Pakistan Economy - News & Updates - Archive

[Neo]

March 28, 2007
Inflation and gas, power shortage pose risks: ADB

By Ihtasham ul Haque

ISLAMABAD, March 27: The growing current account deficit, continuing high inflation, and the emerging power and gas shortages are potential risks to the country's medium-term economic prospects, warns the Asian Development Bank (ADB).

Any deterioration in the security environment would be another danger. In addition, the ending in 2008 of People’s Republic of China’s specific safeguards imposed by the US and EU against textile and clothing imports could further weaken Pakistan's textile export prospects, maintains the Asian Development Bank Outlook 2007, issued here on Tuesday.

It says that still important structural challenges remain and have to be tackled promptly to sustain the present growth trend. Despite healthier investment, it notes that the investment-to-GDP ratio is still low in comparison to countries that have experienced sustained strong growth.

Similarly, gross savings as a share of the GDP needs to pick up substantially. In recent years, the demand-driven growth and negative real interest rates on bank deposits have contributed to low savings. Another issue is the narrow industrial base, which is linked to the lack of a diversified export base, which in turn must cope with rising international competition, the outlook notes

It says human capital development remains a major structural challenge. The government is tackling these structural challenges over the medium term by committing to reform, by strengthening the enabling environment for investment, and by prioritising resource allocation for infrastructure development and the social sectors.

About the future economic prospects, the ADP says the prognosis for 2006-07 and 2007-08 is based on assumptions that the authorities will continue, or perhaps strengthen economic reforms of recent years, and they will press on with relieving the macroeconomic stresses that have emerged in the last couple of years.

It is assumed that the central bank will continue its tight monetary policy and pursue a flexible exchange rate policy. Globally, economic growth in the United States and the European Union, the country's two largest trading partners, is assumed to slow somewhat, as is the growth of world trade volume, the report observes.

It says the sharp rise in investment last year and moderation in oil prices are expected to boost growth in 2006-07. However, shortages of natural gas and suspension of its supply to a number of industrial units to meet the rising demand for household consumption (because of exceptionally cold weather) will likely depress industrial growth which, along with the ongoing slowdown in exports, will dampen the expansion.

The report says that agriculture and manufacturing sectors have improved in the first half of 2006-07 and services appear to be growing robustly, but somewhat less quickly than last year’s.

With developments to date, the economy is projected to grow by 6.8 per cent in 2006-07, a solid expansion, but essentially unchanged from a year ago. In agriculture, production of the major summer crops in 2006-07 has shown improvement. The higher offtake of fertilizers and a substantial increase in production loans for agriculture, as well as greater availability of water, all augur well for winter crops.

http://www.dawn.com/2007/03/28/top13.htm

 

[Neo]

Wednesday, March 28, 2007

Headline inflation fell to 7.4% in Feb

By Arshad Hussain

KARACHI: The headline CPI inflation declined to 7.4 percent in February 2007 on a year-on-year (YoY) basis from 8 percent registered in the same month of last year. During January, the inflation was around 6.4 percent.

The country’s food inflation has once again touched a double digit to 10 percent in Feb 2007, as compared with 8.7 percent in January, driven mainly by an increase in prices of different types of rice, fruits including kinnow, mausambi and apple.

A report prepared and released by the State Bank of Pakistan (SBP) on Tuesday said: “The weight of these items is 4.6 percent of the total food group. Food inflation has been within double-digit range apart from remaining at single digit only during January 2007 since August 2006.” The main contributing factor for this rise in the CPI was food inflation, which was 1.3 percentage points more than that of the previous month.

The headline CPI inflation declined to 7.4 percent in February 2007 on a year-on-year (YoY) basis from 8 percent registered in the same month of last year. During January, the inflation was around 6.4 percent.

The SBP said food inflation rose to 10 percent in February 2007 from 7.5 percent last year, while non-food inflation declined to 5.6 percent in February 2007 from 8.4 percent a year earlier.

The report said eight-month annualized period average rate of CPI also showed a decline in overall inflation during July-February 2006-07, as compared with the same period last year. However, similar to YoY trend in February 2007, period average indicated a rise in food inflation and a fall in non-food inflation.

Year-on-year CPI Inflation rates in February 2007, when compared with rates in January 2007, show upward movements in the overall inflation as well as in its two broad components of food and non-food inflation. This is mainly due to an unusually high one-month increase (February over January) in CPI and its components. Overall, CPI increased by 1 percent, which is twice the five-year average of January-February increase. The extent of one-month increase in food inflation is close to five-times of the five-year January-February increase, the report said.

The SBP said increase in one-month non-food inflation is only one-third higher than the respective five-year average

Core inflation (non-food non-energy) also declined to 5.7 percent in February 2007 from 7.0 percent in February 2006 on YoY basis, while core inflation based on 20% trimmed-mean CPI remained the same during this period. Nevertheless, the declining trend in both measures of core inflation is clearly visible in terms of eight-month annualized period average rates as well as twelve-month moving average rates.

The wholesale price inflation (WPI) declined to 5.1 percent in February 2007 on YoY basis from 9.9 percent in the corresponding month last year. This significant decline in WPI was due to sharp deceleration in non-food inflation during February 2007 compared to the corresponding month of last year. In contrast with CPI and WPI, sensitive price indicator (SPI) increases to 8.8 percent in February 2007 on YoY basis from 7.4 percent in February 2006.

Trend rates of inflation continue to be on a downward direction, although the pace of downtrend remains sluggish. Twelve-month moving average rates in overall CPI and its broad categories of both food and non-food indices share this direction, unlike the YoY and period average rates that showed an upward movement in food inflation, the SBP said. Trend rate in CPI declined to 7.7 percent in February 2007 from 8.9 percent a year earlier.

http://www.dailytimes.com.pk/default.asp?page=2007\03\28\story_28-3-2007_pg5_1

 

[Neo]

Wednesday, March 28, 2007

ADB sees Pakistan’s growth rate at 6.5%-7% in 2007 and 2008

By Sajid Chaudhry

ISLAMABAD: Pakistan’s economy is projected to post a growth rate of about 6.5% to 7% in 2007 and 2008. The economy is expected to pick up slightly in FY2007, reflecting some strengthening in agriculture and manufacturing. Inflation is set to moderate after a further tightening of monetary policy. Spurred by an expansionary pro-growth fiscal policy, the budget deficit will widen slightly as will the current account deficit.

This has been highlighted in Asian Development Outlook (ADO) 2007 released on Tuesday. The report of Pakistan projects that the prognosis for FY2007 and FY2008 is based on the assumptions that the authorities will continue, or perhaps strengthen, the economic reforms of recent years, and that they will press on with relieving the macroeconomic stresses that have emerged in the last couple of years. It is assumed that the central bank will continue its tight monetary policy and pursue a flexible exchange rate policy. Globally, economic growth in the United States (US) and the European Union (EU), the country’s two largest trading partners, is assumed to slow somewhat, as is the growth of world trade volume.

The sharp rise in investment last year and moderation in oil prices are expected to boost growth in FY2007. However, shortages of natural gas and suspension of its supply to a number of industrial units to meet the rising demand for household consumption (because of exceptionally cold weather) will likely depress industrial growth, which along with the ongoing slowdown in exports, will dampen the expansion. Agriculture and manufacturing have improved in the first half of FY2007, and services appear to be growing robustly, but somewhat less quickly than last year.

With developments to date, the economy is projected to grow by 6.8% in FY2007, a solid expansion but essentially unchanged from a year ago. In agriculture, production of the major summer crops in FY2007 has shown improvement. The higher off take of fertilizers and a substantial increase in production loans for agriculture, as well as greater availability of water, all augur well for winter crops. The new package of incentives for livestock, announced in the FY2007 budget, and high prices of livestock products throughout last year, will also boost livestock production. Agriculture is projected to grow by 4.0% in FY2007.

Large-scale manufacturing, which constitutes almost half of the value added in industry, is expected to grow by 8.6%, supported by incentives provided in this year’s budget. Growth in textiles and clothing, however, is expected to soften, on lower than targeted output of cotton and weakening export demand. Hydropower generation will be bolstered by greater rainfall and availability of water in the two main water reservoirs. In all, industrial growth should pick up to 8.6%.

In services, rising foreign investment in telecom and privatization of the Pakistan Telecommunication Company last year will help sustain vigorous growth. Strengthened by reforms, privatization, and ongoing mergers and acquisitions, the financial sector is expected to stay lively. It will be further spurred by the planned flotation of new global depository receipts for some financial institutions. However, the growth of wholesale and retail trade will slow because of decelerating exports and imports. Services as a whole is projected to grow by more than 7% in FY2007, somewhat off last year’s fast pace.

In FY2008, on the back of the expected continuing strength in services and stable growth in manufacturing, GDP is projected to slow slightly to 6.5%. This is still solid performance but less than the projected 7.6% in the Government’s Medium-Term Development Framework. The buildup of macroeconomic imbalances and the consequent tight monetary conditions, emerging capacity constraints, infrastructure bottlenecks, and issues of competitiveness in exports of textiles and clothing—on which the economy is over dependent are some of the key constraints to reaching the Framework’s target.

Inflation is expected to decline further in FY2007, under the weight of continued tight monetary conditions. After resisting demands for cutting domestic prices of petroleum products for 9 months, the Government finally lowered these prices in January 2007. This will have a damping effect on prices throughout the economy in the coming months, as will the slower monetary growth last year. But, because of the upsurge in food prices and higher prices of raw materials, inflation is projected at 7.0%, above the central bank’s target of 6.5%. Sustained tight money is likely to take inflation down to 6.5% in FY2008.

With projected strong GDP growth, ongoing tax reforms, extension of the tax net to real estate transactions, and higher tax rates on some financial services in the FY2007 budget, tax receipts are expected to maintain double-digit growth and be above the budget target. Despite a decrease in the domestic oil price, the petroleum levy will likely continue to yield significant income, as will receipts from the US for logistics support operations for Afghanistan. Current expenditures, though, are expected to exceed the budget estimate, because of expected overruns in the interest payment on domestic debt. On balance, the fiscal deficit is likely to rise to 4.5% of GDP in FY2007, coming in at the planned level.

Import growth is set to decelerate in FY2007, on account of moderation in the oil import bill, weaker demand for consumer durables, and some rundown from an apparent buildup of inventories in FY2006. Nevertheless, sustained growth and the forecast rise in investment are projected to keep import growth at about 9%. Exports too will rise, but the high domestic cost of production in the textile and garment sector as well as stiff competition from the People’s Republic of China (PRC) and India are likely to restrict total export growth to about 8.0%. The current account deficit is projected to edge up to $6.5 billion, or 4.5% of GDP in FY2007. With the expected stabilization in GDP growth, cooling demand for consumer durables (on higher interest rates), and softening in oil prices, import growth is likely to be moderate in FY2008. As a result, the current account deficit could decline to $6.0 billion, or 3.9%.

In an environment of pro-growth government policies, a continuous increase in the public sector development program, and the projected rise in investment, the medium-term outlook for the economy is positive. Greater trade volumes with countries in the region, including the PRC, will also help. The boom in banking and telecom is likely.

Over the past 5 years, merchandise exports have delivered over 12% average annual growth, as they have benefited from an enabling policy environment, low inflation, the low cost of credit, and general upturn in economic activity. In FY2005 and FY2006, they grew by 16.6% and 15.4%, respectively, but started decelerating in the second half of FY2006, to just over 6.5%, and to 5.0% in the first half of FY2007. Some of the deceleration stems from the high base effect, but the underlying causes appear structural.

The main issue is exports’ heavy reliance on textiles as well as limited geographic diversification. Between them, textiles and clothing, cotton, leather, rice, and sports goods account for over three quarters of total exports—textiles and clothing alone for three fifths. Thus a downturn in these segments has a significant overall impact.

Conversely, immediately after the ending of quotas, textile exports accelerated strongly, to 16.8% in FY2006 from 6.6% the year before. Increasingly, however, textile exports have come under competitive pressure from

Bangladesh, People’s Republic of China, and India, specifically in the higher value-added categories that have traditionally not been a strength of the Pakistani textile sector. This pressure, in turn, has led to a fall in international export prices. Consequently, Pakistani textile exports increased by only 4.3% by value in the first half of FY2007 (Box table). The low expected cotton production in 2007 would further hit textile exports, as will the removal of restrictions on textile exports from the People’s Republic of China in 2008.

Another issue is that the bulk of Pakistan’s trade is with a handful of countries, particularly in Europe and North America. It is expected that the growth in trading volumes in those regions will decline in 2007, hitting Pakistan’s exports there.

Thus, lack of export diversification—for products and markets—is the main reason for recent sluggish performance. Trade policy should therefore focus on developing strategies for diversification and enhancing export competitiveness.

Export growth of major commodities to continue, as the policy environment for these sectors is favorable. Foreign hydrocarbons investments in recent years will have an output payoff. Finally, significantly strengthened through reforms and mergers and acquisitions, the banking system is well positioned to better channel savings to productive uses. The growing current account deficit, continuing high inflation, and the emerging power and gas shortages are potential risks to the country’s medium-term economic prospects. Any deterioration in the security environment would be another. In addition, the ending in 2008 of PRC-specific safeguards imposed by the US and EU against textile and clothing imports could further weaken Pakistan’s textile export prospects.

http://www.dailytimes.com.pk/default.asp?page=2007\03\28\story_28-3-2007_pg5_2

 

[Neo]

Wednesday, March 28, 2007

‘Pakistan an economic success story’

NEW YORK: Pakistan’s permanent representative to the United Nations said on Monday that as a result of economic policies and structural reforms over the last few years, there had been a 7 percent growth in Pakistan’s economy, revenue collection had increased and poverty has fallen from 35 percent to 24 percent.

Ambassador Munir Akram – attending a discussion as a keynote speaker on ‘Inside Pakistan’, organised by Pakistani students from the City College of New York and the Pakistani-American Leadership Centre at the Columbia University – said that a business could now be established in Pakistan within 24 days. He said that foreign investors’ confidence in Pakistan’s economy could be determined from the fact that nearly $3.9 billion had been received as foreign direct investment over the last nine months, and the UAE alone had committed to invest $50 billion in the country over the next five years. “We need to expand exports by diversification and value addition,” he added.

Akram said Pakistan was now the fifth largest country in terms of population, a nuclear weapons state and a strong military power capable of defending its national frontiers.

He said that women in Pakistan enjoyed representation in all tiers of the government, and referred to recent legislation aimed to remove injustices against women.

Progress had also been made in education, and efforts were being made to build a moderate, tolerant and progressive Islamic society as envisioned by Quaid-e-Azam, he said. “We are an Islamic state, not a theocratic state. We are playing a leading role in the global war on terror,” he said, adding that the Al Qaeda network had been dismantled, and Pakistan was now engaged in dealing with the resurgent Taliban. The Pakistan government’s agreement with tribal elders from North Waziristan – essentially an exchange of peace for development – was “working and has brought relative calm to the area”.

He said that the surge in Taliban attacks had no connection with the North Waziristan agreement. The ambassador said that while Pakistan’s location provided great economic opportunities, it was also faced with huge challenges, both external and internal. He briefed the audience on the progress made in the Indo-Pak composite dialogue process, citing a number of confidence-building measures agreed by the two.

Kashmir was the most difficult of the issues, he said, adding that President Gen Pervez Musharraf had floated several ideas to break the deadlock. He was hopeful that the two countries would find a mutually acceptable solution to the dispute.

Replying to a question about a presidential reference against suspended Chief Justice Iftikhar Mohammed Chaudhry, Akram said that the president had acted according to the constitution, and now the matter was in the hands of the Supreme Judicial Council. He said that Pakistan was concerned over the Tehran-Washington confrontation, and hopes that the problems between the two countries would be resolved through diplomacy.

http://www.dailytimes.com.pk/default.asp?page=2007\03\28\story_28-3-2007_pg7_13

 

[Neo]

Trade deficit projections expanded to $13.4 billion

ISLAMABAD (March 29 2007): The government has once again revised trade deficit projections to $13.4 billion against the original target of $9.4 billion set for the current fiscal year.

Official documents, prepared separately by Commerce Ministry and Planning Commission, copies of which are available with Business Recorder, suggest that monetary policy is one of the major reasons behind this soaring trade deficit.

Commerce Ministry, which is apparently being kept away from the decision-making process on monetary policy, has projected imports of $31 billion during the current year.

"If the average trend in July-February 2006-07 remained intact during the coming months of the current fiscal year, imports may reach $31 billion against the projections of $28 billion," Commerce Ministry documents say.

The Planning Commission has expressed serious concerns over the slow growth in exports, which has mainly contributed to high cost of doing business, stiff competition between the competitors over government subsidies and other incentives.

"About $1 billion shortfall is likely in exports against $18.6 billion target for the current year," the Commission anticipated in its documents. The Commission has also expressed apprehension that the current state of exports, high cost of doing business, and some other factors might slacken the GDP growth rate, though only marginally.

The Commission is also of the view that several firms, especially in the textile sector, might be closed down, leading to increase in portfolio of non-performing loans, and their revival would be a costlier proposition.

If the picture remains the same, as the Planning Commission has painted in its documents, Pakistan's share in the international market would further dip and then it would be difficult to recapture it in the future.

While justifying unforeseen growth in imports, Commerce Ministry has argued that Pakistan's economy has been growing at a high rate for the last couple of years, as the GDP growth in 2005-06 was 6.6 percent, with 7 percent projection for 2006-07. The Ministry has further elaborated that with the increase in disposable income, demand for imports would also increase.

"Our imports are inelastic because they consist mainly of machinery, raw material, petroleum products and food items which cannot be curtailed without impacting economic growth and prices. These imports are essential for sustaining economic growth and stabilisation of prices by augmenting the supply position," Commerce Ministry said.

As Pakistan is following a liberal trade regime, in line with the World Trade Organisation (WTO) system, restriction on imports are neither feasible nor beneficial for the economic health of the country, it opines.

Commerce Ministry, which is not being consulted on monetary policies, has made it clear that fiscal, monetary and exchange rate policies are formulated by other ministries and organisations, such as Finance Ministry and State Bank of Pakistan, keeping in view the overall economic position of the country.

http://www.brecorder.com/index.php?id=544234&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Increased foreign debt not to upset debt-GDP ratio: SBP governor

KARACHI (March 29 2007): The Governor of State Bank of Pakistan, Dr Shamshad Akhtar has said that the increasing government borrowing is not a matter of concern for the economy as it is procured on relaxed conditions and more importantly, not causing any increase in the debt-GDP ratio.

"As long as the debt is cost effective and the debt-to-GDP ratio is not rising, it is not an issue to worry about. Our debt is increasing but the GDP is also increasing, so it is not at all alarming for the economy," she remarked.

Talking to APP, Dr Akhtar said the government, after achieving sufficient fiscal space, went for aggressive public investment program of 7.3 billion dollars, a growth of 32.2 percent in real terms, which constituted 28 percent of the total expenditures.

At the same time, liberal and diversified availability of private sector credit stimulated growth across the board in a number of sectors. The emergence of Pakistan economy as one of the most growing economies of this region is the result of all this development, she added.

She said growing investment and consumption demands and requirements have widened trade deficit, as imports grew by over 35 percent in the preceding two years (FY05-06). While macroeconomic imbalances enhanced demand pressures, they have stimulated economic growth to 7.4 percent on average over FY05-07.

Dr Akhtar stated that a combination of policies and availability of foreign inflows supported by enhanced investor confidence and presence of global liquidity helped manage macro-economic stability. Talking about the impact of the availability of the credit to the private sector and other segments of the economy, the Governor SBP said the private sector credit has grown over Rs 400 billion, creating enormous demand and growth of corporate sector.

http://www.brecorder.com/index.php?id=544240&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

'New technologies to soar discoveries rate of oil, gas'

ISLAMABAD (March 29 2007): Minister of State for Petroleum and Natural Resources, Mir Mohammad Naseer Mengal on Thursday called upon the petroleum engineers and geo-scientists to equip them with latest technologies and advancement emerging on the globe to increase the existing success rate in oil and gas discoveries.

"This would help minimise the expense on exploration and production activities," he said this while addressing the concluding session of a two-day Annual Technical Conference of Society of Petroleum Engineers (SPE) and Pakistan Association of Petroleum Geo-scientists (PAPG) here.

The conference was attended by more than 1000 petroleum engineers and geo-scientists from home and abroad besides heads of geological and petrochemical department of the universities and students.

The Minister said the government has embarked upon an ambitious energy plan to meet the growing energy demand by utilising the untapped hydrocarbon and alternate resources for sustaining the GDP upward trend.

He said the country has still 6,27,000 sq km sedimentary unexplored onshore and offshore area and the geo-scientists and petroleum engineers should employ their best abilities to identify and discover the hidden potential for accelerating the pace of socio-economic uplift.

In his concluding remarks, Chairman, Pakistan Association of Petroleum Geo-Scientists Tariq Khamisani said there was a need to establish "centres of excellence" in this country which can produce top-quality professionals in the fields of petroleum engineering and geology.

Later, the Minister gave away cash awards to students of petroleum engineering belonging to Mehran University and University of Engineering Technology for presenting papers.

http://www.brecorder.com/index.php?id=544318&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

500 MW of electricity to be imported from Iran

ISLAMABAD: Prime Minister Shaukat Aziz has accorded approval to carrying out a feasibility study for the import of 500 megawatt (MW) of electricity from Iran to cater to the nation’s increasing energy demands.

The government is likely to enhance the import of electricity from Iran up to 1000 MW over time. The Ministry of Water and Power has convened an important meeting of Wapda’s top officials on Friday to discuss the nitty-gritty of this major project.

Water and Power Minister Liaquat Jatoi would chair the meeting. “Out of 500 MW, some electricity may be allocated to Gawadar port,” the official said.

Pakistan has already inked a deal to import 100 MW electricity from Iran at the rate of 6.25 cents per unit. However, “we are currently importing 39 MW of electricity from Iran at the revised rate of 5 cents per unit for Taftan and Mashkhail ó the border areas of Balochistan.

“We have started negotiations with Iran for import of 500 MW more in view of the massive demand of electricity in the duty-free Gwadar Port in the years to come,” sources in Wapda told The News.

Apart from this, the government is also planning to install a 100 MW power generation plant in Gwadar port. “We are vigorously working on this scheme.”

To a question, the official said that Pakistan had first imported electricity sometime in 2002 at the rate of 3 cents. After the three-year contract, Iran has now raised power tariff by 5 cents per unit.

“Currently we are importing 39 MW of electricity exclusively for the border areas of Balochistan where Wapda’s power transmission and distribution network is not available,” he said.

“Now we have recently inked the deal to import 100 MW of electricity from Iran for which the ECC has also approved the purchasing rate of 6.25 cents.

The official said that the former WAPDA chairman Lt-Gen (retd) Zulfiqar Ali Khan first visited Iran in July, 2002, to negotiate the tariff rates and ultimately struck a deal for electricity import at 3 cent per unit (Rs1.80 per unit) under the three-year contract. “After the expiry of the contract, the tariff has been revised up to 5 cents.”

http://www.thenews.com.pk/daily_detail.asp?id=48776

 

[Neo]

India outpaces Pakistan in boosting cotton yield

By Mansoor Ahmad

LAHORE: India, using hi-tech cotton research, has increased its cotton production by more than 200 kg per hectare since 1991 while Pakistan during this period could be able to raise cotton production by 54 kg per hectare.

Cotton is the only crop where Pakistan enjoys huge productivity advantage over India. The International Cotton Advisory Committee, in its data, reveals that in 1991 average per hectare yield of cotton in India was 267 kg compared to 615 kg in Pakistan. In 2006, per hectare production of India shot up to 470 kg while Pakistan boosted the yield to 679 kg. This shows that India is rapidly narrowing the production gap with Pakistan.

Presentations made by various cotton research institutes of Pakistan to the spinners and farmers reveal that the main thrust of these institutes is still on developing normal pest-resistant varieties that after a few sowings become vulnerable to pest attack, which can destroy a sizable chunk of the crop.

The data provided by Pakistani scientists reveals that after India Pakistan has the lowest per hectare yield of cotton. Pakistan obtains 679 kg of cotton lint per hectare compared to 1,864 kg in Australia, 1,571 kg in Syria, 1,312 kg in Mexico and 1,289 kg in Turkey.

Cotton crop in Pakistan is cultivated by using normal seeds and biotech cotton has not yet been introduced in the country. India has an area of 3.8 million hectares cultivated with BT cotton.

Indian farmers, according to Dr Yusuf Zafar of PAEC Faisalabad, have additionally benefited to the tune of $463 million by growing biotech cotton as its yield has increased by 46 per cent in the last five years. He said that Pakistan was still in the process of awarding regulatory approval for sowing BT cotton.

However, most of the cotton-growing countries have shifted 30 to 40 per cent of the crop to BT cotton.

The condition of soil in Pakistan is far from satisfactory as it has an adverse impact on all crops including cotton. Director Cotton Research Institute Multan Muhammad Arshad said most of the soil in the country was affected by saline. Shortage of irrigation water leads to more sowing on saline soils while 70 per cent of underground water is marginally fit for irrigation purpose. To tackle the situation, he called for immediate corrective steps to improve the quality of soil.

Cotton scientists and researchers have given a detailed analysis of the current cotton crop situation and its future prospects, saying the local industry would need 20 million bales of cotton by 2020.

There are 10 cotton research institutes and sub-stations operating in Punjab. Except for one or two, most are still conducting research to develop normal seed varieties for cotton.

Comparing cotton yields of different provinces, it becomes evident that cotton yield in Punjab is lower than that of Sindh. In 2006-07, Sindh increased its yield to 895 kg per hectare while Punjab could obtain 689 kg.

As far as research is concerned, the activity to develop normal disease-resistant cotton varieties seems to be very slow as since the year 2000 only three new seed varieties have been released by researchers for cultivation.

In 2006-07, cotton has been sown over 2.951 million acres against the target of 3.25 million acres. Total production is estimated at 12.41 million bales against earlier projection of over 13 million bales.

Despite current gloomy situation, the researchers expect Punjab will produce 16 million bales of cotton by 2014 and its yield will increase from 22 maunds per acre to 33 maunds.

Pakistan made rapid gains in cotton production from 1947 to 1991 during which output increased four times from 160 kg per hectare to 615 kg. After that, the increase in production has been painfully slow.

http://www.thenews.com.pk/daily_detail.asp?id=48781

 

[pma_lc120]

HI GENTLEMEN.....HOW ARE YOU?????

 

[EagleEyes]

HI GENTLEMEN.....HOW ARE YOU?????

Looks like your new to this. Check the FAQ mate.

https://defence.pk/forums/faq.php

Thanks.

 

[Janbaz]

Exports to Switzerland up by 45.5 per cent

ISLAMABAD (APP) - Pakistan’s exports to Switzerland grew by 45.5 per cent in 2006 over the previous year after remaining stagnant for the last several years.
Figures compiled by the commerce ministry indicated that exports rose sharply during 2006 to 67 million Swiss francs (CHF) in 2006 from 46 million Swiss francs in 2005. A positive aspect of this growth was manifold increase in export of non-traditional items, private TV channel reported.
These included ethanol, which jumped from Swiss Francs 25,400 in 2005 to Swiss Francs 12 million in 2006, a surge of 47,500 per cent. As a result, Pakistan became the second largest supplier of these products to Switzerland after China.
Textiles remained the largest exports with 50 per cent share, which increased from Swiss Francs 24.9 million in 2005 to Swiss Francs 33.1 million in 2006. Home textiles and clothing (other than knitwear) were the main items. Swiss companies imported these items from Pakistan, selling them in Switzerland and Europe under their own brand names and designs.
Leather items, especially bags and gloves, increased modestly by 5.5 per cent to Swiss Francs 1.9 million, sports goods and footwear, including gaiters and parts, both increased substantially by 72 per cent to Swiss Francs 2.2 million and Swiss Francs 1.2 million, respectively.

The Nation.
http://www.nation.com.pk/daily/mar-2007/30/bnews7.php

 

[Arjun Singh]

i think forneigner should invest in pakistan..there is general concept that pakistan is a dangerous country..but the reality is that its not as dangerous as it is portraiyed...

 

[Janbaz]

i think forneigner should invest in pakistan..there is general concept that pakistan is a dangerous country..but the reality is that its not as dangerous as it is portraiyed...

Totally agree with you. The country yes is a bit shaky politically but that should not harrass investors. As they can see the country has experinced tremendous growth over the past few years and is predicted to grow further. The Gwadar port will allow us to dominate over some of the world's most valueable trade routes and with the railway being built with China we are only expected to progress further.:toast:

 

[Janbaz]

Indo-Pak trade may touch $9bn

By Khalid Mustafa
ISLAMABAD: The trade between India and Pakistan could be as great as US$9 billion against the existing annual trade of $1 billion, the bulk of which is routed through Dubai, in case the existing barriers are lifted.

The World Bank said this in its special web page that has highlighted the challenges and opportunities for closer regional cooperation in South Asia ahead of the SAARC Heads of State Summit in New Delhi on April 3 to 4. “Trade between South Asian countries would grow substantially if they just open borders to each other on a genuine Most Favoured Nation (MFN) basis.”

The Bank also pinpoints that in the case of India and Pakistan, political tensions virtually closed official international trade between them. The web page also highlights that the cost of trade across borders in South Asia is the highest in the world. “Intra-regional trade is less than 2 per cent of GDP, compared to more than 20 per cent for East Asia.

It takes on average more than 33 days to export from South Asia compared to 12 days from OECD countries and more than 46 days to import into South Asia compared to 14 days for OECD.

Mentioning about the opportunities in the trade, the Bank said: “Trade within South Asia can be more than double if appropriate regional agreements on roads, rail, air, and shipping are put in place.”

About challenges, the Bank says: “The manufacturing sector in South Asia must become more competitive and grow more rapidly. India’s and Bangladesh’s share of industry in GDP is around 20 per cent; in Korea, it’s 41 per cent; in China, 48 per cent.”

More workers could be hired in South Asia’s manufacturing sector. Employment in Indian manufacturing actually fell between 1996 and 2002. Restrictive labour regulations were the main cause. A high proportion of firms in Sri Lanka hire fewer than 15 workers in order to avoid paying an average of 175 weeks of severance pay to separate workers.

A substantial share of South Asia’s labour force is relatively low skilled, living in rural areas, and involved with agricultural activities. For South Asia to successfully shift underemployed workers out of agriculture into higher productivity activities in the manufacturing and services sectors, it will need to make investments to increase both physical and human capital stocks.

Without the appropriate physical infrastructure, and human skills, the structural transformation of South Asia will be hampered. Growth rates of about 6 per cent per year in South Asia are consistent with maintaining investment rates o f 23-24 per cent of GDP, the average in recent years. However, increasing the region’s growth rate to 10 per cent will require increasing the investment rate to more than 35 per cent.

With regard to challenges about infrastructure, it said: “South Asia ranks the last among all world regions in terms of road density, rail lines, and mobile tele-density per capita.”

“Many of the region’s competitors have dramatically reduced customs and port clearance times. South Asia risks being left behind. Poor transport and communications still hinder the integration of many rural areas into the wider economy.”

Presently, the trucks of one country are not allowed across the border to deliver cargo, with the exception of Nepal, which allows Indian trucks to stay for 72 hours.

Bilateral or regional arrangements are needed which allow the vehicles of one country to collect/deliver cargo. The special web page maintained that perhaps the most important, but also the most difficult, is negotiation of effective bilateral and multilateral trade and transit agreements. These would facilitate trade in a more diverse range of goods.

On challenges about water issues in South Asia, the World Bank says: “The South Asia region is characterised by numerous international river basins, many of which are shared with countries beyond the region.”

Cooperation is an important objective that will support growth and peace. Cooperation can yield major benefits from the river including increased irrigated agriculture and hydropower production.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48962