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Italy interested in Diamer-Bhasha construction
Staff Report

ISLAMABAD: Ambassador of Italy to Pakistan, Vincenzo Prati, called on the Federal Minister for Water and Power, Raja Pervaiz Ashraf, here on Monday and discussed various matters of mutual interest and bilateral relations particularly the Diamer-Bhasha Dam.

The Ambassador said that Italian Companies are interested in constructing Diamer-Bhasha dam because they already have a similar experience in Pakistan in the form of the construction of Tarbela dam.

He said that Italians are also keen to collect data of water quantity in the glaciers in Gilgit Baltistan.

The Minister welcomed the Italian offer and said that the government is all se t to inaugurate Diamer-Bhasha Dam in July 2010 and start construction by the end of current year. He said that ADB, IDB, FOP and WB have assured funding for this project, which is of national importance to the country. He asked the Italian ambassador to collect relevant data for the dam and take part the bidding process for the construction of the dam. The Minister also informed the Ambassador of construction of Kurram Tangi Dam and Kayal Khawar Hydel project.

Daily Times - Leading News Resource of Pakistan
 
No i think chineese are good for Basha dam construction
it cost 12.5Bn USD.
So we hav to give deal to our chineese friends
is it true
that russia is also in the dam tender..heard it may be nt true
 
Federal budget 2010-11: Harsh taxation, token relief expected
Friday June 04, 2010 (1151 PST)


ISLAMABAD: The next budget (2010-11) will unveil tough taxation measures, including hiking the standard rate of the GST by one per cent to 17 per cent from the existing 16 per cent, abolishing sales tax and income exemptions and increasing excise duty on cigarettes, air conditioners, refrigerators and other items. The federal government is going to present the next budget in the National Assembly tomorrow (Saturday) in which it will reiterate its commitment to impose Value Added Tax (VAT) in 2010-11 after evolving consensus among all stakeholders to fulfil the IMF/WB main condition for multibillion dollar financing.

The federal and provincial governments’ representatives are going to hold another round of talks today (Friday) to iron out differences on VAT though it has been decided that no announcement in this regard would be made in the budget speech.

VAT or no VAT, the FBR’s tax collection target of Rs1,667 billion will remain unchanged for the next fiscal year, though the ministry of finance is pressing the FBR to go for Rs1,700 billion target.

The FBR has proposed capital gains tax with different rates ranging from 7.5 per cent on stock market shares to 17.5 per cent for holding shares depending on timeframe. “The imposition of capital gains tax on stock market share is expected to yield around Rs5 to 6 billion during the first financial year 2010-11,” a senior official of the FBR confirmed to this scribe.

The FBR, he said, has not proposed to abolish exemption of CVT on land transaction up to one kanal and it would continue in the coming budget. The government is unlikely to allow import of reconditioned cars while taxes on the local cars will remain unchanged.

On relief side, the FBR has proposed to the government to increase ceiling of taxable income for the salaried class. The government will also include X-Ray film in the list of duty-free items. The list of raw material with zero-rated regime will be expanded in the next budget.

Excise duty on air conditioners and refrigerators is likely to be doubled, from existing 5 per cent to 10 per cent in the next budget. On cigarettes it will be increased substantially, close to 70 per cent, in accordance with the international standards.
:hang2:

Pakistan News Service - PakTribune
 
VAT dispute may delay further IMF loan to Pakistan

WASHINGTON: The International Monetary Fund has not stopped the release of loans to Pakistan till the imposition of Value-Added Tax, but a further delay in implementing IMF-backed reforms may delay the next disbursement, sources told Dawn on Tuesday.

Some TV channels in Pakistan have reported that the IMF has stopped further disbursements, withholding about $1.15 billion, including budgetary support of $363.7 million.

But IMF and diplomatic sources told Dawn in Washington that while the report was incorrect, Pakistan not only needs to implement VAT but also increase power tariff by six per cent under a 6-12-6 formula already accepted by Islamabad.

If power tariffs are not adjusted now, the delayed increase will have to be accommodated in the 2010-11 schedules, which may further enhance the adjustment rate.

Similarly, if VAT is not implemented by July 1, as already agreed between Pakistan and the IMF, the next review will not take place.

IMF sources blamed the government for creating the impression that the fund was forcing Pakistan to implement these reforms. They noted that Pakistan had promised to implement the reforms and the IMF was only reminding it to fulfil its pledge.

The sources said the IMF resident mission in Islamabad had also asked the ministry to fulfil its pledge to the World Bank to hike electricity rates by six per cent.

VAT was to be imposed in the budget for 2010-11 presented on Saturday but this could not be done due to differences between the federal and provincial governments.

Earlier, Pakistani diplomatic sources in Washington said they had about three months to implement VAT and other reforms to meet its obligations to the IMF.

DAWN.COM | National | VAT dispute may delay further IMF loan to Pakistan
 
FATA ADP Doubled: Finance Minister

Finance Minister Dr Abdul Hafiz Sheikh has announced enhancement of FATA's Annual Development Plan (ADP) from Rs. 8.6 billion to Rs. 15 billion.

A delegation of Parliamentarians from the Federally Administered Tribal Areas (FATA), led by Mr. Munir Orakzai, MNA, called on the Federal Minister for Finance, Dr. Abdul Hafeez Shaikh here today. During the meeting, the Parliamentarians from FATA apprised the Minister of the economic problems faced by the people of FATA agencies.

Finance Minister Dr Abdul Hafiz Sheikh announced enhancement of FATA's Annual Development Plan (ADP) from Rs. 8.6 billion to Rs. 15 billion and assured the delegation that all constitutional and administrative formalities in this regard would be completed shortly and the Ministry of Finance would ensure that the amount is released promptly.
 
Australia seeks investment in Pakistan

KARACHI: Australian High Commissioner to Pakistan, Tim George, said it was the intention of the Australian government to bring their investors, particularly those based in Dubai, to Pakistan.

He said this during his visit to the Overseas Investors’ Chamber of Commerce & Industry (OICCI) to discuss investment opportunities in the country. The delegation included Peter Linford, Australia’s Senior Trade Commissioner for South Asia, Jon Bonnar, First Secretary (Political) Australian High Commission and Bazl Khan, Australian Consul General and Karachi based Trade Representative.

Tim George said the Australian government is looking towards areas of opportunities where potential investment could be made and asked for OICCI’s support in identifying such sunrise industries. He also shared that the government is interested in the livestock and dairy industry of Pakistan and is exploring the possibilities of investment in this particular sector. While giving a brief presentation on the role of OICCI, Ameena Saiyid OBE, President OICCI said, “the OICCI, a premier body of multinationals in the country, can play a significant role in increasing investment and economic growth despite the challenging times”. staff report

Daily Times - Leading News Resource of Pakistan
 
Arab Iron and Steel Union to invest in Pakistan

KARACHI: Chairman of Al Tuwairqi Holding, Dr Hilal Hussain Al Tuwairqi, said that the current scenario of the Pakistani steel sector indicates a huge growth potential in this industry.

The per capita-consumption of steel in Pakistan is only 38 kg vis a vis a global average of 175 kg. Even if we consider the very modest increase in per capita steel consumption to 80 kg in the next 10 years, the steel requirement works out to be 16 million tonnes per annum for a population of around 200 million by the year 2020.

Dr Hilal expressed these views after being elected as chairman of the board of Arab Iron and Steel Union (AISU), which is the largest regional Arab conglomerate of iron & steel producers and users, comprising more than 80 companies from 16 Arab states.

Dr Hilal, being the head of AISU board, can help strengthen Pakistan’s steel industry and would definitely facilitate Tuwairqi Steel Mills in arranging technical expertise to accelerate mining and exploration activities in Pakistan with the help of AISU member companies. staff report

Daily Times - Leading News Resource of Pakistan
 
Remittances exceed $8 billion mark

Thursday, 10 Jun, 2010


It may be pointed out that the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis had undertaken a joint initiative called ‘Pakistan Remittance Initiative (PRI)’ with a view to facilitating the flow of remittances through formal channels. — File Photo

KARACHI: Remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $8,064.47 million was received in the first eleven months (July-May) of the current fiscal year 2009-10, showing an increase of $988.21 million or 14 per cent over the same period of the last fiscal year.



This is the first time that remittances exceeded the mark of $8 billion in any fiscal year while the remittances for the month of June are yet to be accounted for. The amount of $8,064.47 million includes $1.02 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).



It may be pointed out that the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis had undertaken a joint initiative called ‘Pakistan Remittance Initiative (PRI)’ with a view to facilitating the flow of remittances through formal channels.



In this regards a number of steps have been taken by PRI which has started to materialize and remittances through formal channels are showing considerable growth.



It may also be mentioned Pakistan has been reported as a top nation which has shown the highest growth in the world in remittances despite recent global financial crisis.



In May 2010, an amount of $757.86 million was sent home by overseas Pakistanis, up 5.16 percent or $37.18 million, when compared with $720.68 million received in the same month last year.



The inflow of remittances in the July-May, 2010 period from UAE, Saudi Arabia, USA, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,842.18 million, $1,718.31 million, $1,606.36 million, $1,132.03 million, $793.91 million and $229.74 million respectively as compared to $1,523.89 million, $1,407.23 million, $1,581.48 million, $1,094.54 million, $537.11 million and $224.71 million respectively in the July-May, 2009 period.



Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first eleven months of the current fiscal year amounted to $740.88 million as against $706.84 million in the same period last year.



The monthly average remittances for the July-May 2010 period comes out to $733.14 million as compared to $643.30 million during the same corresponding period of the last fiscal year, registering an increase of 14 per cent.



During last month i.e. May 2010, remittances from Saudi Arabia, UAE, USA, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $192.41 million, $178.96 million, $144.56 million, $99.03 million, $59.32 million and $19.53 million respectively as compared to $143.16 million, $157.10 million, $145.83 million, $98.52 million, $69.13 million and $28.18 million in May 2009.



Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during May 2010 amounted to $64.02 million compared with $78.75 million in the same month last year.
 
3G mobile broadband service


‘Technology to be launched after extensive discussions’

Friday, June 11, 2010
By Mehtab Haider

ISLAMABAD: All stakeholders of the telecom industry will be taken on board before finalising the policy for 3G mobile broadband technology, said Minister for Information Technology Latif Khosa on Thursday.

“3G would be introduced after removing concerns of all the telecom players,” Khosa said, while speaking at a seminar on 3G technology. “it would be launched after extensive analyses and discussions.”

The recent auction results of 3G spectrum in India ending at $15 billion is a sign of upbeat mood of investors in introducing latest telecom facilities in this region, he said.

Pakistan Telecommunication Authority organised the seminar in collaboration with Qualcomm and Central Asian Cellular Forum (CASF) to highlight the 3G mobile broadband technology.

Experts informed that the International Mobile Telecommunications-2000 (IMT-2000), better known as 3G or 3rd Generation, is a family of standards for mobile telecommunications fulfilling specifications by the International Telecommunication Union, which includes Universal Mobile Telecommunications System (UMTS), and Code Division Multiple Access - CDMA2000 as well as the non-mobile wireless standards Digital Enhanced Cordless Telecommunications (DECT) and Worldwide Interoperability for Microwave Access (WiMAX) a telecommunications protocol that provides fixed and fully mobile internet access.

Khosa said that the telecom sector witnessed an unprecedented growth after its deregulation.

Currently teledensity - the benchmark of persons having access to telecommunications as compared with the total population - stands at 63.5 per cent, he said. “We are well on our way to cross the 100 million mobile subscribers mark in the near future.”

The past two years also saw broadband growth of 150 per cent, never before experienced, he added.

Talking to the media after the seminar, he said that the government could review privatisation of PTCL with Etisalat after the completion of agreement period and any decision would be taken keeping in view the national interest.

“If anything is found against the interest of the country, then the PTCL privatisation could be scraped after completion of due period by year 2013.”

He said there some mistakes might have been committed at time of PTCL privatisation, but now it was government’s responsibility to act upon the clauses of the agreement.

“There are international guarantees involved in such agreements and it is the responsibility of the government to fulfill its obligation at all cost.”

He said that the transfer of land to PTCL was underway and when this process would be completed, then Etisalat would pay the remaining instalment to government.
 
IT budget up by 795 percent - industries department's down by 24 percent

MUHAMMAD RIAZ
LAHORE (June 15 2010): With a view to develop Punjab as a hub of information technology, the Punjab government has proposed to enhance allocation by 795 percent to Rs 1960 million in the budget 2010-11 as compared to last year revised allocation of Rs 219 million. The Punjab government, however, proposed to curtail the budget for the industries department in the budget 2010-11 by 24 percent to Rs 220 million as compared to revised allocation of Rs 291 during the year 2009-10.

The allocation was increased in the development programme for the year 2010-11 in line with the medium term development goals envisaged under Medium Term Development Framework (MTDF) 2013. Information technology aims at providing better opportunities towards state-of-the-art governance, transparency for implementation in rules and regulations and best official practices in the public sectors. An amount Rs 1960 million has been earmarked for IT in 2010-11 for implementation of projects sponsored by ITD, PITB and the other government departments.

The enhancement in the budgetary allocation during the financial year 2010-11 is aimed at providing a reliable, scalable IT infrastructure for the government of Punjab, including a centralised secure, reliable, scalable data centre, district-level connectivity and license-compliant software.

The budget is also aimed at developing human resource by providing training through boot camps and remedial programmes, IT teachers training, global IT certification, open source training and training government employees for enhancing e-readiness.

The provision of software technology parks and incubator centres, formulation of provincial ICT policy and action plan for short, medium and long term would be ensured during the year while steps would be taken to enhance foreign and domestic investment in the IT sector. The allocation also aimed at making and implementing policies for improved efficiency through automation of business processes and Business Process Re-Engineering (BPR).

A number of projects have been designed to achieve the objectives of the IT development in the province including construction of state-of-the-art 17-storey Software Technology Park, development of IT Infrastructure and Data Centre to connect government departments and districts for e-governance with each other through common gateway. Moreover Incubator Centres for IT start-up firms would be set up besides imparting IT training, manpower development and creating IT awareness.

The improvement of communication through networking of Highway Patrolling Posts. Replication of "Motor Transport Management Information System" and "Motor Vehicle Registration System" in the remaining districts of Punjab have been included in the main objectives of the IT sector. Apart from this, the citizen services and automation of internal processes in health, education, agriculture, livestock and home departments have also been planned during the year. The other projects under the IT development, the Citizen Feedback System, License Compliant Software and Open Source Software are also included in the development programme.

The Development Programme for the year 2010-11 envisages skill development programmes, employment generation projects, and IT led knowledge-based interventions. The basic thrust of the development strategy in year 2010-11 would be to put a greater emphasis on tripartite elements of growth ie development of infrastructure, investments in human resource and use of advanced technology.

The equitable and balanced growth has been expected to achieve during the current year's policy objectives of the development programme besides extending social sector coverage and improving delivery of public services. Equitable investment would also be ensured.

Despite slashing the budget for the industries department, the provincial government has planned to make efforts to make the industrial products internationally competitive. Industrial sector in Punjab is contributing 26 percent of the Punjab's economy. The department aims at the growth of locally and internationally competitive industries in Punjab to achieve the following benefits in the shape of technological upgradation, employment generation in the industrial, services, cottage industries, sustained growth in profits from industrial and services sectors, sustained growth in government revenues and export earning and sustained growth in foreign and local investment in manufacturing and service sectors in Punjab.

The provincial government has earmarked Rs 220.00 million for the Industries sector with the objectives to create an enabling environment for the private sector to grow and prosper. The resulting economic activity is expected to achieve the government's objectives of employment generation, increased income and poverty alleviation. Creating a better quality of life for the citizens of Punjab by encouraging private sector to invest in Punjab. Generating growth in the economy to create employment, upgrading technology to enhance profitability and improving infrastructure necessary for economic uplift.

The provision of one roof facility to the manufacturers under cluster development programme, provision of missing facilities in Small Industrial Estate, lending programme for SSI sector including small industries, cottage industries and household enterprise at competitive rates would be ensured during the next financial year.
 
Punjab government proposes to enhance education budget to Rs 23.3 billion


HASSAN ABBAS
LAHORE (June 15 2010): The Punjab government has proposed to enhance the education budget for the financial year 2010-11 to Rs 23,300 million as compared to the last year's provision of Rs 21,525 million in the revised budget of 2009-2010. A substantial amount of Rs 6350 million has been allocated for the year 2010-11 for completion of maximum ongoing schemes and initiation of new schemes especially in college education.

According to the budget document, major initiatives have been taken in the budget includes Internal Merit Scholarship for Professional Students and to recognize the recognize the brilliance of talented students, a scheme for grant of scholarship for professional students has been included in the Development Programme 2010-11.

The focus of the government is on the primary and secondary education and the government is committed to provide science labs in secondary schools and to improve existing science labs in secondary schools and to strengthen practical education, about 1000 high and higher secondary schools having highest enrolment will be provided quality science equipment in the first phase. Standardised practical books will also be developed under this scheme.

Punjab Government has embarked upon a comprehensive plan to enhance the quality college education with special focus on improvement of physical infrastructure of Colleges. To complete the schemes under Punjab Education Sector Reform Program (PESRP) Phase-l, an allocation of Rs 1132 million has been earmarked for the provision of missing facilities and in other colleges an amount of Rs 1337.247 million has been allocated.

Higher Education Department has also decided to introduce 4-Years Bachelor Program in the public sector colleges throughout the province. For the purpose 26 colleges has been identified so far. The scheme would be extended to all the colleges of the province in] coming years.

In order to promote Higher Education in the Province it has been decided to provide graduate facility to all the colleges at District Headquarters, for this purpose, 24 sites have been identified where post graduate facility is not available either for male or for female populations area.

The government is committed to develop an enlightened and prosperous Punjab with improved governance, equitable access, quality education and ensuring achievement of Millennium Development Goals (MDGs) by 2015. The primary focus is on the poor quality education in the Province. In order to better equip the students with I.T. Education, 515 I.T. labs are being established in elementary schools in 2010-11.

Daanish School and Center of Excellence Authority has been established recently in 2010. Fifteen Daanish Schools will be established and 72 existing schools will be converted into Centers of Excellence in Phase-l. Poorest of the poor will get education of International Standards in these institutions.

Punjab Educational Endowment Fund (PEEF) is an initiative of the Government of Punjab with the objective of providing scholarships/monetary assistance to talented and needy students for pursuing quality education with equal opportunities. To make it more efficient, transparent and autonomous in its functioning, the fund has been established under Section 42 of the Companies Ordinance, 1984.

PEEF was established initially with the seed money of Rs 2 billion. In 2009-10, Rs 2 billion were provided for the fund. In 2010-11, an amount of Rs 2 billion would also be added to the fund. Special treatment will be given to the students of fifteen less developed districts of the Southern Punjab.

Special quotas for orphans, children of Government employees (up to BS-14), disabled, minorities and widows have also been allocated. Bright and needy students of other provinces including Azad Kashmir will also be provided opportunities for higher education through this programme.

For the especial education Government is trying to create conducive learning environment for the disabled) so as to make them useful, self supportive and self reliant members of the society and to use their potential and skills in various spheres of life. A block provision with an estimated Rs 500 million has been made available in Development Program 2010-11.

The Special Education Department, on the analogy of School Education Department, intends to establish computer labs in all centers and schools for special students. Like normal students all the disabled ie Hearing Impaired, Visually Impaired, Physically Disabled, Slow learners and even Mentally Retarded students can benefit immensely and tremendously from I.T/Computer Technology/Internet, etc as supportive devices and soft wares make learning easy and even help rehabilitate special students.

In the ADP 2010-11, an amount of Rs 100 million has been allocated for the Pilot project. After successful completion of the pilot scheme, a full fledge scheme will be launched in this regard. Government of the Punjab intends to establish an International Standard Rehabilitation Centre for Disabled with approximate cost of Rs 1000 million. In this regard a Company under Article 42 of the Companies Ordinance has been established and funds amounting to Rs 100 million have already been transferred.

Eradication of illiteracy is critical for achievement of Millennium Development Goals. To provide yet another opportunity for out of school population to return to education, special efforts are being made. For this purpose, an allocation of Rs 800 million has been made in the development program 2010-11. The major projects are campaign for enhancement of literacy in four districts of Punjab Literacy Program (ALCs & NFBE Schools in 31 districts), Punjab Literacy and Livelihood Programs and establishment of 300 Adult Literacy Centers and 200 NFBE Schools at Brick Kiln areas.
 
Faysal Bank to take over RBS Pakisan

* Deal signed at a much lower amount than had been offered by MCB Bank

By Mushfiq Ahmad

KARACHI: Faysal Bank (FABL) and RBS Pakistan confirmed signing of an agreement on Wednesday, which will allow FABL to take over local operations of RBS, upon regulatory approval.

Both banks sent letters to the KSE, saying that FABL will acquire 99.37 percent holding of RBS Pakistan for a total consideration of EUR 41mn ($50.3mn), which culminates in a share price of Rs 2.5 and a P/B multiple of 0.56x.

The regulatory approval is expected by the third quarter of current calendar year.

“This takeover appears to be the cheapest amongst the domestic transactions in the recent past,” said Mustufa Bilwani at JS Research. During the economic boom (FY03-FY08) there were a large number of private sector acquisitions in the banking sector, including those of Union Bank, Prime Bank, PICIC & MCB Bank (20 percent strategic stake).

These transactions carried out an average premium of 4.5x BV while banks were then trading at an average PBV of 2.2x.

The acquisition would take FABL’s branch network from 134 to 213. FABL would also leapfrog four places to seventh, in terms of total gross advances in the industry, which would rise to Rs 154 bn. In terms of deposits, the bank would move up one place to the 10th, with combined deposits reaching Rs 175 bn; and it would also jump to 10th place in terms of assets.

This was the second time the bidding took place, after an earlier bid won by MCB Bank failed to go through due to regulatory issues last year. MCB had agreed to pay $87mn or Rs 7.3 bn (Rs 4.22/share) for the bank which translated to a P/B multiple of 0.73x. However, the agreement lapsed following the failure to acquire NOC from the State Bank of Pakistan (SBP).

Kamran Rehmani, an analyst at First Capital Equities, said the new deal price was lower than that with MCB primarily due to deterioration in micro-level performance indicators of RBS Pakistan.

The acquisition will ultimately enable FABL to enjoy the prime branch location benefit from RBS Pakistan’s network. Interestingly, Faysal Bank has added a total of 79 branches in last 4 years (2005-08) with a total cash outlay of around Rs 2.8 billion.

“FABL would benefit from RBS’s low-cost deposit franchise,” said Rehmani. In 2009, the cost of deposits for both RBS Pakistan and FABL was respectively 6.8 percent and 8.2 percent. That said, combined cost of deposit would be favorable for FABL, he added.

RBS Pakistan has 1,717,981,391 ordinary shares listed on the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange.

Commenting on the sale, Chairman of RBS Pakistan, Muhammad Aurangzeb, said, “We are delighted to confirm that today we have successfully entered into a sale agreement with Faysal Bank for RBS Pakistan which comprises of Retail, Commercial, Islamic and onshore GBM and GTS businesses in Pakistan. Faysal Bank will be an excellent owner of the strong customer franchise we have established here in Pakistan. I am particularly pleased that our staff and customers will become part of one of the country’s progressive and growing banks which has such clear ambition to grow further in the local banking and financial services sector.”

President & CEO of Faysal Bank, Naved A. Khan, said, “The acquisition will significantly contribute to Faysal Bank’s development and will be a major catalyst in achieving our growth strategy. Whilst expanding our geographical footprint, touch points, customer base and product portfolio, this acquisition will boost our ability to raise the bar of our service levels. Furthermore, employees of the combined entity could have potentially greater career opportunities and development options.”

This agreement with Faysal Bank follows the completion of the strategic review and the announcement on 26 February 2009 that RBS was to dispose of its Retail & Commercial businesses across Asia along with the decision to exit its wholesale banking businesses in Vietnam, the Philippines, Taiwan (except the Securities business) and Pakistan in an effort to refocus the group’s geographic reach across a smaller number of key markets.

Daily Times - Leading News Resource of Pakistan
 
Pakistan's FDI sees big drop in first 11 months

The Foreign direct investment ( FDI) in Pakistan dropped by 39 percent to 2.03 billion U.S. dollars during the first 11 months of the current fiscal year ( July 2009 to June 2010) from 3.33 billion in the same period of last year, economists said Wednesday.

There was an outflow of 133.8 million of portfolio investment during these 11 months, which was, however, much lower than the outflow of 1.103 billion in the same period last year, said a report in the Daily Times.

Total foreign investment registered a fall of 14.8 percent to 1. 896 billion from 2.227 billion during the first 11 months, mostly concentrated in the services sector and little invested in the manufacturing sector.

This trend is harmful for the country in the long run because these investments create few jobs, but generate handsome profits in the country, which is then sent abroad, said an economist.

In a breakdown, oil and gas exploration sector attracted 653.9 million FDI, telecommunications 378.7 million, financial business 153.8 million, transport 115.5 million, paper and pulp 80.7 million, construction 95.5 million, chemicals 84.4 million, trade 103.9 million, petroleum refining 79.4 million, personal services 56.9 million, food industry 71.9 million and textiles 24.4 million.

There was an outflow of 21.2 million dollars from the thermal power generation sector. Besides, there was an outflow of 93.1 million from the IT service industry.

The economist said that most of these sectors are not labor- intensive and, therefore, do not contribute significantly to job creation efforts of the government. He said it was necessary for the government to improve infrastructure and ensure elimination of energy shortages in order to attract substantial foreign investment in the manufacturing sector.

The United States, with an investment of 521.8 million dollars, continued to be the largest source of foreign investment for Pakistan, he said.

Pakistan's FDI sees big drop in first 11 months _Latest News--China Economic Net
 
60pc economy out of tax net

By Kalbe Ali
Thursday, 17 Jun, 2010


ISLAMABAD: Principal adviser to the Finance Ministry Saqib Shirani on Wednesday said almost 60 per cent of the economy was out of the tax net and stressed the need of putting the house in order.


Speaking at a seminar on Analysis of Federal Budget 2010-2011, he said 65 per cent of the budget went to debt retirement, defense expenditures and the current expenditures of the government.


He informed the seminar that the defence expenditure was more than 20 per cent of the budget.“The total defence budget is more than Rs675 billion and not Rs470 billion,” he told the seminar, whereas the largest allocation is for debt-servicing.


The seminar was organised by Sustainable Development Policy Institute (SDPI) in collaboration with the UNDP project of Strengthening Democracy Through Parliamentary Development (SDPD) at Pakistan Institute for Parliamentary Services Hall, Parliamentary Lodges.


Less than half a dozen parliamentarians attended the seminar.


He said that debt servicing ate up around 28 per cent of the budget, while the state owned enterprises made annual loss of Rs240 billion whereas the mismanagement at the public procurement procedures caused a loss of around Rs330 billion to the national exchequer. “With all these expenditures in hand there is hardly any substantial room left for development activities,” Mr Sherani said.


He said war on terror, energy crisis and decline in investment had an adverse impact on the economy.


The SDPI Executive Director Dr Abid Qayyum Suleri said that making the 2010-2011 budget was as painful for the government as it was for the people because of difficult situation.


Former chief economist of Planning Commission Dr Pervaiz Tahir said that it was doubtful that the Parliament would do anything more than putting its stamp of approval on the budget document.


Dr Nazia Salim from Lahore FC University expressed doubts on the capacity of provinces to spend PSPD money on education and health. She said that 70 per cent employment in Pakistan was in informal sector. She criticised the government for not placing defence budget for discussion in the Parliament.

DAWN.COM | Business | 60pc economy out of tax net
 
Installation of 100 KW on-grid solar power plant planned

ISLAMABAD: Following the initiatives of power generation from alternative resources, the government is going on to initiate the installation of 100 KW on-grid solar power demonstration unit at Pakistan Engineering Council (PEC) Headquarter Islamabad with financial grant of Japan International Cooperation Agency (JICA), official documents available with Daily Times revealed. The project ‘PEC Initiative for Promotion of Solar Power in Pakistan (on-grid solar power system)’ will require a funding of Rs 236.209 million – out of which JICA will provide Rs 233.209 million and the local component will be financed by the PEC through their own resources. The grid connected PV system will be installed along with its configuration by the experts from donor country and local manpower. This project will also provide an opportunity to different stakeholders and users to observe the functioning of on-grid solar-based energy system and to popularize the use of solar energy, the documents further revealed. Official sources told Daily Times that an advertisement was floated in order to invite proposals for installation of roof mounted Solar Electricity System on P-Block (Pak-Secretariat) on Build-Own-Operate-Transfer (BOOT) basis. Eight companies submitted their proposals in response to the advertisement. No company agreed to install on BOOT basis. Further the detailed review of the quotations revealed that the lowest quoted offer will generate electricity at about twice the rate of the IESCO. This was due to high initial investment involved, the sources maintained. Subsequently, the JICA indicated their willingness to provide Grant Aid for the installation of Solar Electricity System on the rooftop of Planning Commission’s building under their project for “Clean Energy Promotion using Photovoltaic System in Asia”. The application form for “Grant Aid from Japan” was submitted by the Planning Commission on June 19 2009 to Embassy of Japan/JICA through Economic Affairs Division. The PEC also requested for a similar unit for their building and the agreement with the JICA has been signed. The country is confronting a great power shortage problem during the last few years and this shortage is growing to increase further if effective measures are not planned urgently. The government is considering and planning alternate renewable energy sources including solar energy to overcome this shortage. ijaz kakakhel

Daily Times - Leading News Resource of Pakistan
 
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