Pakistan Economy - News & Updates

[Neo]

Rs10.35bn approved for FATA ADP ​

Thursday, July 16, 2009

PESHAWAR: A high-level meeting on Wednesday approved Rs10.350 billion for Annual Development Programme 2009-10 of the Federally Administered Tribal Areas (FATA).

NWFP Governor Owais Ahmed Ghani presided over the meeting and attended by FATA parliamentarians, FATA additional chief secretary, secretary to the governor, FATA P&D secretary, political agents, DCOs and heads of FATA line departments.

The meeting was informed that the federal government had allocated Rs11.50 billion for FATA development during the current financial year out of which Rs1.15 billion would be spent by FATA development authority leaving behind Rs10.350 billion for FATA Annual Development Programme to be executed through the line departments of FATA secretariat. 90 per cent of the total outlay amounting to Rs9.265 billion have been allocated for ongoing projects and Rs1.18 billion, 10pc of the total development budget, will be spent on the new development schemes.

Under agency-wise allocation, the highest amount of Rs1.567 billion had been allocated for South Waziristan Agency followed by Rs1.186 billion for North Waziristan Agency. Similarly, the highest amount of Rs3.20 billion under sector-wise allocation is earmarked for the communication sector followed by Rs2.20 billion for education.

Similarly, realistic cost estimates have been prepared so that all schemes should be completed in two years. The meeting thoroughly discussed the ADP proposals and the proposals from the parliamentarians.

The governor while talking on different points said the situation in FATA was now becoming conducive for carrying out the development process that now onward progress and development of FATA would be mainly focused. He directed the officials to ensure full utilization of funds and speedy completion of projects.

Ghani said quarterly review meeting would be held in order to see progress on each and every development project. The slow moving projects, he added, would be revisited and funds would be reallocated for fast-moving projects.

He said under ADP, funds allocation had been made under an agreed formula, which, he added, was only for ADP allocations. About consultation with FATA parliamentarians, the governor said the process was continuing at various forums, adding that elected representatives were being involved in the process at the agency level as well.

The governor appreciated the performance of FATA monitoring cell, saying that the monitoring system was going on effectively.

“We have prepared the system on modern lines under which a clear picture about on-the-ground progress is achieved,” he added. He hoped that cooperation and support of elected representatives would be of great help in the completion of development schemes.

Earlier the meeting was also briefed on the ADP achievements during the previous financial year. It was told that during 2008-2009, Rs5.61 billion were released for the FATA development under ADP and utilized totally. Work on 316 development projects were carried out, after completing 198 schemes.

The meeting was told that three mega projects having Bara Dam had been brought under the federal PSDP. The scholarships were awarded to more than 27 thousands students in the education sector and 656 students in the health sector during the previous financial year.

---------- Post added at 08:53 AM ---------- Previous post was at 08:52 AM ----------

NWFP to start mega livestock projects ​

Thursday, July 16, 2009

ABOTTABAD: NWFP Minister for Livestock and Dairy Development Hidayatullah Khan has said mega projects are being launched for the development of livestock sector which will generate jobs for local people.

He expressed his views while speaking at the concluding session of the annual review meeting of the department at the Veterinary Research Centre Abbottabad on Wednesday.

The minister said under the new projects, one model dairy farm, beef farm and poultry farm would be established in every district of the province. “Local people will not only get eggs, milk and meat but also jobs from these farms,” he added. The minister appreciated the performance of position-holder officers in 2008-09 and distributed certificates and awards.

Livestock Director General Dr Sher Mohammad briefed the minister about the achievements, planning and other requirements of the department, especially for the year 2008-09, vaccination of animals, availability of animal medicines, mobile clinics, poultry industry and bird flu.

The minister said it was need of the hour to upgrade the livestock department because it was the main earning source of the common man of backward areas. He hoped that officials of the department would come up to the expectations of public. He directed the authorities concerned to expedite work in service structure and promotion process.

The meeting was attended by Director VRI Dr Nasir Hussain, Director Livestock Fata Dr Bashir and others.

---------- Post added at 08:58 AM ---------- Previous post was at 08:53 AM ----------

New 250MW power unit to supply electricity to textile mills ​

Thursday, July 16, 2009

ISLAMABAD: A power unit of 250 megawatts is being installed in Faisalabad to provide uninterrupted power supply to the textile industry, which will be operational by the end of the current month.

This was stated by the Federal Minister for Textile Industry Rana Muhammad Farooq Saeed Khan while chairing a meeting regarding energy issues of the textile sector here on Wednesday.

During the meeting, the overall situation of the textile sector and the problems faced by it due to energy crisis came under discussion.

The participants expressed deep concern over high tariffs and said that special tariffs should be introduced for the textile sector. They also apprised the federal minister about bank-related matters in detail and BT cotton and R&D-related matters were also discussed.

Participants gave different proposals and suggestions to help overcome different crisis faced by the textile sector. They mentioned that our economy mainly depends on the textile sector. Therefore, the government has to take concrete steps in this regard.

Federal minister for the textile industry said that textile is the most important sector of our economy and the government is committed to resolving all textile-related issues on priority basis because it is our export oriented sector. He said that the concerns of participants, along with their proposals and suggestions are most valuable, which is why all possible remedial measures would be taken in this regard.

Maximum relief will be provided to the textile sector, he said, adding that different meetings with NEPRA, WAPDA, OGRA, SBP and Federal Minister for Food would be arranged to settle maximum issues.

 

[Neo]

President for utilising expertise of overseas Pakistanis ​

Thursday, July 16, 2009

ISLAMABAD: President Asif Ali Zardari on Wednesday called for a credible and transparent mechanism to facilitate highly qualified overseas Pakistanis for access to job opportunities internationally and to enable them to invest their skills and expertise in the country on short-term basis.

The president said this during a briefing held in the Presidency on ‘Placement of highly qualified Pakistanis’ in a shrinking global job market.

The briefing was attended by Minister for Foreign Affairs Shah Mahmood Qureshi, Minister for Investment Waqar Ahmed Khan, Minister for Labour & Manpower Syed Khurshid Ahmed Shah, Punjab Governor Salman Taseer, Minister for Overseas Pakistanis Dr Muhammad Farooq Sattar, Secretary General to the President Salman Faruqui, Planning Commission Deputy Chairman Sardar Aseff Ahmed Ali, Minister of State for Parliamentary Affairs Mehreen Anwar Raja and MOS for Finance Hina Rabbani Khar. Secretaries and senior officials of various ministries were also present in the briefing.

Bilawal Bhutto Zardari, Bakhtawar Bhutto Zardari, Aseefa Bhutto Zardari, children of the president, also attended the meeting by special invitation.

Talking to the media about the meeting, spokesperson to the President Farhatullah Babar said the meeting was convened to mark the formal launch of ‘President’s Programme for Care of Highly Qualified Overseas Pakistanis’.

The programme is aimed at integrating the expatriate community into national development strategies even as they continue to live and work abroad, he said.

The president said the world was passing through a phase of economic slowdown, which called for new approaches and strategies. One of the strategies that could be usefully employed was tapping the vast potential of expatriate Pakistanis for providing short-term services to the country, he said.

The president said the first step in this direction should be the development of a national database of expatriate Pakistani professionals as well as of local institutions and projects in the country where services of expatriate nationals could be utilised.

President Zardari said the idea of the project occurred to him after realising that there were a large number of highly qualified professional Pakistanis living and working abroad. He said their collective wisdom and expertise could be harnessed in meeting the myriad challenges facing the country.

The meeting was informed that a website of the programme, launched yesterday morning, had already been visited by over 30,000 people from throughout the world. More than one 170 expatriate Pakistanis had also sent their particulars and shown interest in short term service in Pakistan on the very first day of the launch, the meeting was informed.

The president also called for creating an online employment placement network with a user friendly interface between potential employers and expatriates seeking employment or part time utilization of their skills and expertise.

He said provision should also be made for developing partnerships with global employment agencies by establishing a link with global on-line job searches and job placement websites.

Minister for Labour and Manpower Syed Khurshid Shah thanked the president for his interest in integrating the expatriate community in the national mainstream.

Minister for Overseas Pakistanis Farooq Sattar said today’s event was the first step in the long journey to harness the great potential of Pakistanis working abroad. He congratulated the president for his initiative.

 

[Neo]

Pak textiles relocating to Bangladesh ​

Industrialists lured by duty free access to EU, 40pc cheaper electricity in BD​

Thursday, July 16, 2009

KARACHI: A number of Pakistani textile houses are relocating their businesses to Bangladesh due to continuous hardship here, The News learnt on Wednesday.

Around four major Pakistani textile giants are in Bangladesh these days to shift their business so that they could furbish their exports orders in time, said one textile exporter of Pakistan on phone from Bangladesh.

“Towellers, a leading name in Pakistan’s home textile industry, is about to shift its business to Bangladesh,” informed Farrukh Maqbool, Chairman of Towel Manufacturers’ Association of Pakistan (TMAP) in a press statement and added that Towellers COO Pervaiz Kazi is travelling to Dhaka this week to meet with the Bangladesh Board of Investment (BoI) officials and finalise the company’s relocation strategy.”

Textile exporters had already warned the Pakistani authorities that they would move their businesses to Bangladesh when they were highlighting the anomalies in budget 2009-10 at PHMA House last month. These businessmen were included S M Obaid and Rafiq Habib Godil.

The reasons behind shifting their business to their competitor country i.e. Bangladesh are that the cost of doing business is continuously rising in Pakistan while country’s bureaucracy was formulating unnecessary regulations, said Syed Usman Ali, Former Chairman of TMAP.

He maintained that the law & order situation, on the other hand, was not allowing them to do their business tension free here. Owing to this law & order situation, the buyers did not come to Pakistan and they have to go to the buyers’ country or any other third country.

So that travelling to buyers’ country was an additional burden on our balance sheets, he added.

The frequent protest strikes, electricity outage and red tape and law and order altogether did not allow exporters to ship orders in time to the buyers, he elaborated. On the contrary, the Bangladesh was offering a number of incentives to its textile-exporting sector. According to rough estimates, doing textile business in Bangladesh is about 30-50 per cent cheaper than Pakistan, it was learnt.

Under the label of Least Developed Country (LDC), the Bangladesh enjoys zero rated exports to European Union, Australia and Canada, while Pakistan pays these levies range from 11-20 per cent, said Former Chairman of TMAP.

He compared that the electricity in Bangladesh was 40 per cent cheaper than Pakistan and 60 per cent cheaper in India as compared with Pakistan, he added. He maintained that the labour in Bangladesh was also available on low salaries. The maximum salary over there is 3,600 taka, while they in Pakistan have to pay Rs6,000/- plus 15 per cent salaries here.

He said that the State Bank refinancing was not available to them since the beginning of new fiscal year 2009-10, as SBP has stopped refinancing to those exporters whose dues with SBP are overdue then 90 days. He said this type of policy was never made in the last 25 years then why bureaucrats were formulating this type of policy during the tenure of an elected government.

TMPA statement added that due to non-cooperative attitude of the government towards the industry, many exporters are planning to relocate their units to Bangladesh. The government has been turning a deaf ear to many pleas from the textile industry which is resulting in closing down of numerous mills leading to further unemployment in the country.

Textile sector has been crying for months about stuck up R&D funds, high finance cost, continuous increase in cost of production and energy shortages, the statement added.

 

[Neo]

Accelerating Economic Transformation Programme: Zero electricity subsidy by Sept 2009 envisaged​

ISLAMABAD: The Accelerating Economic Transformation Programme has recommended the government to bring electricity subsidy to zero by 30 September 2009, and elimination of distortions in food and energy sector along with some other structural changes.

The programme is recommended in Asian Development Bank’s Report and Recommendation of the President to the Board of Directors.

Some key targets of AETP also seek amendments in NEPRA Act to enable timely adjustment of tariff. It has also recommended to form a debt holding company to assume circular debt burden of public power sector companies.

The plan calls for a sustained 8 percent growth over the time span of 2010-2020 and advocate a market based pricing for farmers and flour millers by 2010. The other key envisions of the plan are to increase banking sector credit to private sector to 42 percent of GDP by 2018; manufacturing sector’s share of GDP increased by 30 percent by 2020; and high value-added output share of exports increased to 40 percent of GDP by 2020.

Under AETP2, the Government adopted a power sector circular debt resolution plan and has begun with its implementation. The plan, which was developed in close consultation with ADB, the IMF, and the World Bank should resolve the circular debt problem and more broadly the financial deficit in this sector. It should indirectly support improved corporate governance and reduce technical issues (losses, theft, antiquated equipment, etc.), which have caused the chronic shortfall in Pakistan’s power supply. The plan clarifies the amount of the debt and key activities, including measures to prevent reoccurrence and ensure sustainable debt servicing. It identifies financing sources and agreements and includes milestones, an implementation timetable, and a monitoring framework. The key components of the plan can be grouped under three headings: (i) Timely notification of cost recovery tariff. (a) The NEPRA Act will be amended to enable the determination and enforcement of tariff adjustments in a timely manner. (b) Notification of tariffs will not exceed 15 days from determination and the monthly fuel and power purchase adjustments will be made effective automatically upon determination by NEPRA.

Electricity tariffs will be determined by NEPRA on quarterly basis. A business plan for FY 2009-10 has been prepared to support tariff reform and maximise outputs and sales in selectricity and minimise costs by reducing system losses. Under this plan, electricity tariffs will be increased by 17.5 percent or as later determined by NEPRA to meet the zero tariff differential subsidy commitment. The adjustment will be front loaded and made effective by 1 July 2009, with the remainder to be effective by September 2009.

Sector debt resolution: The government will establish a debt holding company by 30 June 2009 to assume the debt liabilities of public power companies, which will in turn strengthen the financial position of these companies. The debt holding company will be wholly owned by the government and will manage and pay the liabilities through the sale of assets, among other things, over the next 5 years. Public power sector companies have outstanding liabilities of Rs 142 billion (as of 31 March 2009), which are payable to GENCOs, IPPs and fuel suppliers. Of this, the MOF will settle or assist to settle Rs 53.5 billion, power sector companies will recover Rs 27.7 billion from customers, and MoF will assist in paying the remaining Rs 61 billion in liabilities. Performance contracts will be entered into between MOWP and each of the power companies effective 1 July 2009 to promote corporate autonomy, financial independence and improved performance.

Wheat pricing: Under AETP1, the government adopted an action plan to move to a more market-based wheat pricing and efficient reserve management system. Under AETP2, the government has agreed to implement a formula-based system for setting the procurement price for farmers to ensure that such price operates as a floor price and remains below the competitive market price and ensuring that the wheat issue price reflects related costs, including those for transport and storage. An efficient safety net programme will eliminate the need to subsidise the issue price, which subsidy is in large part captured by flour millers. Under subsequent subprogrammes, implementation of the ECC action plan will be assessed and key reform initiatives implemented will be reflected. For AETP3, the government expects that strategic reserves will be maintained at two months of annual consumption and that operational reserves will be eliminated.

 

[Neo]

EPA approves $1.58 billion KCR project study ​

KARACHI (July 16 2009): The Environmental Protection Agency (EPA) has approved the Environmental Impact Assessment Study (EIAS) for $1.58 billion Karachi Circular Railway (KCR) project. Moreover, the Karachi Urban Transport Corporation (KUTC) is also likely to complete the Resettlement Action Plan (RAP) for the rehabilitation of the affected persons by the mid of September 2009.

According to sources, the EIAS had been completed with the Special Assistance for Project Formation (SAPROF), etc, led by a group of Japan External Trade Organisation (Jetro), with a delay of at least five months. Beside the environmental studies, sources said that resettlement of thousands of families, widely spread along the railway line in the last few years, was the big issue for the concerned authority.

For that the process such as getting satellite images of the KCR track from Suparco, data collection from different sources regarding the actual figures of the encroachers and meeting with different groups of people who were living on the encroached lands, was also in progress, they added. They said that at least two Japanese experts of the resettlement process were also likely to visit Pakistan by the first week of next month. The Japanese group was also reviewing the resettlement process of the victims of Lyari Expressway and others in the city to peacefully handle the issue, they added.

The RAP study, a socio-economic survey, was also being prepared to collect demographic conditions of the project area, with guidelines of Japan International Co-operation Agency (Jica) and the World Bank. The KCR project being funded by Japan Bank of International Co-operation (JBIC) was also bound to follow the guidelines of the Japanese agency.

They further said that discussions were also going on with the Board of Revenue to get at least 300 acres of land, which was needed at over 700 points of the project. The PC-I based on the fresh study conducted by a survey team of Jica for the revival of the KCR was yet to be approved by the Central Development Working Party (CDWP).

The current study, conducted by a Japanese team from the ministry of economy, trade & industry, government of Japan, adds some new developments. Japan, as a first parameter, would dualise KCR's 30-km loop with modern signalling and telecommunication system.

At least two dedicated tracks along with the main line from City (Railway) Station to Drigh Road Station of 14.5 kms, which would later be linked to the airport with a distance of 6kms, at a cost of $179.464 million. They said Karachi Urban Transport Corporation (KUTC) would be the vehicle for the implementation of the project having on its Board the senior officials of Pakistan Railways, Government of Sindh and City District Government Karachi (CDGK).

 

[Neo]

FDI likely to continue downward slide ​

KARACHI (July 16 2009): The slash of foreign investment to virtually half in FY09 verses last year is primarily attributed to a slowdown in privatisation proceeds and high concentration of investment in saturating telecom sector. What's worrisome is that Foreign Direct Investment (FDI) is likely to continue downwards in FY10 as no major commitment by global players is in pipeline; the writing was on the wall at boom times.

The global financial crunch and bleak security situation in the country has contributed to gloomy situation as it has halted the flows in consolidating financial sector. The exuberance of foreign investment in FY06-08 (averaged at $6.12 billion per year) was due to cellular sector boom and consolidation of banking sector.

The saturation of these industries was even anticipated in FY07, critics were even surprised by the delayed entry of China Mobile (contributing roughly $2 billion for FY08 and FY09). The dark side of the moon is that investment in services sector does not bode well for long term economic growth as most of revenues generated from these industries will be remitted to parent countries in coming years.

Although this has created employment opportunities and provided better communication facilities to spur economic activities, our long term focus should have been on infrastructure (power projects, dams and roads construction) and commodity sectors investments.

The inflow of foreign investment declined by 51 percent, YoY, to stand at $2.67 billion in FY09, where Foreign Direct Investment (FDI) shrunk by $1.69 billion (31%) to 3.72 billion owing to dearth of fresh investment in the outgoing year. The contribution of telecom and financial business investments (comprised of over 60% of FDIs in FY08, now reduced to 42%) declining by 46 percent to $1.52 billion.

Meanwhile, Foreign Portfolio Investment (FPI), considered as hot investment with short-term horizon, reversed its direction in arguably the worst ever global financial year since the Great Depression. It recorded an outflow of $509 million last year as compared to an inflow of $19.3 million in FY08.

Equity market, the main recipient of FPIs in the last few years, was under major battering with an outflow of $408 million in FY09. But this is understandable as $31 billion (equalling 55%) of market capitalisation was wiped in FY09 on the Karachi Stock Exchange.

The maturity of both public ($544.1 million Euro Bond) and private ($100.6 million Pakistan Mobile company limited) bonds has also reversed the flow in debt market and given the current economic environment any further foreign investment in domestic debt market in FY10 seems unlikely.

Public sector investment is also going to remain muted considering that economic managers do not have any new Euro Bond, GDR or privatisation of public companies on their agenda this year. And although, FPI may show some respite to declining foreign flows on account of likely recovery in stock market; in the absence of FDI triggers the overall picture remains gloomy.

 

[Neo]

Capacity building: Pakistan to learn from Malaysian model ​

KUALA LUMPUR (July 16 2009): Pakistan can learn from Malaysian experiences in capacity building in the fields of industrial and manufacturing sectors. This was stated by Javad Malik, Chief Executive, National Productivity Organisation, a department under the Ministry of Industries of Pakistan.

He is currently on a three-day visit to Malaysia to benchmark Malaysia's expertise in capacity building and quality enhancement, with particular focus on industrial and manufacturing sectors. During a meeting with Malaysian experts, he said that Malaysia had indeed made tremendous progress in developing key performance indicators in the industrial and manufacturing sectors and developed a model of its own to successfully improve their capacity and productivity.

He said that Pakistan can learn from Malaysian experiences in these fields. Javad said there would be follow-up meetings and co-ordination between the two countries to learn from each other's experiences and building these understandings learning, the scope of co-operation would also be extended to services and agriculture sectors.

The three-member delegation, headed by Javad, is visiting Malaysia as organised by Malaysia Productivity Council and Asian Productivity Organisation of Japan, of which Pakistan and Malaysia are members. During their three-day stay in Malaysia, the delegation held various meetings with senior management of Malaysia Productivity Council, including the Director General, and heads of various departments and visited industrial and manufacturing facilities.

The delegation was briefed on Malaysia's successful implementation of policies for enhancement of productivity in industrial and manufacturing sectors and both sides discussed ways and means to introduce Malaysian model for capacity building of industrial and manufacturing sectors with the objective to improve upon their productivity. Commenting on the visit, Javad termed it highly useful and productive.

 

[Neo]

Export target not met ​

EDITORIAL (July 15 2009): The government has been unable to meet the revised export target of 19.2 billion dollars for the fiscal year 2008-09, according to statistics released by the Federal Bureau of Statistics (FBS). The shortfall in exports is about 1.419 billion dollars, accounting for a trade deficit of 17.040 billion dollars.

Thus, the government over-estimated exports twice last year as the 2008-09 budgetary target was around 22 billion dollars, which was revised downward to 19.2 billion dollars and the actual achieved was 17.78 billion dollars. One can find several plausible explanations for the failure to meet the target, notable amongst which is the global recession that negatively impacted our consumer based export items such as textiles.

Massive loadshedding curtailed the productive capacity of all sectors, including the export sector, while there was continued government failure to support the textile sector, our largest export earner, in marked contrast to the support rendered to this sector by other countries, including our major competitors in the international market, for example India. To fall short of the export target by 1.4 billion dollars is an extremely significant amount and is close to the annual US assistance to Pakistan of 1.5 billion dollars, for which members of the country's executive have expressed their appreciation.

Imports for the year were estimated at 34.822 billion dollars, a decline of 5.1 billion dollars from fiscal year 2007-08. Major part of the decline is no doubt attributable to the decline in the international price of oil and products - from a high of 147 dollars per barrel to a low of 40 dollars a barrel, though the price is rising again.

However, what is inexplicable is the fact that the government forecast was so out of synch with reality. Forecasts are used to formulate policy that, consequently, impact on macroeconomic variables and until and unless, they are close approximations the outcome is unlikely to be an effective and targeted policy.

Considering that the trade policy was announced a year ago by Chaudhry Mukhtar, when the budgetary forecast was considered relevant, many would argue that there is a need to revisit some of the policy directions contained in the Trade Policy, especially with respect to trade liberalisation measures.

In addition, the government's tendency to forecast figures that are not likely to be met, a tendency displayed by the past as well as the current government has led to numerous allegations that statistics are deliberately manipulated and needs to be curtailed. For after all, the political price of failure to meet the targets at a future date would be paid by the sitting government.

It is pertinent to note that the government will have to make up a trade deficit of 17.78 billion dollars. It is also noteworthy that in the last fiscal year, the government was unable to convince the International Monetary Fund to extend the next tranche of around 800 million dollars because of its failure to meet conditions related to the energy sector. In effect, the government requires an excess of 18 billion dollars to support its balance of payment position - money that is unlikely to be injected into the economy in the current year. Hard times are certainly not over for the people of this country.

 

[Neo]

Pakistan's current account deficit narrows in 2008/09​

KARACHI, July 16 - Pakistan's current account swung back into deficit in June, but the overall deficit for the 2008/09 fiscal year narrowed by over a third compared with a year earlier, the central bank said on Thursday.

The current account recorded a deficit of $635 million in June compared with a revised surplus of $283 million in May, data from the State Bank of Pakistan showed.

Analysts said higher imports of oil products, in anticipation of rising fuel prices, were probably behind the fall back into deficit.

Still, the deficit for the fiscal year that ended on June 30 fell to a provisional $8.861 billion, down from a revised $13.866 billion the previous year.

Pakistan entered a $7.6 billion emergency International Monetary Fund programme late last year to avert a balance of payments crisis.

The full-year deficit is now equivalent to about 5.4 percent of gross domestic product .

"The IMF and the government were expecting the deficit to be 5.9 percent of GDP, so in that sense it's very positive," said Sayem Ali, an economist with Standard Chartered in Karachi.

"It ... indicates that the gains made in the last nine months since Pakistan entered the IMF programme are sustainable," he said.

Analysts said increased foreign participation in the equity market in recent weeks, as well as record remittances in 2008/09, were also an indication of the country's improving economic situation.

Pakistan is hoping to get the roughly $875 million third tranche of the IMF loan approved early next month.

Pakistan received a record $7.81 billion in remittances from overseas nationals in the fiscal year ended June 30, up from $6.45 billion in 2007/08.

Its trade deficit for the 2008/09 fiscal year narrowed to $17.04 billion from $20.91 billion in the preceding year.

 

[Hyde]

Marble exports raises to 60% in last fiscal year​

Updated at: 0911 PST, Thursday, July 16, 2009
Marble exports raises to 60% in last fiscal year KARACHI: The sixty percent raise was recorded in marble exports during last fiscal year.

Chairman Marble Exporters Association Sanaullah Khan said this while talking to Geo News. He said in fiscal year 2007-08, marble exports were at the level of $ 19.6 million, which has been raised to $36.1 million in 2008-09.

Sanaullah said the duration of load-shedding in marble processing factories in Karachi has been dropped from 12 hours to 3 to 4 hours and if it will continue, the export will be climb to 100 percent during current fiscal year.

Source: Marble exports raises to 60% in last fiscal year - GEO.tv

 

[Neo]

KSE rises above 7,700 points to hit three-month high ​

Friday, July 17, 2009

KARACHI: The local equity market witnessed a bullish trend on Thursday on the back of selective buying. The gradually rising Karachi bourse successfully breached through 7,700 points level on Thursday to stand at three-month high.

The KSE-100 Index was up by 29.27 and closed at three months high level at 7715.42. The KSE-30 with gained 30.99 points to close at 8289.83 points, KSE-All Shares Index was up by 19.03 points to close at 5499.21 points and KMI-30 Index was up by 19.62 points to close at 11521.21 levels.

Market capitalisation stood at Rs2.271 trillion as compare to Rs2.263 trillion in the last session.

Ahsan Mehanti CEO of Shahzad Chamdia Securities stated that buying activity witnessed on expectation of significant discount rate cut after the T-bills cut-off yields dropped to 156bps-78bps in SBP auction.

Investors took positions on oil sector expecting record payouts. Rise in international oil prices to $61, continued foreign interest in the market played a catalyst role for positive activity.

Khurram Shehzad analyst at Invest Capital stated that foreign interest is developing in the market and expectation of decline in the discount rate is boosting the investors’ confidence.

Over all market fundamentals are strong and result season will further boost the market.

Hasnain Asghar Ali analyst at Aziz Fida Hussein & Co. stated that market was triggered by optimism from the upcoming events that allowed the index to increase the trading band, the beneficiaries continued to invite buying interest on opening.

Although major interest was generated by the seasoned players and stayed of speculative nature, increasing turnover has reduced the premium of selling the desired quantity at market rate, all thanks to the recent commitment of reduction in cost of trade.

Although official notification is yet to be received, healthy turnover has placed the corporate participants at ease. While the likely gainers in advent of increase in international oil prices and weakness in local currency, mainly Oil and Gas exploration stocks and exporting concerns kept the buyers interest alive.

The recent surge in buying interest by the foreign participants (of the local economy) allowed the privileged stocks to lead the gains.

Partially disappointed by the ongoing delay in introduction of ready board leverage (since update is not available) and inability of the authorities to stay at par with the market demand, market men opted for offloading at short profits, the strategy did lead to a midday stagnation, thereby disallowing the index to sustain above the resistance of 7770-7777, Ali concluded.

Trading activity decreased as compared to the last trading session as the Ready market volume stood at 194.360 million shares as compared to 236.246 million shares in the last trading session. However no activity was seen in the future market.

Among the active issues 155 companies were positive, 161 declined and 25 remained unchanged.

DGK Cement was the volume leader with 13.730 million shares closed at Rs34.90 with gain of 83 paisa, followed by Nishat Mills Ltd with 13.157 million shares closed at Rs41.14 with loss of 7 paisa, Azgard Nine Ltd with 11.725 million shares closed at Rs26.86 with loss of 2 paisa, Bank Al-Falah with 10.648 million shares closed at Rs12.38 with loss of 2 paisa, UBL with 10.398 million shares closed at Rs45.08 with gain of Rs.1.03.

 

[Neo]

Power generation projects of up to 50MW: Ministry preparing summary to seek permission from cabinet​

* Prime Minister Yousaf Raza Gilani allowed provinces to begin power generation projects after federal cabinet’s approval​

ISLAMABAD: Following the directives of the prime minister, the Ministry of Water and Power is making a summary to seek the permission from the federal cabinet to allow provinces to initiate power generation projects of up to 50 megawatts (MW), sources told Daily Times on Thursday.

For overcoming the power shortfall, the two provinces, namely Punjab and Sindh had sent the proposal of initiating different power generation schemes to the Ministry of Water and Power. The ministry informed the Prime Minister Yousuf Raza Gilani during his visit to the ministry on June 16 that the provinces sought permission for initiation of power generation projects. Sources further said that the PM in its recommendation had allowed the provinces to begin power generation projects subjected to the approval of the cabinet.

The prime minister directed the ministry to focus on developing indigenous energy resources like coal, hydro and wind, which the country had in abundance and if these resources were developed, this could secure cheap energy supplies for the next several decades. The PM also directed the Ministry of Water and Power that indigenous fuel-based power generation projects should be carried out on fast-track basis so as to effectively deal the challenges of energy shortage.

In other directives to the Ministry of Water and Power the PM also stressed for elimination of wastage and inefficiencies within energy production and distribution system so that the ministry should invest in the system’s upgradation to bring energy losses in line with internationally accepted levels by developing a viable investment plan.

The PM also directed the ministry to focus on promotion of energy conservation measures and called for the formulation of a realistic conservation plan in consultation with all the stakeholders to save 20-25 percent energy, which would save foreign exchange.

According to the PM’s directives, the service providers needed to be made more efficient and client responsive in order to achieve commercial viability and reduce the present reliance on heavy subsidies, which were directly and indirectly being paid by the taxpayers and the ministry should focus on this aspect as well.

The PM directed the Ministry of Water and Power to speed up its efforts to enhance public and private sector power generation to a maximum capacity for public relief and promotion of economic and commercial activity in the country.

Regarding village electrification programme of the government, the PM had asked the Ministry of Water and Power to contact the Ministry of Finance and proper funds would be provided for this cause, the sources maintained. About availability of furnace oil and gas for power generation thermal plants, the PM had directed the Ministry of Water and Power to contact with the Adviser for Ministry of Petroleum and Natural Resources so as to overcome power shortfall soon.

The PM also expressed willingness to visit Mangla Dam Rising Project with consultation with the Ministry of Water and Power in the near future.

About complete removal of load shedding by December 2009, the sources said that the PM directed the ministry to work hard and fulfil the promise as the power shortfall badly affected commercial activities, industrial production and even the common people.

 

[Neo]

Govt may approve 4.4MW Naulong project​

ISLAMABAD: The government plans to construct Naulong Dam project for exploiting hydropower potential by installing two powerhouses having total installed capacity of 4.4MW. The total cost of the project is estimated to be Rs 14.726 billion.

The dam will be constructed at Mula River, district Jhal Magsi Balochistan. Apart from power generation, the project will also help in mitigating and storing flood waters of Mula river and thus an average of 137860 acres feet would be annually available for developing irrigated agriculture for command area of 47000 acres. Mula River will control floodwaters of the river and will save the loss of life and property.

The dam would also help in smooth supply of water for drinking and other domestic useRs Seepage from the dam will recharge the groundwater reservoir and increase the resources of future. The project will also increase the development of fisheries in the area. The total cost of the project (Rs14.726 billion) also include Rs16.567 million as Foreign Exchange Component, and according to the working paper of the project, available with Daily Times revealed that the project would be financed through Federal Public Sector Development Programme (PSDP) 2009-10. The government allocated an amount of Rs800 million for construction of eight dams in Balochistan including the Naulong Dam Project in the PSDP.

In Balochistan the perennial irrigation supply from Indus River is available through the Pat Feer canal and the Khirther canal irrigation systems. Centuries old karez system is present in the province, which was not enough to meet the irrigation demand of the province. To increase the groundwater storage, delay action dams and storage dams need to be constructed.

Construction of Naulong Dam project is endorsed in the context of national strategy for harvesting flood water for integrated water resources utilization through augmentation of small/medium dams. The project is included the Prime Minister’s Program for construction of 32 small/medium dams in Pakistan. Prime Minister has also desired that implementation of the programme may be started on fast track basis for early completion of the sub projects in the stipulated time.

The technical appraisal of the working paper of the project revealed that the project has been designed to bring 27,000 acres under irrigation. As per Water Accord, it was mandatory to get certificate from IRSA for availability of water, as the reservoir operation capacity is more than permissible limit (5000 acres to bring under cultivation). The Central Development Working Party (CDWP) in its meeting today (Friday) is likely to approve the project and after its start, the dam would be completed in four years. ijaz kakakhel

 

[Neo]

Current account deficit shrank by 36 percent in 2008-09 ​

KARACHI (July 17 2009): The country's current account deficit has shrunk by 36 percent to 8.8 billion dollar in fiscal year 2008-09 mainly due to higher home remittances and sharp decline in trade deficit. The central bank on Thursday revealed that the country has posted a current account deficit of 8.861 billion dollar in fiscal year 2008-09 as compared to 13.866 billion dollar in fiscal year 2007-08, depicting a decline of 5 billion dollar.

Current account deficit as per percentage of GDP has also reduced to 5.4 percent in last fiscal year as against 8.7 percent of GDP in fiscal year 2008. "Massive decrease in the country's current account deficit has occurred due to all time high home remittances, decline in goods imports and trade deficit, besides aggressive performance of services sector," said Muzzamil Aslam an economist at JS Global.

He said current account balance was constantly on deficit side since June 2007 to January 2009 largely contributed by high goods imports on the back of rising commodity prices at international front. However, a major cut in imports followed by slow trade activities had improved the situation and by the end of fiscal year 2009 current account deficit had declined by 36 percent, he added.

He said rising current account deficit in last fiscal also forced the government to rejoin International Monetary Fund (IMF), as a result country got a 7.6 billion dollar worth stand-by loan to meet its current account requirements and avoid any default. "Current account deficit in fiscal year 2008-09 is also lower than the government's and our expectations, as we were expecting over 9 billion dollar deficit in last fiscal," Muzzammil added.

He said current account deficit would be about 6.6 billion dollar in the current fiscal year 2009-10, if average oil prices would not be higher than 55 dollar per barrel in international market. Muzzammil said decline in the current account deficit would also help to keep the exchange rate stable, besides strengthening the foreign exchange reserves.

"Strengthening the current account would also help to stabilise the exchange rate to a reasonable level and further build the country's forex reserves, which already have crossed 12 billion dollar due to decline in current account deficit," he said, adding that improving current account situation also indicated overall economic stability.

Trade and services sector have presented a significant improvement and contributed major share in the depleting current account deficit, while income deficit is still witnessing an upward trend. Country's overall goods imports stood at around 31.71 billion dollar and exports at 19.22 billion dollar with a trade deficit of 12.494 billion dollar during last fiscal year, which stood at 14.97 billion dollar in fiscal year 2008.

Services deficit has declined by 3.2 billion dollar to 3.231 billion dollar with 4.043 billion dollar exports and 7.274 billion dollar imports in last fiscal year. However, country's income deficit is continuously on surge and mounted by 11 percent to 4.338 billion dollar in fiscal year 2008-09 with 902 million dollar inflows and some 5.24 billion dollar outflows.

Overall deficit including goods, services and income stood at 20.0063 billion dollar against the current account transfers of 11.308 billion dollar during the period. Month on month basis, current account balance has registered a deficit of 635 million dollar in June 2009 as compared to a surplus of 283 million dollar on the back of high goods imports, which stood at 1.1 billion dollar.

 

[Neo]

Mining in Thar: UK firm given assurance by Sindh government ​

ISLAMABAD (July 17 2009): Sindh government has given assurance to a UK-based firm, Oracle Coalfield Plc, that it will be the first company, which will start mining in Thar, official sources told Business Recorder on Thursday. This pledge was given at a recent meeting between Oracle representatives Mike Joyce, Tony Scutt and Shahrukh Khan, at the office of the Secretary of Mines and Mineral Development in Karachi.

During discussions, the delegation was informed that the work was progressing satisfactorily as per schedule, and that the feasibility study report would be completed on fast tack basis and would be finalised in November, 2009. After evaluation of feasibility report by the technical committee and its clearance, they will apply for grant of mining lease and will pay all requisite fees.

Oracle representative Mike Joyce stated that that Oracle had examined Thar coal and considered it mineable. "Any suggestion to the contrary is unfounded," he said, and quoted an example of four power plants of 4000 MW, established within the radius of 10 square kilometres in Australia, with the coal quality inferior to Thar coal. The sources said Shahrukh Khan presented a copy of scoping report (study) that was scheduled for submission in June, 2009.

He stated that he had forwarded the report to all concerned for their information and comments, if any. He further revealed that as a next step, they had initiated a programme for environmental and social baseline data collection, which would broadly cover the following areas:

-- Mapping and topographical data, study on land use, study on socio-economic situation and infrastructure, study on demographic and ethnological profile, settlement and household composition and design, local economy and household income and livelihood, social services infrastructure, physical infrastructure, natural resource management, governance and civil society, cultural property, flora and fauna, natural vegetation/plant life, animal life, climate, water, air quality and noise, geology, geomorphology soils, social-cultural heritage, landscape and visual character, seismicity and radioactivity.

Members of the delegation assured the government that after the grant of the mining lease, they would approach the PPIB for issuance of LoI within the prescribed timeframe and work on bankable feasibility would be carried out on fast track basis.

According to the sources, the Secretary of Mines and Minerals, informed the meeting that their scoping report would be placed before the technical committee and observations communicated in due course of time. The sources said that Oracle assured submission of technical report by November, 2009 and ESIA by February, 2010. "We are following the timelines as per memorandum of understanding (MoU) and would not lag behind, and if every thing goes as per plan we will be able to start mining operation in 2011," the sources quoted Oracle delegation as saying.

The Provincial Secretary informed the meeting that work on providing 250 cusecs water to Thar coalfields was in active consideration and preliminary report was expected within two months before preparation of PC-I for providing water from Chotiaryoon reservoir. Besides, the work on 500 KV transmission line and broad gauge railway line was also under active consideration of the concerned authorities.