Pakistan Economy - News & Updates - Archive

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IFIs alarmed at manipulation of GDP growth figures ​

Wednesday, May 27, 2009

ISLAMABAD: International Financial Institution (IFIs) have expressed alarm over the manipulation and change in methodologies of calculating the GDP of construction and agriculture to bring the current fiscal’s GDP growth closer to 2.5 per cent target as agreed with the IMF, a senior official at the Ministry of Finance told The News.

“Earlier the state-controlled Federal Bureau Statistics came up with projection of 2.37 per cent GDP growth that was very close to IMF target, but The News identified the faults committed by the authorities in measuring the GDP growth,” the official said.

“The Finance Ministry took notice of the issue and corrected only one fault by including the -7.7 per cent growth of Large Scale Manufacturing for July-March causing 2.37 per cent GDP to further tumble to 2 per cent,” he added.

Earlier FBS and National Account Committee (NAC) included only the LSM growth of -5.7 percent registered during in July-February period.

The FBS also changed the methodologies for measuring the construction and agriculture growth without informing the NAC.

Furthermore the FBS has also reduced the size of the GDP at current market price by Rs350 billion some three days ago without informing the competent forum of NAC.

The reduction of Rs350 billion in GDP at market price will have far reaching consequences for many key macro-economic variables such as per capita income.

When contacted for comments, Asif Bajwa, spokesman of Finance Ministry said that there stands no major change in the methodologies and said that he is not aware of any displeasure shown either by IMF nor World Bank has shown any sort of displeasure over the method of calculating the GDP growth. Bajwa said he is not competent authority to respond to such technical issues.

Advisor to Prime Minister on Finance Shaukat Tarin was not in the country as he is in Iran as a part of delegation of President Asif Zardari.

Coming to the change in methodologies in construction and agriculture sectors, The News managed to get the document, which clearly says that the construction sector covers land improvement, construction of residential and non- residential buildings, highways and bridges and other construction activities.

The document says that due to non-availability of authentic data on construction activities, the NAC in its 85th meeting held in May 2006 had decided the size of the construction activities may be ascertained with consumption of cement and steel.

The NAC gave the approval of change in methodology in 2006, but this year FBS changed the methodology in the 88th meeting of NAC held on May 16, 2009 with informing the committee.

As a result of change in methodology, the last year’s number of value added in construction changed drastically from positive 15.2 percent growth in construction sector to -3.9 percent, a variation of 19 percent. This is one reason for the downward adjustment of last year’s growth from 5.8 percent to 4.1 percent.

The question arises here why NAC was not informed of change in methodology? Has NAC given the approval to the change to new methodology in construction? Is FBS now capable to get authentic data on construction activities?

Similarly, FBS also changed it methodology on measuring the value added in major crops without bringing it to the notice of NAC.

Within a week of NAC meeting held on May 16, 2009, major revision in national accounts have taken place such as reducing the GDP growth estimates for current fiscal from 2.37 percent to 2 percent. This has put the credibility of the government in jeopardy in the eyes of international financial institutions.

 

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Budget expected to deliberate on structural issues: analysts​

KARACHI (May 27 2009): The budget 2009-10 is expected to deliberate on Pakistan's long-standing structural issues, led by the tough performance and qualitative criteria set by the IMF, analysts said.

This includes elimination of electricity subsidy, resolution of circular debt, tax administration & policy action plan (including merger of income & sales tax department, carbon tax & introduction of VAT) and lastly, formation & activation of single treasury accounts, a pre-budget research report by JS Global Capital said.

Unlike the outgoing fiscal year, the government of Pakistan's ability to finance budget deficit will be better placed, driven by commitments from Friends of Pakistan and international financial institutions (IFIs). Resultantly, the financing mix will shift from domestic sources to external. This should take the pressure off bank borrowing. The subsidies on fuel and electricity will be eliminated. The GoP had budgeted Rs 295bn worth subsidies for FY09, which is likely to decline in FY10.

However, subsidy to agriculture sector is expected to continue even in FY10. Higher Public Sector Development Programme (PSDP). Recent IMF approval for counter-cyclical policies to accommodate the recent external flows commitment will stimulate the PSDP allocation for next fiscal year. In FY09, the GoP slashed its development budget massively, due to constraint financing options. The report said that the Advisor to PM on Finance Shaukat Tarin has called next budget as - pro-growth, poor and markets. "We also view the next budget as positive, even in the presence of the IMF's looming tax threat," it added.

The reasons why we are positive are as follows:

-- Status quo for Capital Gains Tax (CGT) and turnover taxes.

-- No change likely for corporate and dividend tax.

-- Some relief to cement companies likely through excise duty cut-down.

-- Reduction in WHT along with abolishment of excise duty on auto sales.

-- Fertiliser subsidy and higher agri-credit targets to prompt agriculture growth.

-- Proposed reduction in GST and mobile activation charges for telecom sector.

As this budget will be supervised by the IMF, the report revisited the IMF notes and extracted the key highlights and recommendations regarding taxes, which are as follows:

-- Imposition of carbon taxes on sale of petroleum products.

-- Introduction of VAT and elimination of zero-rated sales tax.

-- Taxes on services sector, agriculture and real estate sector.

-- To enhance the tax base, a concept of gross asset tax is also likely to be proposed.

"Things are positive on the market, however, sector-wise it is expected that OMCs and cement would stage a strong recovery," the report said. The budget FY10 is likely to be a non-event for E&Ps, power, oil & gas marketing and financial sector. However, it is likely to carry good news for cement, auto and fertiliser sectors, the report said.

 

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Business community opposes Afghan transit trade agreement​

ISLAMABAD (May 27 2009): The business community has impressed upon the federal government to avoid inking new Afghan Transit Trade Agreement to save the economy and industrial sector from further damage as it will provide Indian products free access to Pakistani markets. The business community has also called for bringing the agriculture and services sectors in tax net.

The transit trade agreement would be tantamount to accepting the Indian hegemony, therefore, no self esteemed Pakistani would accept this agreement, said Asad Mashhadi, President Rawalpindi Chamber of Commerce and Industry (RCCI). He was briefing the media about the declaration of the conference of Presidents of Chambers of Commerce and Industry from all over Pakistan.

The RCCI hosted the conference to discuss the prevailing situation in the country. The conference was organised to discuss the local and international pressures faced by the country. Recommendations were prepared at the conference to save the industrial sector from further damages.

President Rawalpindi Chamber Asad Mashhadi presided over the day-long conference, while Mirza Abdul Rahman President Attock Chamber, Naseem-ur-Rehman Mardan chamber, Malik Ashiq Awan President Haripur Chamber, Mian Hamid Javed President Faisalabad Chamber, Muhammad Akram Badshah President Gujranwala Chamber, Malik Khalid Pervaiz President Gujrat Chamber, Abid Hussain Khokhar President Jhang Chamber, Chaudhry Shafqat Rasool president Okara Chamber and Raja Muhammad Anwar Jhelum Chamber, Shahban Khalid Acting President Islamabad Chamber and Tairq Iqbal Mughal Vice President Shiekhupura chamber participated in the conference.

"If the revival of the Afghan Transit Trade Agreement is imperative then the government should make the categories and quantities of products clear and notify them, besides providing Pakistani business community access to Central Asian Markets," Mashhadi said, adding that the entire NWFP should be included in the establishment of ROZs.

Presidents of Chambers have demanded of the government to declare the NWFP a war affected area and announce special incentives for the industrialists of the province, particularly for the industrialists of Swat and other parts of Malakand division. They also demanded special incentives for the industrialists of the Northern Areas for the revival of their industries. Asad Mashhadi said the presidents of chambers had asked the government to bring a revolutionary budget to revive the country's economy and remove distrust.

In budget proposals for the upcoming budget, the conference called for bringing the General Sales Tax to single digit from present 16 per cent, and for bringing the Income Tax rate on corporate sector to 25 per cent.

The participants of the conference demanded the inclusion of agriculture and services sectors in tax net, saying that minimum taxable amount be brought to Rs 300,000 from existing Rs 180,000 and every individual in any sector coming in this slab be brought to tax net. He said agriculture contributed 22 percent in the GDP but its share in taxation was just one percent. The multiple slab system be converted into a one rational slab, he added.

The conference termed the load-shedding a major set back to the industrial sector and asked the government to decrease the electricity tariff, Mashhadi said, adding that the government should look towards the alternative energy sources to fulfil the requirements of masses as well as industrial sector.

Mashhadi told the media that the conference deliberated on the issue of the bank loans outstanding with business community and it was demanded that bank loans to industrialists be restructured, besides giving easy loan financing to support the small and medium enterprises. He said: "banking sector has earned a lot during the last three years by squeezing the business community, but now there is the time to pay back by reducing interest rates."

The conference urged the government to settle the law and order issue in the country, especially in the NWFP without any further delay and pay concentrate towards revival of the economy. They also underlined the need of reducing interest rate and cutting down tax slabs.

The business leaders offered their full support to the affectees of Swat operation and expressed solidarity with them. They also discussed ways and means to increase the co-operation and co-ordination between all the Chambers of Commerce and Industry. The meeting also called for halting all kinds of tax audit except desk audit. Mashhadi said involvement of Chambers in the national policy making was vital for the progress of the economy. The potential of the industrial sector was not yielding any results due to law and order situation and energy crisis, he added.

The participants of the conference were of the view that Pakistan has a lot of potential as well as human resources, but due to misperception and lack of proper marketing and branding techniques, it is far behind. "We could not add value to our products due to high cost of doing business," he added.

 

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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.

 

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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.

 

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Pak-Vietnam bilateral relations reviewed​

ISLAMABAD (May 27 2009): Pakistan and Vietnam Tuesday expressed satisfaction over the existing warm and friendly relations vowed to further enhance and strengthen these ties which were underpinned by commonality of values. According to foreign office spokesman, the leader of Pakistan delegation at ASEM Senior Officials Meeting (SOM), Additional Secretary, Masood Khalid held a bilateral meeting with his counterpart from Vietnam at the Foreign Ministry.

They noted the need to have more frequent high-level bilateral exchanges, which were going to provide added impetus to the bilateral relationship. The need to hold the meetings of Joint Economic Commission and schedule Bilateral Political Consultations was also emphasised. The Foreign Office spokesman said the two sides exchanged views on possible areas for enhancing bilateral economic co-operation.

They identified agriculture and fisheries sectors as having potential for bilateral collaboration. It was noted that Pakistani pharmaceutical products are in great demand in Vietnam. A delegation of Pakistan Chambers of Commerce and Industry will soon be visiting Vietnam to explore avenues for bilateral economic collaboration. Both sides vowed to implement a road-map in fulfilment of their desire to promote mutually beneficial co-operation.

Pakistan proposed the establishment of a Joint Investment Company and conclusion of Free Trade Agreement (FTA) between Vietnam and Pakistan for furthering trade and economic co-operation. They also explored the possibility of expanding defence collaboration. Vietnam reiterated its strong support for Pakistan's desire for Full Dialogue Partnership with ASEAN.

 

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Malaysia keen to increase trade with Pakistan: Consul General​

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.

 

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Russian Gazprom eyes role in Iran-Pakistan pipeline ​

Wednesday, 27 May, 2009

MOSCOW: Russian gas export monopoly Gazprom is keen to participate in a pipeline to carry Iranian gas to Pakistan, the Kommersant daily reported on Wednesday, citing company and government officials.

‘We are ready to join the project as soon as we receive an offer,’ Russia's deputy energy minister Anatoly Yankovsky told the daily.

The paper quoted another top government official as saying Moscow sees the pipeline as a means to divert Iranian gas from competing with Russian exports on the European market.

‘This project is advantageous to Moscow since its realisation would carry Iranian gas toward South Asian markets so that in the near future it would not compete with Russian gas to Europe,’ Kommersant wrote.

Russian exports satisfy over one quarter of Europe’s gas needs, but the European Union has sought to lessen its dependence with the construction of the Nabucco pipeline to pump Caspian Sea gas to Europe which would bypass Russia.

The multi-billion dollar Iran-Pakistan pipeline, which aims to pump an initial 11 billion cubic metres of Iranian gas per year to Pakistan, could deprive the Nabucco project of one possible source for gas supplies.

Gazprom spokesman Sergei Kupryanov confirmed the company’s interest in the project, Kommersant reported.

It cited an unnamed official in the company as saying Gazprom could serve as the pipeline operator or also participate in its construction.

The start date for construction of the much-delayed pipeline is planned for September 2009 to be completed in June 2014, the paper reported.

Iranian officials have said the supply of gas to Pakistan could begin in three to four years.

The pipeline project, when initially mooted in 1994, had proposed to carry gas from Iran to Pakistan and India. But India withdrew last year from the talks over repeated disputes on prices and transit fees.

The 900-kilometre pipeline is being built between Asalooyeh in southern Iran and Iranshahr near the border with Pakistan and will carry the gas from Iran's South Pars field.

Iranian officials said Monday that the final contract would be signed in three weeks. —AFP

 

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World Bank, GoP ink accord for strengthening NTCIP ​

ISLAMABAD (May 28 2009): World Bank and the Government of Pakistan on Wednesday signed an agreement for strengthening the National Trade Corridor Improvement Programme (NTCIP) amounting to $25 million in the Economic Affairs Division for the trade and Transport Facilitation Project-II(TTFP-2).

Under the Agreement, the World Bank committed the amount to support Government of Pakistan in the implementation of the NTCIP, and also to strengthen the institutional arrangements for NTCIP. The agreement was signed by Farrukh Qayyum, Secretary Economic Affairs Division on behalf of the Government of Pakistan and Yusupha B. Crookes, Country Director, World Bank on behalf of the World Bank.

The objective of the project is to improve the performance of Pakistan's trade and transport logistics by facilitating: (a) the implementation of the National Trade Corridor improvement Programme (NTCIP): and (b) the simplification and modernisation of the Pakistan's international trade practices and procedures.

The project will be implemented by the National Trade Corridor Management Unit (NTCMU) in the Planning Commission, and the Trade and Transport Facilitation Unit (TTFU) in the Ministry of Commerce and Trade. The Project closing date is December 31, 2013. The committed amount is a soft loan and Government of Pakistan will repay the credit in 35 years including 10 years of grace period. The credit is interest free, however service charges at the rate of 0.75 per cent per annum and commitment charges of maximum 0.5 per cent per annum on un-disbursed balance will apply.

Business Recorder [Pakistan's First Financial Daily]

 

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World Bank to give $25m soft loan for NTCIP ​

Thursday, 28 May, 2009 | 02:10 AM PST

ISLAMABAD: The World Bank has agreed to give a soft loan of $25 million for strengthening the National Trade Corridor Improvement Programme (NTCIP) and implementation of the Transport Facilitation Project-II (TFP-2).

Secretary Economic Affairs Division Farrukh Qayyum and World Bank Country Director Yusupha B. Crookes here on Wednesday signed the agreement.

The objective of the project is to improve the performance of the country’s trade and transport logistics by facilitating implementation of the NTCIP and the simplification and modernisation of the country’s international trade practices and procedures.

The government will repay the interest-free loan in 35 years including 10 years of grace period. However service charges at the rate of 0.75 per cent per annum and commitment charges of maximum 0.5 per cent per annum on un-disbursed balance will apply.

DAWN.COM | Business | World Bank to give $25m soft loan for NTCIP

 

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provide $50mn for Sindh irrigation projects ​

By Amin Ahmed
Wednesday, 27 May, 2009 | 08:11 PM PST |

RAWALPINDI: The International Development Association (IDA) of the World Bank Group has agreed to provide additional financing of 50 million dollars for improving water resource management and enhancing agricultural productivity under the Sindh On-Farm Water Management Programme (SOFWMP), official sources disclosed on Wednesday.

The proposed additional financing will focus in the areas of three participating area water boards (AWBs) of Nara Canal, Left Bank Canals and Ghotki Feeder. The total cost of the project will be 61.7 million dollars which will also include government financing of 2.7 million dollars and nine million dollars by local farmer organizations.

Sources said that the new IDA financing expected to be approved next month, will help improve the efficiency, reliability and equity of irrigation water distribution at water-course levels; support agricultural productivity enhancement measures to complement and enhance the benefits of improved water management, and enhance long-term financial sustainability of the irrigation system by fostering self-sustaining farmer organizations – Watercourse Associations – at the watercourse levels.

The original SOFWMP was approved and became effective in 2004 supporting the Sindh government in implementing five main components of the project. The total amount of credit provided was 61.14 million dollars. The project is currently rated as moderately satisfactory for both development objectives and implementation progress.

The watercourse improvement works completed under the Sindh On-Farm Water Management Programme (SOFWMP) and the National Programme for Improvement of Watercourses (NPIW) have already demonstrated the effectiveness of the intervention, especially in improving water supply and enhancing equitability of water distribution.

The project-related document says by 2010, all watercourses in the project area were expected to be improved under the ongoing NPIW. However, due to current Government budget crisis, and subsequent drastic cuts in funding, the implementation of NPIW has slowed down sharply during the fiscal year 2008-09. The inability of NPIW to complete the planned watercourse improvement works in the project area may prevent realizing the full benefits of Bank’s two ongoing projects in Sindh.

Providing additional financing to carry out the planned watercourse works in the project area would allow maximizing the overall development impacts of Bank-financed projects. Moreover, additional resources provided by the World Bank for watercourse improvement in the project area would give the Government the opportunity to reallocate some of previously earmarked funds to watercourse improvement to other equally important areas of NPIW in the province, thereby reducing fiscal strains on the Government programme.

Preliminary impact assessment and observations from field visits suggest that the improved watercourses under the project have made positive impacts in terms of enhanced and more equitable water supply and increased income by farmers, hence increasing the watercourse improvement activities would augment the positive development impacts of the project, says the report.

Both federal and provincial governments are fully committed to watercourse improvement interventions. In the wake of current fiscal crisis, the Federal Government has re-prioritized and streamlined its portfolio of ongoing and new projects and discontinued many programmes, which are considered to be of lower priority.

However, NPIW is still on Government’s list of high priority programmes and the Government is committed to complete it. During the past five years, the Government has accumulated considerable experience in implementing watercourse improvement works and has established effective and well-tested implementation mechanisms for the programme.

The entire institutional set-up and technical infrastructure of NPIW used for watercourse improvement works completed under the Project, are still in place and can be readily deployed for scaling-up activities. This will greatly facilitate the implementation process.

Under the component of watercourse improvement, around 2500 watercourses, comprising earthen improvements, lining, installation of concrete turnouts and culverts will be improved.For the enhancement of productivity, 11,000 hecates of farm land will be precisely leveld using laser-guided equipment in addition to development and dissemination of improved seeds, demonstration on tunnel farmling for high-value crops, training of farmers in improved water management and agricultural practices and new technology, and integrated pest management, and monitoring pesticide residue effects on crops.

DAWN.COM | Business | WB to provide $50mn for Sindh irrigation projects

 

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Foreign investors go wild on stocks​

Dilawar Hussain
Thursday, 28 May, 2009 | 01:33 AM PST

KARACHI: Foreign investors went wild on stocks at the KSE on Wednesday with about the highest one day sale and purchase so far this year.

Local individual and institutional investors, meanwhile, managed to keep their sangfroid.

Foreign investors bought $11.3 million worth of equity as the markets opened on a cheerful note following expected favourable decision in court cases against the two top politicians. But traders soon began to draw long faces due to avalanche of sell orders that started to descend as gory pictures of blood were splashed all over TV screens on the tragic Lahore bomb blast.

Net outflow of portfolio investment, therefore, also mounted to the tall order of $10.12 million. Traders said that foreign sell orders were fully absorbed by local investors and institutions, which was why the KSE-100 index managed to climb by 12 points for the day.

‘The investors were willing to pay cash for stocks (in the absence of the popular leverage product), which speaks well for the market,’ commented an analyst.

Stock strategist Mohammad Sohail at brokerage, Topline Securities observed that foreign activity, generated on both sale and purchase side could be taken as a sign of encouragement as it showed that the Pakistani equity market was on the international investment radar.

He said that the recovery in the international markets generated buy orders in large cap exploration stocks, while selling was witnessed in a couple of GDR related shares.

The analyst hoped that increase in foreign investor interest and the cut in PIB rates would help push equity prices up, going forward. PIB cut off yield stood down by 61 basis points to 12.63 per cent in the auction on Wednesday.

Scrolling back, analyst Ahsan Amir Ali at brokerage Invest and Finance Services could locate the previous massive foreign activity at the KSE on April 14.

Substantially lower than that on Wednesday, foreign funds had that day bought shares worth $7.7 million and sold them of the value of $8.2 million.

Analysts thought that major selling on Wednesday was in the heavyweight E&P stock, OGDC, while sale side was dominated by banks, particularly MCB and NBP.

There were no firm figures of foreign portfolio investment in the Pakistan equity markets, but some brokers consider it to account for 15 per cent of the free float.

‘I believe overseas investors still hold $1 billion worth of stocks in our markets,’ says Sohail at Topline Securities.


DAWN.COM | Business | Foreign investors go wild on stocks

 

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France offers buying office to textile sector​

Thursday, May 28, 2009

LAHORE: The government of France has offered the Pakistani textile sector to open a buying office in France to get business.

The French Commercial Counsellor in Pakistan Dominique Simon made this offer during his recent visit and meeting with the Faisalabad Chamber of Commerce and Industry (FCCI) and representatives of the textile associations.

The News has learnt that French Commercial Counsellor in his meeting with the textile sector stakeholders said that the industry had badly suffered due to energy crisis, increase in input costs and economic recession.

He offered the textile sector to open a combine buying house for whole textile sector of Pakistan and announced full support of French government in this regard. Dominique Simon offered facilitation for getting visas to people going to France for business purposes.

He mentioned in the meetings that the owing to trade facilities the Bangladeshi producers can send their products to all European markets. Contrary to this despite rich in quality, Pakistani products are not competing due to high cost and no special facility available to Pakistani producers.

Similarly, European companies have opened their buying houses in Bangladesh and quickly updating the Bangladesh textile industry about change in fashion. So every new fashion product is being produce in Bangladesh timely. However, due to law and order situation no businessman is ready to come to Pakistan. Thus in this scenario only one option is left with Pakistani textile producers to open a combine selling house in France which cater the needs of whole Pakistani industry.

The office would approach the fashion and garment companies in France, market Pakistani products and get orders. Similarly, it will timely update the textile industry about the changing fashions in France follow up the trends and fashions and call up the producers to stop production of any particular fashion product and start production of the new fashion product. Once the French companies build trust, starts business with Pakistani products they will also start coming in Pakistan as the law and order situation would change as well.

The French Commercial Counsellor during his meetings with textile stakeholders showed his government full support to Pakistani industry. He also mentioned that a delegation of French businessmen would come in September 2009 and meet with the textile industry stakeholders.

 

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new development schemes in 2009-10.​

The main chunk of the Rs400 billion will be spent on the ongoing development projects.”​

The meeting will also approve enhancing powers of Central Working Development Party (CDWP) to approve projects valuing Rs1 billion, as under the existing powers the CDWP can approve projects worth Rs500 million only. The official said that because of the massive depreciation of Rupee, the cost of Rs500 million has swelled manifold.

This is the main reason from which the said proposal is going to be recommended to NEC for approval.

The meeting will also review the Public Sector Development Plan for 2008-09 and approve PSDP for 2009-10.

The government has prioritised various sectors, which will be having the focus in next year development budgetary plan.

The social sector has been put at top on priorities list and then comes water, electricity, agriculture and infrastructure sectors. These sectors development will ensure the economic activities in the country.

The four provinces would also come up with their development plans, which will be accorded approval after through discussion.

 

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NEC to okay development budget on June 4 with 3.3pc growth ​

Thursday, May 28, 2009

ISLAMABAD: The National Economic Council (NEC), which was scheduled to meet on June 1, will now meet on June 4 with Syed Yousuf Raza Gilani in the chair and approve the development plan for budget 2009-10 with 3.3 per cent GDP growth target for next fiscal year, a senior official told The News

The Annual Plan Coordination Committee (APCC) has already recommended development budget outlay of Rs600 billion, which includes federal share of Rs400 billion and provincial share of Rs200 billion.

However, sources in the Ministry of Finance said that the size of proposed development budget may be slashed to Rs559 billion as per agreement reached with the International Monetary Fund (IMF) during the last Dubai talks when the Fund revised the fiscal deficit target from 3.4 to 4.6 per cent.

When contacted Shaukat Tarin, who is in Karachi told The News “no doubt we have agreed at Rs559 billion development budget with the IMF, and we stick to it, but over Rs30 billion will be added to the development budget for IDPs and Rs10 billion for FATA which is why the PSDP size swells to Rs600 billion.”

According to Planning Commission Deputy Chairman Sardar Assef Ahmad Ali, “the government has this time managed to get the fiscal space in the range of Rs85 to Rs 90 billion, that will be allocated on new development schemes in 2009-10.

The main chunk of the Rs400 billion will be spent on the ongoing development projects.”

The meeting will also approve enhancing powers of Central Working Development Party (CDWP) to approve projects valuing Rs1 billion, as under the existing powers the CDWP can approve projects worth Rs500 million only. The official said that because of the massive depreciation of Rupee, the cost of Rs500 million has swelled manifold.

This is the main reason from which the said proposal is going to be recommended to NEC for approval.

The meeting will also review the Public Sector Development Plan for 2008-09 and approve PSDP for 2009-10.

The government has prioritised various sectors, which will be having the focus in next year development budgetary plan.

The social sector has been put at top on priorities list and then comes water, electricity, agriculture and infrastructure sectors. These sectors development will ensure the economic activities in the country.

The four provinces would also come up with their development plans, which will be accorded approval after through discussion.