Pakistan's Economy - News and Updates

[bc040400065]

Rs 1604b tax target; 50pc sugar subsidy withdrawn
Published: March 10, 2011

ISLAMABAD-Coming hard on the tax officers, Federal Minister for Finance and Revenue Abdul Hafeez Shaikh Wednesday said Federal Board of Revenue had to achieve the annual tax collection target of Rs 1604 billion at every cost. Addressing the Chief Commissioners Conference of Inland Revenue Service on Wednesday, the finance minister said tax officers should work efficiently regarding tax collection otherwise they should quit their offices. He said country was facing several challenges, however, we need determination to resolve the economic issues, he added.
He asked the Chairman of Federal Board of Revenue (FBR) to assign revenue collection target to the tax commissioner and seek monthly reports from them in this regard. The government would give reward to officers, who would achieve the tax collection target, he said.
The Finance Minister cautioned the tax officers to focus on their working instead of watching television or reading newspapers at their offices. He said all the officers should have to be more alert and active and warned there will be zero tolerance for inefficient officers.
The people want that we have to be independent and in this regard have to generate our own resources, he said, adding that we are ready for negotiating with anyone regarding economic situation. He vowed that all the rich people would be brought under tax net and the collected money would be spent on the welfare for the poor.
About tax to GDP ratio, Hafeez said countries like Pakistan had increased the said ratio to 15 per cent while in some cases it is around 20 per cent. “If other countries could enhance the tax to GDP ratio, then why can’t we,” he questioned.
Earlier, Chairman Federal Board of Revenue, Salman Siddique informed that the government would increase the General Sales Tax to 16 per cent from existing eight per cent besides withdrawing 50 per cent subsidy on sugar. Market sources said the decision would result increase of Rs 5 per kilogramme.
He said the government is trying to broaden the existing tax base, as work is already started in this regard, he added.
On withdrawal of GST exemptions, FBR Chairman informed that some exemptions have been allowed under SROs and these can be withdrawn through the same. However, some GST exemptions were allowed through legislation and these would require amendments through parliament in the relevant legislation for withdrawal.

Rs 1604b tax target; 50pc sugar subsidy withdrawn | Pakistan | News | Newspaper | Daily | English | Online

 

[ejaz007]

Bank AL-Habib declares bonus, cash dividend
Staff Report

KARACHI: Shareholders at the annual general meeting of Bank AL-Habib Thursday approved the annual accounts for the year ended December 31, 2010. The payment of 20 percent cash dividend (final) and the issue of 20% bonus shares were also approved. Deposits of the bank as on December 31, 2010 were Rs 249.774 billion and profit after tax was Rs 3.602 billion.

The bank has a network of 303 branches/sub-branches, which includes eight Islamic banking branches and wholesale branch in the Kingdom of Bahrain. A representative office in Dubai (UAE) was also opened during 2010.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

Korean co to facilitate Sheikhupura dry port

LAHORE: Korea Railroad Corporation will facilitate the Sheikhupura dry port trust to acquire four locomotives for operating first-ever private sector freight train operators for cost-effective and timely transportation of commercial and industrial cargo.

In this regard, a Memorandum of Understanding (MoU) was signed between Korea Railroad Corporation and the Lahore Chamber of Commerce and Industry (LCCI) Thursday, to act as facilitator to establish a modern and functioning Dry Port at Sheikhupura. LCCI President Shahzad Ali Malik signed MoU on behalf of the chamber while Korea Railroad Corporation (KoRail) was represented by Han Kwang Scok, General Manager Overseas Railways Business Department KoRail and Kim Dong IL, CEO, PAKOR Global Private Ltd, LCCI Senior Vice President Sheikh Mohammad Arshad and a large number of Executive Committee Members were also present in the MoU signing ceremony.

The initiative will open new opportunities for private investment in trade related infrastructure considered vital for economic competitiveness in the prevalent global market place.

Speaking on the occasion, the LCCI President Shahzad Ali Malik said that the sole objective of having another dry port is to make the trade and industry competitive by reducing delivery time and cost. He said that the project was well on way and it would be a fully equipped, state-of-the-art dry port that would be ensuring cost-effective and efficient logistic solutions to promote economic activities in the region. The LCCI President said that the successful models of private sector-managed dry port already exist in the shape of Faisalabad Dry Port and Sialkot Dry Port. He informed the participants that Faisalabad Dry Port has a capacity to handle 33,000 export cargo containers. It can handle as many as 5500 import consignments per annum, having a value of over Rs 80 billion. Same way, the LCCI President said, the Sialkot Dry Port can handle up to 29000 export cargo containers worth over Rs 46 billion. staff report

Daily Times - Leading News Resource of Pakistan

 

[Ababeel]

Experts welcome surge in foreign exchange reserves

ISLAMABAD: Experts here on Thursday welcomed the rise in Pakistan's liquid foreign reserves to $17.609 billion, an all time high in the history of the country and expressed the hope that this would give positive signals to investors about the country's economy and its improvement.

It may be mentioned here that Pakistan's liquid foreign reserves jumped by $239 million to the highest ever total of $17.609 billion on March 12.

According to federal Bureau of Statistics Pakistan's exports grew by 24.64 percent to $15.33 billion during July-February 2011 over corresponding period of the last fiscal year.

Welcoming the swelling in Pakistan's forex reserves to 17.609 billion, former Advisor to Finance Ministry and a financial expert Saqib Sherani attributed the growth in foreign exchange reserves to rising home remittances and export receipts.

He said that Government and the State Bank of Pakistan (SBP) launched Pakistan Remittances Initiative (PRI) to boost the flow of remittances which also helped increase the remittances and foreign exchange reserves of the country.

He also attributed the rise in the reserves of the country to the high growth in the export regime.

He expressed the hope that if this trend continues then exports would cross $24 billion during current financial year.

Saqib Sherani said that rise in the foreign exchange reserves would boost national economy, build confidence of investors on Pakistan's economy and generate economic activities for the prosperity of the country.

President of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Senator Haji Ghulam Ali also appreciated the increase in the Foreign Exchange Reserves and hoped this would act as a boost towards the national economy and prosperity of the country.

He called for taking the business community into confidence to boost the exports of the country.

He urged the government to maintain zero rate facility for the export oriented industries for further boosting the exports for the prosperity of the country.

"The increase in the foreign exchange reserves is a good omen for the country and its economy and FPCCI welcomes it", he remarked.

Copyright APP (Associated Press of Pakistan), 2011

 

[Indus Falcon]

U.S. to give China a pass on NSG commitments for Pakistan nuclear deal
Ananth Krishnan
BEIJING, March 20, 2011

Not to oppose China's building of two nuclear reactors in Pakistan

The United States has indicated it will not oppose China's building of two nuclear reactors in Pakistan, and will give Beijing a pass on its non-proliferation commitments by allowing the deal to go ahead in spite of concerns that it will violate international guidelines governing nuclear trade.

Last week, the International Atomic Energy Agency (IAEA) gave its approval to a safeguards agreement for two new reactors that China is building at Chashma. The deal, many countries say, goes against China's commitments as a member of the Nuclear Suppliers Group (NSG), which bans the sale or transfer of technology to countries that have not signed the Nuclear Non-Proliferation Treaty (NPT).

U.S. Assistant Secretary for South and Central Asian Affairs Robert Blake told journalists here he did not bring up the deal during talks with Chinese officials this week on South and Central Asia. While he reiterated the U.S. view that the deal was “inconsistent” with China's NSG commitments, he also mounted a defence of the need for the deal in a briefing with reporters, linking it to an energy crisis and instability in Pakistan.

“Considerable challenge”

“What I'd like to emphasise is that it's very important that, on the one hand, China observe its NSG obligations, but on the other hand, the international community do as much as possible to help Pakistan to meet its energy needs,” Mr. Blake said. “Pakistan is facing quite severe energy shortages in many parts of the country. So the United States has been, I think, in the lead in many cases in trying to help Pakistan to deal with those challenges, and to not only refurbish some of its existing capacity...but to look at new ways to help meet those energy challenges. But those remain a very considerable challenge in Pakistan, and that will be one of our highest priorities, going forward.”

While the American position was that the construction of the two new reactors, Chashma 3 and 4, would be “inconsistent” with China's NSG commitments, the U.S. had “also been very clear on the need to support Pakistan's energy development,” he said. Mr. Blake's comments mark a shift in the U.S. position over the deal, suggesting that the U.S. will neither oppose the deal nor question China over its NSG commitments.

Only last year, during a visit to Beijing in May, Mr. Blake stressed “it would be important that China seek the exception from the NSG,” just as the U.S. did for its deal with India. The NSG granted an exemption for India's civilian nuclear cooperation with the U.S. to go ahead in 2008, but only after more than three years of difficult negotiations and after India took on a range of commitments. But in recent months, the U.S. has appeared to shift its stand, amid pressure from Pakistan for a similar civilian nuclear deal and a move to bring back on track its ties with China. Following a strained year, the U.S. has been working to mend fences, also seeking Chinese support on North Korea and Iran.

Mr. Blake said on Friday the U.S. would also seek to work closely with China on South Asia. The U.S. believed that “coordinating our efforts in the region with major actors like China” was “very much in our own interest,” he said, adding that he welcomed China playing “an important role” in the region.

Mr. Blake acknowledged that India had expressed concerns about the deal, and “to hold China to its NSG commitments.” However, he said the Indian side also understood “that Pakistan has severe energy needs and that this affects internal stability.”

Asked about perceptions here that the India-U.S. relationship was aimed at China, he said the U.S. had “reassured our friends in China that growing relations between India and the U.S. will not come at China's expense.”

“We want to see the growth of our relations with India, our relations with China, and India's relations with China,” he said.

The Hindu : Today's Paper / NATIONAL : U.S. to give China a pass on NSG commitments for Pakistan nuclear deal

 

[Trisonics]

Sialkot’s declining sports industry


Pakistan’s eastern city of Sialkot has been a major source of sports goods for international sporting events for decades. Recent exports of sports goods have fallen to an average $290 million from $343 million over the past four years because of the decline in Pakistan’s share in international markets, according to Pakistan’s Federal Bureau of Statistics.

Sialkot

 

[RabzonKhan]

ANALYSIS: A word of cheer: industry looks up

Daily Times
Muhammad Aftab
March 28, 2011

Is Pakistani industry looking up despite continuing hurdles and hardships? A word of cheer: industry is looking up. The data of industrial output for the first seven months to January of the current fiscal (FY) 2011, indicates a positive turn of business for large scale manufacturing (LSM) industry. This is despite the new hurdle that oil prices are surging in the wake of the North Africa-Middle East turmoil.

The output of the LSM sector turned positive to the extent of 1.03 percent in seven months to January 2011 — a far cry from an actual decline of 1.77 percent during the like period of FY 2010, the State Bank of Pakistan (SBP) the central bank, reports. The quantum index number of LSM industries rose to 200.63 points during July-January 2011, compared to 198.59 points in the like period of 2010. The latest return to LSM growth this year is spearheaded by textiles, autos, chemicals, leather and electronics.

The ongoing North Africa-Middle East troubles are not only driving up the price of imported commodities, including food, but are seen as hitting exports quite hard.

It can, in fact, negatively impact industrial output, business turnover and the economy as a whole.

Alongside these new external factors, Pakistan is still undergoing one of its worst energy crises, taxes are rising, the budget deficit has widened and the government continues to be blamed for its failure to curb lawlessness, including criminals directly hitting industry and business.

The key sector of textiles, which has the biggest weight in the LSM basket, led the pack and came up with “a strong recovery” as its output turned from “a decline to a positive growth”, the SBP says. Textiles, enjoying a 32.6 percent weight in the overall LSM basket, rose 0.6 percent in the seven month period — up from a minus 2.0 percent in the like period of 2010.

Pakistani auto output was up 16.8 percent but this industry failed to match its 51.8 percent growth in the same period last year. But demand is rising. The growing electronics industry rose 6.2 percent on the back of higher consumer demand, compared to a 2.3 percent growth last year. Chemicals recovered significantly and recorded a 3.5 percent growth — up from 0.6 percent in the like period of FY 2010. The leather sector, including leather garments, was 14.2 percent — up from 9.1 percent in the same period last year. The food and beverages sector, which has a 19.1 percent weight in the LSM basket, was minus 2.0 percent. Its performance actually improved because the negative growth of the sector in FY 2010 was 8.5 percent.

The expanding pharmaceutical industry matched its growth of 5.7 percent this year, which was the same in the like period of last year. Unhappily, fertiliser output was minus 7.2 percent, compared to 5.3 percent last year. The sector has a weight of 4.5 in the LSM index.

The latest recovery, mainly, took place in January. The performance of the first six months of FY 2011 — July to December too was poor as the overall LSM output growth was negative. The growth turned positive in January 2011 alone, according to the SBP.

This positive development notwithstanding, the question now is whether LSM growth for the whole of FY 2011 will be able to match or exceed the actual growth of 2.34 percent in the whole of FY 2010. The economy can grow 2.5 percent this year. Will the LSM sector record a similar growth, exceed it or stay stunted?

One should listen to the finance boss, Finance Minister Abdul Hafeez Shaikh, when he says, “The government is trying to stabilise the economy and pursue its reforms agenda despite the shocks of this summer’s unprecedented floods and rising oil prices.” Pakistan’s GDP growth was affected to the extent of 2.0-2.5 percent because of the floods. In monetary terms, the damage was $ 10 billion, he says. In spite of this, the finance minister is upbeat over prospects for the recovery, growth and expansion of the LSM sector.

 

[Ababeel]

Services' exports surge 55.69 percent in 7 months

ISLAMABAD: Exports of services from Pakistan surged by 55.69 percent during the first seven months of current fiscal year as against the same period of last year.

The overall export of services was recorded at US$3.424 billion during July-January (2010-11) as against the exports of US$2.199 billion during the corresponding period of last year, According to data of Federal Bureau of Statistics.

The services that contributed in the positive growth in exports included transportation, exports of which grew by 6.15 percent by growing from US$740.456 million lat year to US$786.012 million.

The travel services exports increased from US$169.004 million last year to US$188.032 million this year, showing an increase of 11.26 percent.

The exports of communication services witnessed slight growth of 0.53 percent during the period by growing from US$143.969 million to US$144.737 million.

Exports of the construction services exports grew by 48.37 percent as these stood at US$13.172 million this year against the exports of US$8.876 million last year.

Exports of insurance services were recorded at US$27.229 million against exports of US$25.120 million, showing an increase of 8.40 million.

Similarly, computer and information services' exports increased by 8.04 percent, government services by 177 percent while the exports of other business service surged by 27.27 percent during the period, the FBS reported.

The service that witnessed negative growth in exports including financial service, exports of which declined by 54.20 percent.

The exports of financial services were recorded at US$33.852 million against the exports of US$73.914 million last year.

Royal ties and license fees decreased by 21.62 percent while the exports of personal, cultural and recreational services decreased by 75.97 percent.

However, on the other hand, the exports of services during January 2011 decreased by 71.63 percent as compared to the exports of December 2010.

Services exports during January 2011 stood at US$333.976 million in January against the exports of US$1.1777 billion in December 2010.


Copyright APP (Associated Press of Pakistan), 2011

 

[Abu Zolfiqar]

Sialkot’s declining sports industry


Pakistan’s eastern city of Sialkot has been a major source of sports goods for international sporting events for decades. Recent exports of sports goods have fallen to an average $290 million from $343 million over the past four years because of the decline in Pakistan’s share in international markets, according to Pakistan’s Federal Bureau of Statistics.

Sialkot

its difficult to compete with China; load-shedding during peak hours also may have had an effect

Inshallah the right steps will be taken to revive the industry

 

[bc040400065]

China's Three Gorges Corp ready to invest $15 bln in Pakistan energy sector
Thu Apr 7, 2011 7:29am GMT

REFILE-China's Three Gorges Corp ready to invest $15 bln in Pakistan energy sector | Energy & Oil | Reuters

 

[unicorn]

Shipload of rice from Pakistan sinks in Bay

Friday, April 8, 2011

Rice-laden ship Hyang Ro Bong is sinking in the outer anchorage of Chittagong Port. Photo: Anurup Kanti Das


A North Korean ship transporting 13,492 tonnes of rice imported from Pakistan for Bangladesh is sinking in the bay after it collided with a ship at the outer anchorage of Chittagong port late Wednesday night.

Almost three-fourths of the ship MV Hyang Ro Bong went under water by yesterday afternoon since the crack due to the impact could not be repaired in the face of strong current in the sea.

The rice could not be saved.

After day-long efforts to salvage the ship and bring it to shore with the help of Chittagong Port Authority (CPA), the officials of the ship's local agent Fortune Shipping gave up yesterday around 5:oo pm. They sent six divers to do the repair job.

Earlier in the morning CPA sent Fortune Shipping a letter asking to take immediate measures to repair the crack and bring the ship ashore.

Shoumen Chakravarty, manager of Fortune Shipping, told The Daily Star yesterday around 5:20 pm, “Most parts of the ship have sunk and there is no hope now as the Bay is still very choppy.”

According to Chittagong Port Radio Control, MV Hyang Ro Bong with 41 crew members and the rice hit the front part of MV Bongo Lanka, which was anchored at C-Anchorage, while entering the outer anchorage of the port around 11:30pm Wednesday.

The collision caused a crack in the engine room of MV Hyang Ro Bong and tilted it, said CPA Secretary Syed Farhad Uddin Ahmed, adding that the 31 crew members had been shifted to another ship.

CPA officials led by Deputy Conservator Captain Nazmul Alam and Harbour Master Captain AKM Jafar Ullah Chowdhury rushed to the spot immediately after the accident.

Shoumen said they tried to unload the rice but failed as the crane of the ship could not be operated due to generator failure.

A team comprised of CPA Dock Master Captain Faridul Alam, Magistrate Mohiuddin Al Faruk and Department of Environment (DoE) Deputy Director Jafar Alam visited the spot around 4.30pm.

A huge quantity of fuel oil was also found leaking in the Bay from the ship.

The CPA took steps to neutralise the oil to prevent pollution.

Captain Faridul said they are spraying oil spill dispersant.

CPA Secretary Farhad said a probe body comprised of representatives from CPA, Bangladesh Navy, Bangladesh Coast Guard and Mercantile Marine Department would be formed to investigate the accident.

 

[unicorn]

New car, new price: Indus Motors to launch new Corolla model
April 8, 2011

Indus Motor Company (IMC) has announced that it will unveil the new Corolla 2011 model next week.

The new XLi and GLi variants will offer new headlamps, sporty front grill and bumpers, along with redesigned tail lamps, according to a statement issued on Thursday.

IMC announced that the new increased prices of the Xli and GLi variants would be Rs1,399,000 and Rs1,529,000, respectively.

The company added that the price has been increased due to the inflationary trend that has put enormous pressure on IMC in the last one year.
The cost of just the local components/parts has increased by Rs40,000, claimed the press release.

The company also claimed to have been absorbing most increases in costs due to rising oil prices due and strong yen.

Published in The Express Tribune, April 8th, 2011.

 

[jjdoctor]

hm.... nice interesting information

 

[monitor]

Inflation outlook disheartening

Posted: 08 Apr 2011 11:36 PM PDT




KARACHI – The State Bank of Pakistan (SBP) has said that Pakistan’s economy will continue to grow at a steady pace, facing a number of domestic and external challenges in the current fiscal year 2010-11.
The State Bank of Pakistan published its report for the second quarter of FY11 on Friday.

The report found the revenue targets set under the tax reforms for the prevalent financial years are ambitious, warning that the planned official inflows from the IMF and other international financial institutions could be affected in case the government fails to implement the fiscal austerity measures effectively. “With fiscal pressures and below-target external funding, domestic financing pressures may increase; this will either crowd out the private sector further or result in unwelcome borrowing from SBP, which in turn may reverse some of the positive steps taken to date to address the country’s macroeconomic problems,” it said. The SBP has stuck to its earlier projection of Gross Domestic Product growth of 2-3pc for the current fiscal year (FY11), accounting for the catastrophic floods in Aug 2010. However, looking at inflation, the report said, “Although projections for FY11 have eased marginally to 14.5-15.5pc but it seems that inflationary expectations are becoming engrained”.
Despite expected decent growth in the agriculture sector, the SBP report highlighted three key risks in the present domestic and global economic environment. Firstly, it noted that Pakistan’s talks with the IMF have been difficult primarily because of socio-political resistance to paying taxes. Hence, it is not surprising that the programme is suspended, and even some of the recent tax measures may be viewed as second-best, being one-off in nature.
Secondly, due to the risk-averse behaviour of commercial banks it is expected that banks would channel increasing volumes of credit to the government, crowding out the private sector further because of a high fiscal deficit and blockages in external sector. Thirdly, if political uncertainty remains and spreads further in the Middle East/ North Africa (MENA) region, oil prices could increase even more sharply than the recent past. Although this will hurt the global economy quite severely, the impact on Pakistan could be disproportionately larger.
Finally, the uncertain investment horizon and an adverse law & order situation – related to the fight against extremism – will also strongly influence this outlook.
The report stated, “Looking ahead, perhaps measures like the withdrawal of exemptions from GST signal a more inclusive and aggressive intent for the FY12 Budget – recent FBR efforts to identify wealthy non-payers is a good sign in this regard”.
“Although we do not have formal data for the period Jan-Mar 2011, a preliminary assessment suggests that the external sector will remain comfortable, the report said adding that we remain cautiously optimistic about progress on the fiscal side, as shown by the recent fiscal measures to reduce the gap by Rs210 billion this fiscal year. On the banking side, the increase in textile lending may slow down as international cotton prices fall from their recent peak, and seasonal demand for credit eases.
“Despite the staggering humanitarian cost of the August 2010 floods, there is a possible upside for the agriculture sector. Other than better-than-expected wheat production this year, we are also optimistic about cotton, sugarcane and rice in FY12, it said.
In fact, recent weather conditions may help – the unexpectedly large snowfall this winter will help our kharif crops when the snow melts, while cotton could get a boost with the shift to BT cotton. Although targets for the next crop have not been firmed up yet, there is a view that the target for FY12 could be as high as 17.0 million bales, against FY11’s target of 14.5 million bales and actual output of 11.7 million bales. The possible upside to GDP in FY12 – if this were to happen – could be significant, it added.
The government appears to be working with key stakeholders (Pakistan’s political leadership) to implement policies, which may not get the necessary support from their financial and political constituencies. However, we remain optimistic that multi-partisan efforts will resolve this stubborn economic impediment. We hope that despite these fiscal challenges, the government continues to meet its commitment (to SBP) to stay below its end-September 2010 level of borrowing from the central bank, it opined.
“There are only three avenues that Pakistan can take to meet deficit targets – exceptional steps to increase fiscal revenues; reforming loss-making PSEs; and eliminating end-user subsidies. On the revenues side, although RGST has become the focal point, addressing revenue leakages and glaring exemptions (eg agriculture and ineffective taxation of properties) needs serious attention,” it suggested.
The report disclosed that the external sector is comfortable. During Jul-Feb FY11, Pakistan’s current account deficit was only $98.0 million, against $3,027 million in the corresponding period in FY10.
Strong dollar-denominated export growth of 20.3 percent (on the back of high prices of textiles), sluggish manufacturing and consumer demand (reflected in the 12.7 percent growth in imports), and strong remittances (up 18 percent over FY10); are primarily responsible for the improvement.
“Having said this, net foreign inflows in the financial account have declined sharply, as the stalled IMF programme has stopped inflows from other IFIs and bilateral donors. Nevertheless, the improvement in the current account has pushed Pakistan’s foreign reserves to record highs, while the Pak rupee remains stable,” it said.

 

[bc040400065]

ECC allows sale, export of 200,000 tons of wheat

ECC allows sale, export of 200,000 tons of wheat | Newspaper | DAWN.COM