenistan has been fixed at $10 per mmcf.

He pointed out that the results of Karachi off-shore seismic survey are encouraging and a couple of companies will start drilling activities by the end of this year.