Pakistan's Economy - News and Updates

[Aeon]

Agreement signed for 106MW project
Published: December 28, 2010

LAHORE - WAPDA and SAMBU-SARCO, joint venture of a Korean and Pakistani firm, signed Rs 7.52 billion agreement for 106MW Golen Gol Lot-II Hydropower Project at Wapda House here Monday.

Wapda GM (North) Projects Fazal-e-Mabood and SAMBU Board of Representatives Chairman Oh Sung Hoon signed the agreement on behalf their respective sides. Golen Gol Lot-II involves construction of diversion weir, intake, gravel trap, sand trap, headrace tunnel, pressure shaft, pressure tunnel and roads. The construction work of Wapda offices and colonies for the project is at the advance stage of completion.

On this occasion, WAPDA Member (Water) Syed Raghib Abbas Shah dilated upon the significance of the Project and hoped that joint venture would complete the works in accordance with schedule.

The Golen Gol Hydropower Project is a part of least-cost energy generation plan, being executed by Wapda on priority basis to harness the indigenous hydropower resources of the country with a view to improving the ratio of hydel electricity in the National Grid, he added.

The project is located on the River Golen Gol, a major tributary of the River Mastuj in Chitral district of Khyber Pakhtunkhwa about 380 kilometres from Islamabad. On its completion, the project would generate about 436 million units of electricity (Gwh) to earn revenue of about Rs 1b annually.

 

[Marxist]

IMF extends Pakistan loan as economic reforms drag

Pakistan's fiscal deficit may exceed 7% of economic output, endangering its standing with international donors, due to a delay in implementing a reformed general sales tax, analysts said on Monday.

The International Monetary Fund said its executive board approved a nine-month extension of Pakistan's loan to give authorities time to finish the reforms. The loan program was scheduled to end this year, but will now run through September 30, 2011, the IMF said.

"The extension will provide time to the Pakistani authorities to complete the reform of the general sales tax, implement measures to correct the course of fiscal policy and amend the legislative framework for the financial sector," the fund said in a statement.

The RGST, which is supposed to replace the current general sales tax, was originally scheduled for implementation in July, but has been delayed several times since. Even its latest implementation date, January 1, now seems unlikely.

The delays will squeeze revenue while Pakistan's spending surges in the aftermath of floods that have caused almost USD 10 billion worth in damage.

The floods, which began in late July, rolled from north to south in an unprecedented tide of destruction, destroying or damaging more than 1.7 million homes, official figures show.

The revenue shortfall could push the budget deficit above 7% of gross domestic product (GDP), analysts estimate, compared with the 4.7% target agreed with the IMF for fiscal year 2010-11.

"The rising fiscal deficit is squarely against one of the main covenants of the agreement with the IMF, which is likely to delay future tranches," said Asad Iqbal, chief investment officer at Faysal Asset Management.

"If the IMF loses confidence in the government's ability to manage this deficit, funding from other foreign institutions is also likely to dry up, resulting in severe consequences for the country."

In November 2008, Pakistan agreed to an USD 11 billion bailout program with the IMF to avert a balance of payments crisis. It received the fifth tranche of the loan -- USD1.13 billion -- in May 2010.

The fund said its staff was "continuing its dialogue" with the Pakistani authorities on the loan program's next review.

The United States regards Pakistan as an important ally in its war on militancy in the region and the State Bank of Pakistan reported on Monday it had received USD 633 million in Coalition Support Funds from the United States.

But the delay in the sixth IMF tranche, a lack of foreign aid and the cost of rebuilding after August's floods has more than trebled government borrowing from the central bank, to a provisional Rs 32464 crore (USD 3.785 billion) from July 1 to December 11, compared with Rs 10600 crore in the same period last year.

To try and make up the shortfall, the government is considering a "Plan B," according to media reports.

This would end the current general sales tax exemptions that have been given to sectors such as textile and fertilizer production.

And while the government has not said there are alternatives being worked out, analysts said the exemptions may be quietly removed to avoid the kind of opposition that has greeted the RGST.

Imposing new taxes at the behest of the IMF, which is hugely unpopular in Pakistan, is a tough sell.

"There is no Plan B as far as I know," said a senior government official, who requested anonymity because of the sensitivity of discussing tax reforms.

Reform would help curb Pakistan's endemic tax evasion -- its tax-to-GDP ratio is around 10%, one of the lowest in the world. But the RGST bill, introduced in November after months of delay, is vigorously opposed by almost every political party.

And while it will probably eventually pass, no one can say when or in what form. Thus, Plan B.

The Federal Board of Revenue has the authority to remove exemptions without the approval of coalition partners to the government.

Analysts said there may not be enough political will to implement even that change.

"The government does not realize the gravity of the situation and the sense of compliance is not there as they are not in pressing need to get a tranche released from the IMF because of the improving current account balance," said Asif Qureshi, a director at Invisor Securities Ltd, adding that balance could easily deteriorate with the rise in oil prices.

Pakistan's current account has shown a surplus for the last three months. The IMF bailout was designed to shore up reserves and avert a balance of payments crisis.

IMF extends Pakistan loan as economic reforms drag - Reuters -

 

[Aeon]

Power tariff reduced by Rs 2.09 per unit in four months

ISLAMABAD (updated on: 2010-12-30 00:33:36 PST):

The government has reduced power tariff at the rate of Rs 2.09 per unit during the last four months under the monthly fuel price adjustment to provide relief to the consumers.

A spokesman of the Ministry of Water and Power said on Wednesday that under the monthly fuel price adjustment, 33 paisas per unit were reduced for the month of August, 36 paisas in September, 32 paisas in October and Rs 1.08 in November.

The reduction in power tariff during last three months (August-October) under the monthly adjustment has already been passed on to the consumers and the relief for the month of November will be given in the forthcoming electricity bills.

Minister for Water and Power Raja Pervez Ashraf has said that the government is determined to provide relief to the consumers in power tariff. The reduction provided under the fuel price adjustment will definitely give relief to the common man.

He said that all the resources were being utilized to generate cheaper electricity. The government had decided to change its present energy mix to enhance hydel, coal and power generation.

Cheaper electricity is only possible when the generation from hydel, wind and coal will be 70 per cent of the total power generation and the steps are being taken in this regard, he added.

Currently this ratio is only 30 per cent of the total generation. Khan Khawar hydro project of 72 MW has started its test generation. The work on 969 MW Neelam Jhelum Hydropower project, Jinnah hydro project, and Allai Khawar hydro project is in progress on fast track basis. Diamer Basha Dam of 4500 MW and Kohala hydro project of 1100 MW will start soon.

Raja Pervez said that wind and coal projects were also being given priority. He said that the government would fulfil its commitment of uninterrupted and cheaper power supply to the people of Pakistan.

Copyright APP (Associated Press of Pakistan), 2010​

 

[Aeon]

350 megawatts power production by next year: KESC CEO

KARACHI (December 30, 2010) : Chief Executive Officer (CEO), Karachi Electric Supply Company (KESC) Tabish Gouhar has said that 560 MW under construction units will start producing 350 MW power by next year. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), Gouhar said due to short supply of gas the company has incurred additional expense of Rs 25 billion on furnace oil to keep its units operating during January to December 2010.

He noted that KESC is getting only 70 MMCFD gas against its agreed supply of 250 MMCFD gas. Oil prices are about 2.5 times higher as compared to gas and still KESC is running its units on oil for the sake of general public. He said the efforts are underway to import Liquefied Natural Gas (LNG) to reduce its dependence on government for supply of gas and oil.

He said that around 50 percent of KESC units are closed due to short supply of gas. If we get required gas supply we will reduce load-shedding. Gouhar said that only three hours load-shedding is being carried out in the city and that too due to the shortage of funds to pay oil bills. However, the industrial areas are exempted from load-shedding, he added.

Gouhar announced to carry out a campaign against kunda-system particularly in the areas of Mehran Town adjacent to Korangi Industrial Area from January 1, 2011. Gouhar said that there are 2.3 million consumers of KESC and around 500,000 Kundas are being used in the city. Efforts are underway to remove the latter.

He advised the KCCI members to share the information of their future expansion plans such as setting up new units with the KESC. He agreed to form a committee comprising of representatives of KESC and KCCI to sort out problems being faced by business community.

Leader of businessmen group, Siraj Kasim Teli advised KESC chief to replace 250,000 old electricity meters with new ones. President KCCI, Saeed Shafiq said that the chamber has received many complaints regarding over-billing without meter reading. He advised KESC to set up an independent meter-testing laboratory to test meters in case of complaints.

Copyright Business Recorder, 2010​

 

[Aeon]

Rs11bn for railways approved by cabinet

ISLAMABAD (30th December 2010): The federal cabinet approved on Wednesday a Rs11.1 billion bailout package for the Pakistan Railways to enable it to repair 145 locomotives, improve dilapidated tracks and maintain strategic fuel reserves.

A meeting of the cabinet presided over by Prime Minister Yousuf Raza Gilani also enhanced the railway’s overdraft facility from the State Bank to Rs10 billion which would be converted into a long-term loan.

The cabinet decided to take up restructuring plans for the railways, Pakistan Steel Mills and Pepco prepared by a committee at its next meeting expected in the second week of January.

Restructuring plans for five other loss-making public entities — PIA, NHA, TCP, Utility Stores Corporation and Passco — will be taken up by subsequent cabinet meetings.

The cabinet ignored JUI-F chief Maulana Fazlur Rehman’s call for removing Prime Minister Gilani.

Information Minister Qamar Zaman Kaira told reporters after the meeting that Mr Gilani had been unanimously elected and he would continue to hold the office as long as he enjoyed the confidence of parliament.

Answering a question about the blasphemy law, he said: “No faithful, not even minorities, in Pakistan would ever allow anyone to change the law which was framed to prevent blasphemy of the Holy Prophet (PBUH).”

He said there was a similarity between the ongoing ‘Namoos-i-Risalat’ campaign and a joint political movement against the late prime minister Zulfikar Ali Bhutto in the name of Nizam-i-Mustafa which died down after Gen Ziaul Haq’s takeover.

The minister said the Aasia Bibi blasphemy case had been decided by a lower court and the accused had an opportunity to appeal in higher courts before seeking pardon from the president who seldom accepted such pleas.

He said an investigation into the murder of former prime minister Benazir Bhutto was in final stages and whoever, including former president Pervez Musharraf, was found involved would be punished under the law.

Mr Kaira said the reformed general sales tax bill had not been abandoned but shelved for the time being because of opposition by most parties in parliament.

He said the government had decided to consult all parties on the need to reform the taxation system in order to revive the economy.

The cabinet ratified the Saarc Agreement on Trade in Services and an additional protocol of an agreement on simplifying visa procedure for businessmen of ECO member states.

APP adds: While agreeing to help the railways meet its immediate needs to keep it running till the implementation of the restructuring plan, the cabinet said it might divert resources from uneconomical to revenue-generating sectors and adjust fares to ensure feasibility of trains with least burden on the users.​

 

[ANG]

Hi, like usual Pakistan seems to be # 1 in all the wrong indices. Take care.

Interactive: U.S. slips to historic low in global corruption index | Reuters

 

[foxhound]

Pakistan exports surge ahead at a robust paceAPP
December 29, 2010
ref:Pakistan exports surge ahead at a robust pace | Business | DAWN.COM

Export items like, bedwear, readymade garment, rice other varieties, petroleum top naphtha, rice basmati, raw cotton and towels, were among the top 10 export items during this month. -APP File Photo

KARACHI: Pakistan’s exports showed continued strength as is evident from the latest trade data available.

According to the latest figures provided by Trade Development Authority of Pakistan (TDAP), exports from Pakistan during November, 2010 were $1,776 million, which is 17.04 per cent higher than that of November, 2009.

The cumulative exports for the period July-November, 2010 totaled $ 8,883 million, as against $ 7,533 million during the corresponding period of last year, showing an increase of 17.92 per cent.

Textile sector was the main strength behind this surge, as all its sub-sectors showed significant increase vis-a-vis November 2009, including cotton, cotton yarn, cotton cloth, knitwear, and bedwear.

Growth in export figures also saw an increase in import figures, especially in the import of raw materials.

Imports in November, 2010 were $3,125 million, being 21 per cent higher than imports in November, 2009.

For the period July-November, 2010 imports totaled $ 15,374 million as against $ 13,086 million in the same period last year, showing an increase of 17.48 per cent.
Major commodities driving import figures higher were crude petroleum and petroleum products, sugar, plastic materials, iron and steel, and synthetic a artificial yarn.

Groupwise exports of Pakistan during the month of November 2010 and its comparison with 2009 shows a rapid growth in export of petroleum group which has recorded a growth of 61.9 per cent, while export of textile and clothing group reached the level of $ 1.02 billion and recorded a growth of 19.6 per cent of the same month of last fiscal year.
Analysis of the top 10 highest export value products during the month of November show that the main drivers of this export growth for the last month were: cotton yarn, which earned nearly $ 181 million in export, showing over 54 per cent growth; knitwear, which crossed $161 million registered 9 per cent growth; cotton cloth, which is the third highest export product crossed $161 million mark, registered a growth of 29 per cent.
While other important export items like, bedwear, readymade garment, rice other varieties, petroleum top naphtha, rice basmati, raw cotton and towels, were among the top 10 export items during this month.

Similar is the case with consolidated export figures for July-November period, which was $ 8.88 billion, which is 17.9 per cent higher than same period last financial year. Knitwear and cotton cloth were the driving agents in reaching this level of export, their export value were $928 and $901 million, respectively.

Bedwear, cotton yarn, readymade and garments were the items which have crossed the $ 600 million mark during the initial 5 months of the fiscal year 2010-1

 

[kugga]

Talking to reporters here on Sunday, he said the transit trade was imperative for sustainable development of the port.

He said that he had suggested to British officials that fuel should be supplied to Nato troops battling the Taliban in Afghanistan through Gwadar port because doing so would be economical.

Nawab Raisani said the Balochistan government was ready to provide security to Nato vehicles travelling through Gwadar. “The US and Nato have to only invest $1.5 billion for construction of roads and then they can easily supply fuel to their troops in Afghanistan from Gwadar,” he said.

He said the roads had been adversely affected by heavy Nato containers and oil tankers passing through Balochistan.

Regarding the Reko Diq project, Nawab Raisani said when the country could successfully enrich uranium it could also run gold and copper mines.

He said that he had thoroughly discussed the project with scientist Dr Samar Mubarakmand.

He said that if the Tethyan Copper Company refined 110,000 tons of ore its income would be only $78 million and if the government of Balochistan refined only 15,000 tons of ore its income would be $209 million.

Nawab Raisani said that no compromise would be made on the resources of Balochistan and the rights of people.

He reiterated the demand for a new social contract among the federating units to steer the country out of the prevailing political crisis.

“The new social contract under the 1940 Resolution offers solution to all ills of the country,” he said.

He said the demand of the new social contract by political parties was endorsement of his old stance.

He said the federal government had released Rs1.5 billion to the National Highway Authority for the construction of highways in Balochistan to lessen the sufferings of the people.

 

[Omar1984]

Punjab delegation to hold investment meet in Dubai ​

Dubai A huge delegation of top Pakistani businessmen led by Punjab Chief Minister Shahbaz Sharif will visit Dubai from next Saturday to the following Monday to lure investors and boost trade relations, Gulf News has learnt.

The highlight of the visit will be an investment conference at Emirates Towers Hotel on Monday. The conference will be attended by potential investors, both Pakistani and expatriate, and officials from the Dubai government, the Dubai Chamber of Commerce and Industry and the Dubai Department of Economic Development.

More than 100 businessmen and the Punjab government officials will be among the delegation. The event is being organised by the Punjab Board of Investment and Trade (PBIT).

During the visit, Punjab Chief Minister Sharif will also hold talks with the Dubai Roads and Transport Authority (RTA) on co-operation to develop a metro system in Lahore similar to the Dubai Metro.

Traffic congestion

"Sharif will meet the RTA official and visit the Dubai Metro as he is interested in having a similar metro system in Lahore, which is facing acute traffic congestion," a diplomat at the Pakistan Embassy told Gulf News.

Apart from the investment conference, the businessmen are also expected to sign some business deals and memoranda of understanding with various business groups in Dubai.

"The purpose of the visit is not only to attract investement, but also to improve trade ties and raise exports from Punjab to the UAE," he said.

Pakistan's Punjab province is becoming a progressively more significant player on Asia's economic map. In 2010, the province with 92 million people is expected to exceed Sri Lanka, Nepal and Bangladesh in terms of the value of its gross provincial product.

"Punjab believes in free trade where there are no restrictions on exports or imports. We also welcome foreign direct investments and do not restrict the repatriation of profits and capital," said Sharif in a statement.

He added that Punjab has experienced an average growth rate of about 7.5 per cent since 2003.

As a largely agrarian province which is self-sustaining, Punjab enjoys an abundance of food and livestock output.

Some of the world's biggest crops are found here in rice, cotton, wheat, dairy and meat. It also has various mineral resources and a very large skilled labour force.

Flood aid in focus

More than 2,000 delegates from 52 countries are participating in the 38th India, South Asia, Africa and Middle East (ISAMEE) Forum Pakistan in Dubai to talk about investment projects and flood relief efforts in Pakistan.

About 800 delegates from Pakistan and India will discuss possibilities for initiating goodwill, economic and social welfare projects between the two countries.

The forum is being organised by the Lions Clubs International with the objective of portraying Pakistan's image as a peaceful country.

 

[Brotherhood]

Pakistan to increase trade with China: PM - People's Daily Online January 09, 2011

Pakistani Prime Minister Yousuf Raza Gilani Saturday underlined the need for doubling trade with China from current 7 billion U.S. dollars to 15 billion U.S. dollars in the shortest possible time.

Talking to a visiting 100-member Chinese youth delegation, the prime minister said 36 projects have been identified for the next Pakistan-China Five Year Development Program (2012-2016).

"These include major projects in education, health, energy, Information and Communications Technologies (ICT), transport, agriculture, and water conservancy," Gilani said.

He said Pakistan has also set priorities for China's participation in the reconstruction effort in the flood affected areas, agriculture, highway networks, energy and finance and banking.

"We will set up a new Energy Cooperation Mechanism which will promote cooperation in conventional, renewable and civil nuclear energy," said the prime minister.

He said the Industrial and Commercial Bank of China (ICBC) has decided to open branches in Pakistan, hoping that Chinese bankers would work towards promoting closer financial and banking ties between Pakistan and China.

"We are grateful to China for giving moral and practical support to Pakistan in the fight against terrorism," he said.

Gilani said Pakistan and China are both committed to fighting the forces of terrorism, extremism and separatism.

"The youth of the two countries has a special responsibility to advocate the values of tolerance and nurture a culture of harmony within societies and amongst members of the international community," he said.

The prime minister said the year 2011 is a special year for Pakistan and China as he himself and Chinese Premier Wen Jiabao in his December visit designated it as the Pakistan-China Friendship Year to celebrate the 60th anniversary of the smooth, successful and ever-blooming diplomatic relations between the two countries.

He said that youth would be the focus of the Friendship Year and special attention is being paid to a number of youth-related matters including contacts between universities, think tanks, mass media, and film and television.

Gilani said Pakistan will also send 100 middle/high school students to China for understanding of the Chinese way of life.

He said there are 6,000 Pakistani students in China and the country wants to increase the number to 10,000 as the Chinese educational institutions are becoming more attractive for Pakistani students.

The prime minister also thanked Chinese premier for announcing 500 government scholarships for Pakistani students during his recent visit to Islamabad.

Source: Xinhua

 

[bc040400065]

Exports surge by 22.66pc in 7 months
Staff Reporter


Islamabad—Country’s exports surged by 22.66 percent during first seven months of the current fiscal year as compared to the corresponding period of last year. Exports from the country during July-January(2010-11) stood at US$13.227 billion as against the exports of US$10.784 billion recorded during July-January (2009-10), according to data released by Federal Bureau of Statistics (FBS) here on Wednesday.

Imports into the country during the period under review also witnessed positive growth of 16.73 percent by growing from US$19.315 billion in 2009-10 to US$ 22.546 billion during 2010-11, the figures revealed. Based on the figures, the trade deficit stood at 9.318 billion, showing an increase of 9.23 percent over the deficit of US$8.530 billion recorded during last year.

Meanwhile, exports during January 2011 surged by 38.22 percent as compared to the exports of the same month of the last year. Exports during January 2011 were recorded at US$2.328 billion against the exports of US$1.684 billion in January 2010. Imports during January 2011 were recorded at US$3.444 billion against the imports of US$3.320 billion during January 2010, showing an increase of 3.72 percent, the figures revealed.

As compared to the exports of $2.126 during December 2010, the exports during January 2011 increased by 9.51 percent. However, the imports declined by 8.18 percent during January 2011 as compared to the imports of US$3.750 billion recorded during December 2010.

The government with the help of stakeholders, recently prepared a comprehensive road map regarding Trade policy framework to propel the exports of country with identifying new markets for our products. The government has already declared year 2011 as the year of exports with main focus on export promotion for the economic development of the country.
Exports surge by 22.66pc in 7 months

 

[bc040400065]

Forex reserves rise to record $17.44 billion
By Reuters
Published: February 18, 2011

KARACHI: Foreign exchange reserves rose to a record $17.44 billion in the week ended February 12, up from $17.31 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $13.91 billion from $13.76 billion, while those held by commercial banks fell to $3.53 billion from $3.55 billion, said Syed Wasimuddin, chief spokesman for the central bank.

“Foreign exchange reserves rose to a record because of a rise in remittances and increasing exports,” added Wasimuddin.

In the currency market, the rupee weakened on Thursday amid higher dollar demand from importers because of rising international oil prices, but dealers said the rupee is expected to move in a narrow band in the short term.

The rupee closed at 85.45/50 to the dollar, down from Tuesday’s close of 85.25/30. It closed at 84.78/83 to the dollar on Friday, the highest close since May 25, 2010.

Officials and dealers said a record inflow of remittances, strong foreign exchange reserves, healthy exports and a current account surplus were behind the rupee’s gain in value in recent days.

Remittances were recorded at $6.12 billion during the first seven months of fiscal year 2010-11, up 17.7 per cent from the same period last year, according to data from SBP.

In the money market, overnight rates closed at its top level of 13.90 per cent, compared with Tuesday’s close of 11 per cent amid tight liquidity after scheduled outflows of Rs27.3 billion ($319 million). Dealers said there were scheduled outflows amounting to Rs22 billion on Friday.

Published in The Express Tribune, February 18th, 2011.

Forex reserves rise to record $17.44 billion – The Express Tribune

 

[Jango]

Forex reserves rise to record $17.44 billion
By Reuters
Published: February 18, 2011


Reserves held by the State Bank of Pakistan (SBP) rose to $13.91 billion from $13.76 billion,[/url]

How did it rise?

 

[saroshshahid]

Pakistan tabb tak tarraqi nhi kar sakta jab tak hamarey leaders nhi thk hotey........
Imran Khan would be the best i think... what are ur opinions on this

 

[Karachiite]

Self Delete

Wrong thread.