Economic Progress (Part III) [Archive] - Page 4

Naresh

October 10th, 2008, 09:17 PM

KARACHI (October 10 2008): Pakistan's foreign reserves rose $190 million to $8.32 billion in the week that ended on October 4 from the previous week, the central bank said on Thursday. The State Bank of Pakistan said its own reserves rose to $4.87 billion from $4.68 billion previously, while those held by commercial banks were flat at $3.45 billion.

The foreign exchange reserves hit an all-time high of $16.5 billion in October last year, but have been falling since due to weak economic fundamentals, political uncertainty and security concerns. Asian Development Bank (ADB) on September 30 approved a $500 million loan to help Pakistan address the impact of high fuel and food prices on its people and the economy.

The loan is be reflected in the latest figures. Analysts said the rise can also attributed to banks being closed from October 1 till October 4 for the Eid holiday, marking the end of the Muslim fasting month of Ramadan. Pakistan needs up to $3 billion of foreign capital inflows to arrive quickly if it is to meet upcoming debt obligations.

The six-month-old civilian government, that has taken over from former army chief Pervez Musharraf, is banking on support from multilateral lenders and friendly governments. Sympathy for Pakistan's role as a frontline state in the war on terrorism should help it stave off a default, according to analysts, and potential donor governments are due to meet in Abu Dhabi in November.

The newly appointed finance advisor to the prime minister, Shaukat Tarin and central bank governor Shamshad Akhtar left late Wednesday to attend the annual International Monetary Fund (IMF) meeting in Washington on October 13, officials said, though the government has said it is not seeking an IMF support package.

http://www.brecorder.com/index.php?id=819195&currPageNo=1&query=&search=&term=&supDate=

PakNorway Ji :

I think that the report of the US Dollar 500 Million Loan being received by Pakistan is wrong as Pakistan’s Foreign Exchange Reserves have gone by US Dollars 190 Million only.

If the reported figure of US Dollars 500 Million is correct then in fact Pakistan’s Foreign Exchange Reserves have depleted which is not possible and thus I feel that the Figure of US Dollars 500 Million Loan being reflected in the latest figures is totally incorrect.

Cheers:cheers:

Nouman_26

October 11th, 2008, 09:05 AM

KARACHI (October 11 2008): The entire oil sector of Pakistan (E&P, Refineries-ex-Bosicor, and OMCs) marked a record profitability growth of 41 percent on year-on-year basis in FY08 with total profits amounting to Rs 114 billion. E&P secured the largest share of 68 percent in FY08 oil sector profits (down from 84 percent in FY07 due to increased share of refineries and OMCs in the total), whereas OMCs and Refineries stood second and third in the row.

All three listed OMCs combined punched in a spectacular profit growth of 206 percent in FY08. Contrary to FY07, sector's gross profits grew at a staggering 132 percent on yearly basis owing to a number of factor ie volumetric growth, ex-refinery prices, product margins and the most noteworthy one, repayment of the PDCs arranged by the government.

PSO, Shell and APL shared 64 percent, 24 percent and 12 percent of the FY08 overall profit pie. Khurram Schehzad, senior analyst at Invest Capital and Securities said that the profitability growth can be attributed to a number of factors, which fuelled bottom lines of the OMCs. Firstly, volumetric growth of POL products at 9 percent (triggered by FO 3 percent, HSD 11 percent and Mogas 27 percent) - along with increased sales of high-margin products like Lubes, Naphtha and CNG. This resulted in an extraordinary 35 percent on yearly basis rise in the sector's topline to Rs 688 billion, he added.

Secondly substantial after-tax estimated inventory gains of around Rs 13.7 billion owing to sharp rise in oil prices in the international market (average Arab Light rose 52 percent on yearly basis in FY08, leading to 71 percent average jump in ex-refinery prices of different POL products and 20pps rise in margins) against estimated inventory losses of Rs 2.9 billion last year (due to steep decline in oil prices). Therefore, FY07's inventory losses also resulted in low profitability base leading to a pronounced growth of 206 percent for FY08. Net after-tax inventory gains for PSO were estimated at Rs 10.7 billion (EPS impact Rs 62.5) while Rs 2.55 billion (EPS impact Rs 46.6) and Rs 0.41 billion (EPS impact Rs 8.5) for Shell and APL, respectively in FY08 - contributing 55 percent, 26 percent and 23 percent to PSO, Shell and APL's gross profits. As a consequence, gross margins of the sector leapt by 2.90pps to 6.96 percent in FY08.

Finally, the entire recovery of the previously lingering PDCs (completely paid by the GoP by Jun-08) led to only 15 percent on yearly basis rise in financial charges (61 percent in FY07), which further strengthened the bottom line of the OMCs. These factors made their way to the bottom line of Rs 21.8 billion in FY08 (net margins rose by 1.77pps to 3.17 percent) against paltry Rs 7.13 billion in FY07.

PSO, due to its largest share of above 70 percent in almost all POL products, grabbed 64 percent of the total sector's profitability (68 percent in FY07). Shell (10 percent profit share in FY07), managed to increase share to 24 percent in FY08 while APL (24 percent in FY07) bagged a slice of 12 percent in the OMC profits in FY08.

brightside.

October 11th, 2008, 09:06 AM

WTF? I didn't expect that! :sly:

siamu maharaj

October 11th, 2008, 04:48 PM

I was wondering how, cause most of their burgers contain bacon, which is their specialty.
So? Burger King sells Halal stuff in several countries. Still irrelevant as it's Hardee's that's supposedly coming.

siamu maharaj

October 11th, 2008, 04:51 PM

WTF? I didn't expect that! :sly:
What? A profit? Oil companies make insane amounts of money.

karachiite8heart

October 12th, 2008, 11:24 AM

October 14th, 2008, 05:49 AM

Agriculture, real estate to be taxed: Tareen

WASHINGTON, Oct 13: Prime Minister’s Adviser on Finance Shaukat Tareen pledged on Monday that the government would bring all sectors, including agriculture, under the tax net to strengthen the national economy.

“There will be no sacred cows,” said Mr Tareen while addressing a news conference after attending the annual meetings of the World Bank and the IMF in Washington.

“Not even agriculture?” he was asked. “No sacred cows. Real estate, agriculture, all will be taxed.” Mr Tareen categorically rejected speculative reports in the western media claiming that Pakistan is on the brink of bankruptcy. “Over my dead body,” said Mr Tareen when asked if Pakistan would go bankrupt.

Mr Tareen said the government had increased electricity tariff by 31 per cent, instead of the required 62 per cent.

“We decided to look back at further increase later and now that fuel prices are coming down, it will also reflect in energy policies. We may not have to further increase power rates.” The adviser said that the government could raise remittances by overseas Pakistani by $1.5-2 billion a year through procedural changes.

This, he said, would be done by asking countries like Saudi Arabia and UAE to allow Pakistanis to send their money through the host governments instead of private banks, which are expensive.

Mr Tareen said that while the State Bank was looking at measures to help the stocks market, “We are not here to protect a particular player but to create liquidity”.

The stock brokers, he said, were complaining that they were not getting loans from banks against their shares and collaterals.

“Complaints like this will be looked into,” he added.

Mr Tareen also rejected rumours that the government had asked for information on bank lockers or was freezing assets. “Absolutely wrong. All nonsense,” he said.

The adviser had a series of meetings with the World Bank, IMF, Islamic Development Bank and the British Department for International Development.

He also met finance ministers of several countries attending the meetings and also with senior officials of other international financial institutions.

“We are facing economic challenges, both on the fiscal side and on the balance of payment,” he said. “We did not pass on the increase in fuel and food prices on time.” Mr Tareen said the fiscal deficit stood at 7.4 per cent last year, but came down to 4.3 per cent due to the steps taken by the elected government.

The absence of inflows from multilateral agencies, lack of foreign direct investment, and the inability to access the international financial markets contributed to this crisis, he said.

The trade gap, he said, was over $20 billion last year and the current accounts deficits was a billion a month.

“It is quite a challenging job,” said Mr Tareen. “What the government has done is to pass on the increase in prices.” The tax and GDP ratio, he said, was 10.5 per cent and extremely low. Mr Tareen said the government was trying to deal with this by cutting down expenditure and by encouraging private-public sector partnership.

“Money could be used for poverty elevation, education and health.” Mr Tareen said help from the IFIs was forthcoming while the Friends of Pakistan group was meeting in Abu Dhabi next month to consider proposals for helping Pakistan.

The government, however, had also drawn back-up plans to ensure that even if this assistance did not come on time, the country had enough to meet its requirements and to move forward in an orderly manner.

As short-term measures, the government is trying to correct imbalances in macroeconomic indicators and is also working on eight or nine initiatives to move the country forward. These include safety net, income support fund, skilled-based training, health insurance and employment.

“We will focus on agriculture to eliminate food shortage and create employment opportunities,” said Mr Tareen.

The third area of concentration would be making trade and manufacturing more competitive, balancing exchange rate, through RTC, introducing bankruptcy laws and making the industry more competitive. The government is also working on human resources development.

Encouraging public-private partnership, integrated energy policy. For dealing with power and gas shortages, mineral resources, not explored or utilized yet such as coal, copper, will be developed. Capital market reforms and administrative reforms will also be undertaken.

- Dawn

brightside.

October 14th, 2008, 09:54 AM

What? A profit? Oil companies make insane amounts of money.

Pakistani oil companies should not be making such huge profits when our whole economy is $%@#% cause of oil.

siamu maharaj

October 14th, 2008, 10:39 AM

Pakistani oil companies should not be making such huge profits when our whole economy is $%@#% cause of oil.
So? That's true of everywhere, nothing exclusive to Pakistan.

brightside.

October 16th, 2008, 05:29 AM

Tareen's high hopes (http://www.brecorder.com/index.php?id=821406&currPageNo=1&query=&search=&term=&supDate=)

EDITORIAL (October 16 2008): The Advisor to Prime Minister on Finance, Shaukat Tareen seems to be quite confident in addressing the urgent issues of the economy. In a news conference in Washington after attending the annual meetings of the World Bank and the IMF, he ruled out the possibility of the country defaulting on its international payment commitments and voiced his optimism to bridge the financing gap of three to four billion dollars during the year through a range of measures, including additional resources from international financial institutions.

While Pakistan was expecting 2 to 2.5 billion dollars additional support from the IFIs, including World Bank, Asian Development Bank and Islamic Development Bank, to overcome the financing gap, the country could get additional 1.5 to 2.0 billion dollars more in foreign remittances if they are channelled through government sovereign banks. The government would also welcome assistance from Friends of Pakistan meeting next month in Abu Dhabi.

The country has, therefore, enough resources for an orderly move forward and the Sukuk (bonds) maturity in January will be met in a very timely manner. "We are making multiple arrangements and also have back-up plans," Tareen reassured the audience. When asked about the western media reports that Pakistan was on the brink of bankruptcy, he rejected such speculations categorically, saying "over my dead body".

The Advisor on Finance looked equally firm about implementing certain policies which were in the larger economic interest of the country. He pledged to bring all sectors, including agriculture and real estate, under the tax net to strengthen the economy and declared that "there will be no sacred cows". Tax to GDP ratio will be enhanced from the present 10.5 percent, expenditures will be cut and fiscal deficit would be drastically reduced from last year's ratio of 7.4 percent.

The government is also trying to correct imbalances in macroeconomic indicators and working on eight or nine initiatives to move the country forward including safety net for the poor, skilled-based training, health insurance, promotion of agriculture to eliminate food shortages, integrated energy policy and enhancing competitiveness of trading and manufacturing sectors.

We feel that Shaukat Tareen has advocated Pakistan's case before the international community in an impressive manner during his visit to Washington. From the reports filtering from different sources, it seems that he has been quite successful in assuring the chiefs of the IFIs and other donors that Pakistan is fully prepared to follow sound macroeconomic policies and hence need exceptional assistance in an abnormal period to tide over the situation. The extraordinary confidence exuded by him since assuming office at a difficult time, in our view, has helped the matters.

Obviously, if he had not played his role to perfection, other stakeholders would have become jittery by now which would have made the task of stabilisation of the economy much harder. However, it needs to be pointed out that the ground prepared by him needs to be fertilised properly and his promises in Washington need to be met meticulously. Economic managers of the government have to further negotiate with the IFIs and other donors to devise acceptable policy parameters for stabilising the economy in order to obtain their assistance and seal of approval for the satisfaction of private investors.

Pakistan may have also to demonstrate that it would achieve a sustainable position in the external sector in the near future. On the domestic front, it would be extremely hard to sell the idea of taxing agriculture sector and treat the sacred cows like ordinary cows. Lobbies of agriculture and sacred cows are so strong that Tareen would need full political backing to pursue a just cause.

Only time would tell if the present Advisor on Finance would succeed where his predecessors had failed. Needless to say, his high hopes also rest on the assumption that security and law and order situation in Pakistan would improve and normalcy would return to the country in the coming months. There are of course many odds but a certain measure of optimism as shown by Tareen always helps to get out of a very tough situation.

Copyright Business Recorder, 2008

singaporean

October 16th, 2008, 01:13 PM

KARACHI: Investment worth $4-5 billion committed to projects in Sindh was thwarted by worsening law and order situation that prevailed in the country following the assassination of Benazir Bhutto, political uncertainty during and after elections and recent suicide bombing incidents in Islamabad and elsewhere, industry sources revealed this week.
Sources in the Sindh industries department told Dawn that the Qatari government had shown interest in investing in a huge livestock farm on 10,000 acres at Nabiser on National Highway, apart from a cement plant, and a five star hotel in Karachi.
Sufficient progress was made in some of these projects and even land was selected and allocated but investors did not turn up.
The MoU for the livestock farm with a million heads of cattle was signed between the government and the Qatari investor during the previous regime and the investors even gave approval of the land. The idea was to raise milk and meat production at the farm not only to meet the local market requirements but also export surplus to the Gulf countries, which import huge quantities of mutton from India. The cost of the project has been estimated at $500 million.
The land department had processed allotment applications from investors and sent several messages to the party to collect the orders but to no avail.
An MoU was signed for setting a up a cement plant and a site near Port Qasim was also selected for the project which was not only aimed at meeting the local market requirements but also to have buyback arrangements with Qatar where there is a boom in construction industry.
Sources further informed that a Qatari investor was interested in building a five-star hotel and discussed the project with the city nazim Mustafa Kamal who offered prime land near Water Board office on Sharea Faisal.
The project was supported by the Trade Development Authority of Pakistan which faced problems of hotel accommodation during mega expos and world fairs organised from time to time at the Karachi Expo Centre.
The project met the same fate as of its predecessors due to poor law and order situation.
The most ambitious project for which an MoU was signed was for an oil refinery to be set up near Port Qasim by a Kuwait-based US company Midrock Tussonia. It was also shelved for the same reasons, sources said.
The refinery to be built at a cost of $2 billion was designed for producing 30,000 barrels petrol and other products a day.
The US firm assigned its regional manager Zafar Ali to handle the refinery project in Karachi.
Sources said that the Industries Minister, Rauf Siddiqui, used his influence with some of Arab investors and they pledged to come back, but then came the most destructive suicide bomb attack on Islamabad Marriot Hotel, which killed many foreigners, and it laid a final nail in the coffin of foreign investment.

slashcruise

October 16th, 2008, 01:45 PM

Indus

October 17th, 2008, 04:07 PM

So whar should Pakistan do now to change the economic crisis? What CAN Pakistan do?

brightside.

October 17th, 2008, 04:20 PM

siamu maharaj

October 17th, 2008, 07:15 PM

I hope one effect of this crisis is a reduction in corruption in Pakistan, because the leaders today can't afford to steal money cause that will mean people will start starving to death, so they can't steal. Hopefully corruption will be reduced. Might be wishful thinking though.
Don't mind, but I don't like how people blame the government for being corrupt. I know I've been critical of the gov. too, so I shouldn't really be saying this. But every person I know bribes or takes bribes for a start. So people should stop bitching about the gov. being corrupt just as much as its subjects. I'm NOT saying you do it, just that I hate everyone blaming the gov. The gov. is only as bad as the people.

slashcruise

October 17th, 2008, 07:18 PM

Another thing which Pakistan can do is review its tax policy.I mean in financial Times one of the Pakistani economics reported that only 1.5% pakistani people pay income tax.....I have seen a lot people buying property outside Pakistan as well which cost 250-300 thousand dollars but they pay like 10.000 PKR in tax.....You need to crackdown on these people secondly the tax system needs to be improved.....There needs to be dedicated teams to hold these kind of people who train country to death....tax should be really minimum because most of the people will not evade it because of the amount of risk and heavy fines involve in it.But one has to be tight on catching tax evaders.....

singaporean

October 18th, 2008, 06:17 AM

ISLAMABAD: Pakistan ranks at 61st position in Global Hunger Index-2008 with 21.7 points out of 88 countries surveyed.

The Index, released by the International Food Policy Research Institute (IFPRI) in connection with the World Food Day (October 16) for the third year in a row, shows Pakistan’s rate fell to 21.7 from 25.3 in 1990. It also shows Congo with highest hunger rate of 42.7 points and placed last in the ladder.

India is placed at the 66th position with 23.7 points as it is found that not a single Indian state falls in the ‘low hunger’ or `moderate hunger’ categories. While twelve states fall in the ‘alarming’ categories, Madhya Pradesh shows extreme levels of hunger. Punjab, Kerala, Haryana and Assam fall in the serious category.

The Index ranks countries on a 100-point scale with zero being the best score (no hunger) and 100 being the worst. In general, a value greater than 10 indicates a serious problem, a value greater than 20 is alarming while a value exceeding 30 is extremely alarming.

Other countries like Bangladesh scored 25.2 points (70th place), Nepal 20.6 points (57th), Sri Lanka 15 points (39th), Thailand 9.9 points (23rd), China 7.1 points (15th) and Mauritius 5 points with first position. Around 33 countries across the world have alarming or extremely alarming levels of hunger, according to Global Hunger Index-2008. The Index measures global hunger by ranking countries on three indicators, which include child malnutrition, rates of child mortality and the number of people who are calorie deficient. The study notes high levels of hunger even in economically well-off states of the country attributed to acute child malnutrition.

The Global Hunger Index-2008 was calculated for 120 countries in Asia, Sub-Saharan Africa, and Latin America and the Caribbean, but only 88 countries are ranked in the report, after 32 are excluded due to low levels of hunger. Industrialized countries were not included in the rankings, as well as a few nations for which data is not available such as Iraq, Somalia, and Afghanistan.

“The purpose of compiling these statistics was to enable each country to measure its progress relative to others. Also, we want to learn from successes and failures of policy planning in different regions of the world,” said Director General IFPRI. “Hunger is closely tied to poverty and countries with high levels of hunger are overwhelmingly low or low-middle income countries,” the report said.

In South Asia, the major problem is a high prevalence of underweight in children under five, resulting largely from the lower nutritional and educational status of women and health programmes, inadequate water and sanitation services. Most of the countries ranked in the Index are net importers of grains, and are therefore more likely to suffer because of rising food prices. The world has made only slow progress in reducing hunger in past decades, with dramatic differences among countries and regions, IFPRI Director General said and added population and income growth, high energy prices, bio fuels, science and technology, climate change, globalisation, and urbanization are introducing drastic changes to food consumption, production, and markets. While South Asia has made significant strides since 1990, progress in Sub-Saharan Africa has been minimal.

IFPRI estimates that the additional global public investment required to overcome the food crisis, and still meet the first Millennium Development Goal of halving poverty and hunger by 2015, is at least US$14 billion per annum. Around 45 % of global population falls in the alarming categories as highlighted by the Index. Poverty alleviation is not adequate enough to feed the millions of hungry mouths. What is needed is an inclusive growth and an improved economic access to food and to insulate the poor from market fluctuations.

For Sub-Saharan Africa, the annual additional investment is estimated to be about US$ 5 billion, if African governments fulfill their commitment to invest 10 percent of their national budgets to agriculture. IFPRI calls for a fair, global and regional trade regime and expanding humanitarian assistance to food-insecure people to substantially improve food security in the 21st century.

brightside.

October 18th, 2008, 07:50 AM

Don't mind, but I don't like how people blame the government for being corrupt. I know I've been critical of the gov. too, so I shouldn't really be saying this. But every person I know bribes or takes bribes for a start. So people should stop bitching about the gov. being corrupt just as much as its subjects. I'm NOT saying you do it, just that I hate everyone blaming the gov. The gov. is only as bad as the people.

I'm not one to blame government. Even though I still have to pay 82 Rs./litre for fuel, despite the fact that oil dipped as low as under $70/barrel this week, I understand why the price of petroleum must be kept high. So unlike other people, I don't cuss out the government about things which have to be done.

As for corruption - a human being is a corrupt, selfish, evil little creature. Deep down we are all selfish. If there is a weakness in a system, and a human being feels he can exploit it and get away with it, he/she will exploit it for personal gain. We have seen this happen with the West's economies. Theirs was a form of corruption through deregulation, our corruption exists because we do not have enough educated people to regulate, nor the culture.

I believe in free markets and small government, but due to the nature of a human being, a government must oversee certain persons in power and public office, and make sure a balance is struck between benefits being reaped by individuals, districts, cities and provinces.

Not allowing Sindh's coal reserves to be used for generating electricity for all of Pakistan is also criminal corruption, and we are static in the energy sector because of it.

siamu maharaj

October 18th, 2008, 11:08 AM

I don't agree at all.

slashcruise

October 19th, 2008, 11:46 AM

Pakistan, Facing Debt Default, May Seek IMF Bailout

Oct. 19 (Bloomberg) -- Pakistan, perceived as the world's riskiest borrower, may seek the help of the International Monetary Fund to avoid default on its debt obligations, said Shaukat Tarin, financial adviser to the prime minister.

The South Asian country may need as much as $6 billion to shore up its foreign-currency reserves after they dwindled more than 74 percent in the past year to about $4.3 billion. Pakistan has $3 billion in debt servicing costs in the coming year. Standard & Poor's, doubting the nation's ability to repay debt, cut the long-term foreign-currency rating on Oct. 6 to seven levels below investment grade, and said it may lower it again.

Pakistan may need as much as $4.5 billion to tide over the crisis and is working on a few plans, including seeking loans from the World Bank, the Asian Development Bank and U.K.'s Department for International Development, Tarin said in an interview today.

``If I don't feel the comfort level with the multilateral agencies and our bilateral friends in three to four weeks, then I'll have to write to the IMF,'' he said via mobile phone. A default is ``out of the question.''

A delegation from Pakistan will meet IMF officials in Dubai tomorrow and Oct. 21 for a ``routine economic review,'' he said. Pakistan has already presented its economic stabilization plan to the IMF, including removal of subsidies, tighter monetary policy and steps toward reducing the fiscal deficit, he said.

``If this plan is acceptable to them, only then we will have the IMF program,'' he said.

Record Low

Pakistan's next interest payment on its dollar-denominated bonds is due in December and the government is scheduled to repay $500 million in February on a 6.75 percent note. Multilateral and bilateral aid may not be timely enough, S&P said on Oct. 6. Surging import costs widened the nation's balance of payments deficit, sending the local currency to a record low last week.

The current economic crisis is the deepest faced by the nuclear-armed nation since 1999, when it came close to defaulting on its debt and reserves plunged to less than $1 billion. Pakistan ended its three-year, $1.5 billion loan program with the IMF in December 2004.

``The balance-of-payments position is grim as some short- term obligations are coming up,'' said Syed Suleman Akhtar, an economist at Foundation Securities Pvt. in Karachi. ``There's been no concrete commitment yet.''

China Rebuff

The global credit-market crisis triggered a capital outflow from emerging markets, with Pakistan's benchmark Karachi Stock Exchange KSE 100 Index losing more than a third of its value this year. The bourse kept trading restrictions in place and sought police protection to thwart a repeat of violence on July 16, when hundreds of protesters stoned the exchange and shouted anti-government slogans.

Pakistan faces the politically unpopular decision to seek an IMF bailout after China rebuffed its neighbor's request for cash, the New York Times reported yesterday. The U.S. and other nations are preoccupied with the financial crisis, and Saudi Arabia, a traditional ally, refused to offer oil concessions, the newspaper said.

China may offer a soft loan of $500 million to the nation, the Financial Times reported, citing a finance ministry official it didn't identify.

Pakistan has sought about $1.5 billion from the World Bank, $1.6 billion from ADB and about 500 million pounds ($864 million) from the U.K.'s DFID, apart from a request for $500 million from the Islamic Development Bank, Tarin said.

Widening Deficits

The South Asian country's balance of payments deficit widened to the quarter to Sept. 30 to $3.95 billion from $2.27 billion a year earlier, while the current-account deficit reached a record $14 billion in the year ended June 30, according to data provided by the government.

Credit-default swaps on Pakistan's $2.7 billion of dollar- denominated bonds outstanding have more than tripled since August to 2,453.7 basis points, according to CMA Datavision.

That means it costs $2.45 million annually to protect $10 million of the country's debt from default for five years. The cost reached a record $3.07 million on Oct. 6.

spyk

October 19th, 2008, 07:50 PM

When will we hear some good news :ohno:

I think not for another 16 to 20 months.

PakNorway

October 20th, 2008, 04:27 AM

FAISALABAD (October 20 2008): Accelerating Economic Transformation Programme (AETP) will help Pakistan achieve and sustain average annual economic growth of about 8 percent from 2010 to 2020, through a process of structural transformation of the country's economy.

In a final project report, R. Subramaniam, Sector Director and Team Leader of Central and West Asia Governance and Finance Division (CWGF) of Asian Development Bank said that the AETP will provide the fiscal and implementation support needed to enable the Government to undertake and leverage reforms. The expected outputs of the AETP are: (i) the removal of existing distortions, thereby initiating structural transformation; (ii) strengthening of financial intermediation to support structural transformation; and (iii) development and implementation of a national structural transformation strategy, he added.

Subramaniam said that the AETP is structured as a cluster of four subprogrames over 2008-2011. Subprogram-1 attends to the urgent task of addressing the fiscal implications of the current food and energy crisis and short-term investment climate problems. It will initiate reforms that will be carried forward in the medium term. Subprograms 2-4 will build on these fiscal consolidation reforms and on analytical work and stakeholder consultation.

These subprograms will support the government to implement policies targeted at economic diversification and structural transformation. By addressing costly and inefficient subsidies in the energy and agriculture sectors, the AETP will provide fiscal space for the government so it can finance overall development efforts. By helping to raise confidence in the banking system through a stronger regulatory environment, the AETP will mobilise financial resources and help to develop strong financial institutions that can channel investments to their most productive uses, he added.

In tandem with a new industrial policy to diversify and deepen the industrial and export base, Subramaniam said that these efforts are expected to initiate an economic transformation that will enable Pakistan to sustain high economic growth.

AETP is premised on three key principles. First, Pakistan needs to address certain economic distortions in the short term, specifically by reducing and eventually abolishing inefficient subsidies and targeting them to benefit the poor and vulnerable. Second, Pakistan needs to deepen financial intermediation and increase financial sector stability and soundness. Third, Pakistan needs to diversify its economy and increase the share of industry from the current level of 26 percent of GDP and to increase the share of manufacturing with high value-added. In parallel, it needs to increase agriculture productivity and make its services sector produce greater value.

It is estimated that Pakistan will need more than $1.6 billion to transition from the inefficient subsidy schemes to a targeted cash transfer and food safety net programme in the first year of AETP, and about $3 billion to resolve the accumulated debt in the electricity sector. The AETP will help Pakistan to address the ongoing food and energy crisis in a systematic manner. Subprogram-1 is also one ADB's first responses to its developing countries' needs in the food crisis, first announced by the President at the Asian Development Bank (ADB) Annual Meeting in May 2008 and contained in the Board information paper ADB's Response to the Food Crisis, Subramaniam explained.

He pointed out that the Structural Transformation of an economy of the size and nature of Pakistan's cannot take place quickly or through rigidly prescribed conditions. To achieve the principles, the AETP sets out a 4-5 year design and implementation period, and a cluster structure of four subprograms that will provide flexibility to meet evolving circumstances. It sets out short-and medium-term actions, with changes to come beyond the programme period. The AETP will only tackle the policy issues, with a large number of procedural and process-related changes taking place in parallel to the proposed reform measures.

Subramaniam said that AETP envisages immediate reforms to remove pricing, procurement, or other finance-related distortions (eg, debt) in certain key sub-sectors such as wheat and electricity. Reforms are also needed in the financial sector to boost public and investor confidence. In parallel, Pakistan needs to initiate the process of structural transformation of its economy.

http://www.brecorder.com/index.php?id=823250&currPageNo=1&query=&search=&term=&supDate=

Intoxication

October 20th, 2008, 09:48 AM

Investment is also hit in tourism sector as people donot feel it is the right time to visit Pakistan because of lack of security and current events.....the worst of all which I was been told from a lot of muslim friends was that if you are a muslim and you even visit pakistan for any reason then it is definate that you will have difficulty in not only getting visas from several western countries but your passport will be checked thoroughly in immigration counters as well.......

Meh, you can't harm something which is already dead! Tourism is an already dead sector in Pakistan.

ISLAMABAD: Pakistan ranks at 61st position in Global Hunger Index-2008 with 21.7 points out of 88 countries surveyed.

The Index, released by the International Food Policy Research Institute (IFPRI) in connection with the World Food Day (October 16) for the third year in a row, shows Pakistan’s rate fell to 21.7 from 25.3 in 1990. It also shows Congo with highest hunger rate of 42.7 points and placed last in the ladder.

India is placed at the 66th position with 23.7 points as it is found that not a single Indian state falls in the ‘low hunger’ or `moderate hunger’ categories. While twelve states fall in the ‘alarming’ categories, Madhya Pradesh shows extreme levels of hunger. Punjab, Kerala, Haryana and Assam fall in the serious category.

The Index ranks countries on a 100-point scale with zero being the best score (no hunger) and 100 being the worst. In general, a value greater than 10 indicates a serious problem, a value greater than 20 is alarming while a value exceeding 30 is extremely alarming.

Other countries like Bangladesh scored 25.2 points (70th place), Nepal 20.6 points (57th), Sri Lanka 15 points (39th), Thailand 9.9 points (23rd), China 7.1 points (15th) and Mauritius 5 points with first position. Around 33 countries across the world have alarming or extremely alarming levels of hunger, according to Global Hunger Index-2008. The Index measures global hunger by ranking countries on three indicators, which include child malnutrition, rates of child mortality and the number of people who are calorie deficient. The study notes high levels of hunger even in economically well-off states of the country attributed to acute child malnutrition.

The Global Hunger Index-2008 was calculated for 120 countries in Asia, Sub-Saharan Africa, and Latin America and the Caribbean, but only 88 countries are ranked in the report, after 32 are excluded due to low levels of hunger. Industrialized countries were not included in the rankings, as well as a few nations for which data is not available such as Iraq, Somalia, and Afghanistan.

“The purpose of compiling these statistics was to enable each country to measure its progress relative to others. Also, we want to learn from successes and failures of policy planning in different regions of the world,” said Director General IFPRI. “Hunger is closely tied to poverty and countries with high levels of hunger are overwhelmingly low or low-middle income countries,” the report said.

In South Asia, the major problem is a high prevalence of underweight in children under five, resulting largely from the lower nutritional and educational status of women and health programmes, inadequate water and sanitation services. Most of the countries ranked in the Index are net importers of grains, and are therefore more likely to suffer because of rising food prices. The world has made only slow progress in reducing hunger in past decades, with dramatic differences among countries and regions, IFPRI Director General said and added population and income growth, high energy prices, bio fuels, science and technology, climate change, globalisation, and urbanization are introducing drastic changes to food consumption, production, and markets. While South Asia has made significant strides since 1990, progress in Sub-Saharan Africa has been minimal.

IFPRI estimates that the additional global public investment required to overcome the food crisis, and still meet the first Millennium Development Goal of halving poverty and hunger by 2015, is at least US$14 billion per annum. Around 45 % of global population falls in the alarming categories as highlighted by the Index. Poverty alleviation is not adequate enough to feed the millions of hungry mouths. What is needed is an inclusive growth and an improved economic access to food and to insulate the poor from market fluctuations.

For Sub-Saharan Africa, the annual additional investment is estimated to be about US$ 5 billion, if African governments fulfill their commitment to invest 10 percent of their national budgets to agriculture. IFPRI calls for a fair, global and regional trade regime and expanding humanitarian assistance to food-insecure people to substantially improve food security in the 21st century.

GOOD. So we've improved. Btw this should be in the Social Issues thread.

Pathanboy

October 21st, 2008, 04:13 AM

brightside.

October 21st, 2008, 05:30 AM

Italy to help Pakistan acquire GSP status with EU (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/opinion/national/italy+to+help+pakistan+acquire+gsp+status+with+eu)
By Baqir Sajjad Syed

Tuesday, 21 Oct, 2008 | 08:30 AM PST |

ISLAMABAD, Oct 20: Italy has agreed to help Pakistan acquire GSP+ status with the European Union for 2009-2011.

An agreement reached between Foreign Minister Shah Mehmood Qureshi and his Italian counterpart Franco Frattini on Monday would grant greater market access to Pakistani products in EU member countries.

Mr Frattini said Italy would use its influence for initiating Pakistan-EU Free Trade Agreement (FTA).

“Pakistan can count on Italy’s support in the EU at any time,” he said during the bilateral talks.

Addressing a press conference with the Italian foreign minister, Mr Qureshi said that during the talks he underlined the need for equitable market access to Pakistan in the EU through FTA and generalised system of preferences or GSP+ arrangement, which has a direct bearing on the country’s fight against poverty and extremism.

“I also reiterated the value we attach to Italy’s support in context of the EU,” he said.

Pakistan’s exports suffered massively because it could not qualify for the GSP+ for 2006-2008. Pakistan is the only South Asian country that does not have any preferential trade arrangement with the EU.

Mr Frattini told newsmen that Italy supported Pakistan’s efforts to combat terrorism, but without negotiating with militants.

“We do want Pakistan combating terrorism and fighting terrorists, not negotiating with them.”

He said that Italy’s political strategy was not to legitimise terrorists but eradicate terrorism from the society.

Italy, which is likely to take up G-8 presidency from January 2009, would work for greater collaboration bet- ween Pakistan and G-8 countries for the development of restive tribal areas bordering Afghanistan and establishing peace there.

“During its presidency Italy would organise a meeting of G-8 countries and neighbours of Pakistan and Australia to analyse situation in the border region with Afghanistan and help Islamabad deal with the situation,” Mr Frattini said during the talks.

One of the major objectives of Mr Frattini’s visit was to understand Pakistan’s perspective on regional security, especially Afghanistan and counter-terrorism.

Mr Frattini is the first G-8 foreign minister who has visited Pakistan after Mr Asif Ali Zardari took over as president.

brightside.

October 21st, 2008, 05:40 AM

Precarious state of the economy (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/opinion/editorial/precarious+state+of+the+economy)
Tuesday, 21 Oct, 2008 | 09:01 AM PST |

By Shahid Javed Burki

PAKISTAN’S new political masters are now convinced that urgent action is required to secure the funds needed to keep the country afloat.

The country’s own resources will not take it much beyond the early months of 2009. Perhaps by the spring of next year, foreign exchange reserves maintained by the State Bank of Pakistan will have run down to a level that will not be sufficient to cover the trade deficit and also service the country’s foreign obligations.

The rate of depletion may be reduced somewhat by a slowdown in the rate of economic growth and by the consequent decline in the quantum of imports. Some of the measures adopted by the new government may also reduce imports. The sharp correction in the exchange rate may also increase exports and contribute to narrowing the trade gap. If that were to happen the pressure on foreign exchange reserves will be eased somewhat.

The sharp decline in the price of oil will also help the balance of payments. On Oct 16 the price of a barrel of oil fell below $70 for the first time in a year. Given the amount of money Pakistan spends on importing oil, this too will reduce the import bill and help with the balance of payments situation.

However, some other elements in the country’s external account may move in the opposite direction and contribute to a further deterioration in the situation. I am thinking in particular about private capital flows to Pakistan from the United States and Britain. An important component of this is normally called ‘workers’ remittances’. This is a misnomer since a large proportion of these amounts are sent by the relatively affluent members of the Pakistani diaspora who, after years of work outside the country, have accumulated significant savings. These are available for investments.

Most diasporas behave in the same way. They normally start with charitable contributions to the people they have left behind in the homeland. Once their situation improves, they begin making investments for the long term. Some of this goes to the homeland. This is where the Pakistani diaspora is in the United States and Britain.

For the last several years, the Pakistani diaspora has used its savings for investment in the Karachi stock market, or to buy real estate or to set up small enterprises all over the country. This source of money may dry up if the economic situation in Pakistan continues to deteriorate. It will also dry up if the current economic difficulties in Britain and the United States negatively affect the Pakistani diaspora. In other words, Pakistan’s policymakers should be cautious about banking on this resource for paying the country’s bills. My guess is that if the US goes into a deep recession, which seems increasingly likely, remittances by US-based Pakistanis may decline by one half to only $1bn.

There is growing apprehension in the financial community about Pakistan’s economic future. I was contacted recently by a major investment fund based in the United States that took a large position in the Pakistani government bond due for repayment in early 2009. The question was whether Pakistan would honour its obligation when the term for the bond is over. I assured the fund that it was unlikely that Pakistan would reach the situation at which it may have to default. A way will be found to continue to meet external obligations.

From Pakistan’s perspective its economic crisis couldn’t have come at a more awkward time. Pakistan’s need for the infusion of foreign capital continues to increase while the world is in economic turmoil. Developed countries are totally absorbed in dealing with the meltdown in their own financial sectors. In spite of the enormous amount of commitment of public funds for the rescue of various parts of the financial system, the crisis is not letting up. The US capital markets are in free fall and the amount of money the government is providing for stabilising them is building up government debt. The budget is under enormous pressure and the fiscal deficit is increasing.

Given these developments would Washington have the resources to rescue Pakistan from its precarious situation? Or would any other developed nation with interest in preserving Pakistan’s economic integrity come to the country’s rescue when it too is dealing with a severe economic crisis of its own?

If the western nations are too preoccupied with their own problems and may not have either the time or the resources to focus on Pakistan’s worsening plight, could the country turn to some of the cash-rich states such as the Middle Eastern oil exporters or China? President Asif Ali Zardari paid a state visit to China in the middle of October. Receiving help from China must have been high on his agenda. He must have asked for cash — a deposit of a large amount of money into Pakistan’s account at the Federal Reserve Bank in New York.

This is the kind of help I received from Beijing in December 1996 when Pakistan’s economic situation was even more precarious than it is at present. Foreign exchange reserves had run down to only $342m. Default on repayments to the World Bank and the IMF would have been the only option left for the country had the Chinese not heeded our plea.

The Chinese help arrived within a day of my visit to Beijing. But in the conversation I had with Zhu Rongji, then prime minister

of China, it was impressed upon me that the country had to learn to stand on its feet. This implied a serious effort to increase the domestic savings rate including savings by the government. Prime Minister Zhu knew of my work on China, a country I had looked after for the World Bank for seven years. He reminded me that since China saved 40 per cent of its gross domestic product, it was able to ride over many storms.

His assessment that a low savings rate was the Achilles heel of the Pakistani economy was totally correct. In the 12-year period since that help was received from the Chinese, Pakistan’s savings rate has declined and the government’s deficit has increased. The country went in the direction exactly opposite to the one advocated by China. Beijing had demonstrated by its own economic management that savings was the right course to adopt.

I am not confident that China will provide a great deal of help. The only way out is to go to a dozen potential donors with a well-developed programme for reform.

brightside.

October 21st, 2008, 05:42 AM

Decline of the rupee (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/opinion/letters-to-the-editor/decline+of+the+rupee)
The Rupee is on a free fall, and at this rate could cross Rs100 to the dollar before this year-end and still continue to decline to any amount, perhaps Rs1,000 to the dollar and still decline. The government appears to have done little except a few million dollars injected by the State Bank in the monetary market, which has hardly had any effect.

According to my layman knowledge on finance, perhaps our finance wizards may consider re-imposing foreign currency restrictions as were in place prior to 1991, which is still in vogue in most of the third world countries, and all our neighbours.

In India, despite their colossal forex reserves of almost $300 billion are governed by exchange controls, provided by the Foreign Exchange Management Act, 1999. Although modified by notifications in the intervening years, controls like differentiating between resident and non-resident citizens are or not entitled to hold forex accounts and engage in transfer.

In China, despite holding the highest forex reserves in the world of $1.9 trillion, they have restrictions and controls, even though it may be in the reverse, to avoid over heating of their economy.

Oil-rich Iran, after recovering from their war with Iraq, has never rescinded its policy of controls/restrictions on foreign currency movement within its country.

Are our laws on forex only to provide complete freedom in conversion/movement, which was enacted by the Sharif government in 1991, meant to facilitate the rich, corrupt or otherwise, to transfer their money abroad, legally and without any hassle, at short notice when they considered the State was sinking?

At present there are a lot of rats jumping the ship.

RAFI AHMED

Karachi

(II)

The Pakistani rupee has dipped to an alarmingly low record of Rs85 to a dollar as on Oct 16. The country’s foreign exchange reserves stood at $16.8billion on Feb 18, the day of the general election which have now fallen to $7.75billion in the week that ended on Oct 11. These dwindling reserves are sufficient to cover less than two months of imports. According to analysts, the country urgently needs $3 to 4 billion to bail out of this alarming situation.

The Asian Development Bank announced loans of $500 million this month but those were wiped out by import payments. Now, we’re eyeing on a World Bank loan of $1.4 billion subject to its board’s approval.

Our political leadership is knocking on each and every door to get the financial help. The Saudis have been sluggish in giving a nod on the deferment of payment for the oil import facility. Perhaps they are vary of our frequent requests.

Our President has returned from China. While we get the required amount,the question is how long will it last? Until and unless our leaders sit down and devise a strategy to bail us out of this risky situation, we will continue to beg.

And, by the way, what are all of our much-trumpeted “financial wizards” working on at this time of need? Could somebody tell us?

AIR CDRE (retd) AZFAR A. KHAN

Rawalpindi

siamu maharaj

October 21st, 2008, 06:28 AM

Italy to help Pakistan acquire GSP status with EU (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/opinion/national/italy+to+help+pakistan+acquire+gsp+status+with+eu)
It might have helped had the writer told what GSP is. Also, what's with Italy suddenly being so nice to Paksitan??? She also said that it supports Pakistan in some other context. What's up with that?

siamu maharaj

October 21st, 2008, 06:47 AM

I wouldn't say the people were bad as such, more uneducated. I can't really see how the current democratic setup can be a fair one, given that half the people cannot read a newspaper, let alone understand the monetary system in Pakistan. It's ripe for exploitation. It would have been better to have given it limited democracy, but well it's over now, and Mr 10% is in charge.

Looking at how things went between 1999 and 2007, there was a minor economic boom in Pakistan, so why would one want to blame the government for this? This year though has been a mess, so why not blame the government? I don't see your point, actually.
The economic boom was merely import and consume + investments in the non-industrial sector. That does not an economy make in the long run, we are seeing the effects now. The utter incompetence to make anything locally is a big part of the reason we are where we are. And because our businessmen cannot thing BIG. But of course, all this is the gov.'s fault. As for Mr. 10%, can you honestly tell me you've never done anything wrong to gain an advantage? Why point fingers at one guy? Let the blame game begin, we are poor and the government is oppressive and looters. Great. Let's for a second assume that the goverment fires every 'parchi' and actually hires competent people. You'll have these 'parchis' burn the whole country down. And I'm talking literally. Apparently that 1 guy is more responsible for everything that's wrong than 140 million people. Ha!

brightside.

October 21st, 2008, 07:02 AM

It might have helped had the writer told what GSP is. Also, what's with Italy suddenly being so nice to Paksitan??? She also said that it supports Pakistan in some other context. What's up with that?

It's "a generalized system of preferences" for imports going into Italy.

The economic boom was merely import and consume + investments in the non-industrial sector. That does not an economy make in the long run, we are seeing the effects now. The utter incompetence to make anything locally is a big part of the reason we are where we are. And because our businessmen cannot thing BIG. But of course, all this is the gov.'s fault. As for Mr. 10%, can you honestly tell me you've never done anything wrong to gain an advantage? Why point fingers at one guy? Let the blame game begin, we are poor and the government is oppressive and looters. Great. Let's for a second assume that the goverment fires every 'parchi' and actually hires competent people. You'll have these 'parchis' burn the whole country down. And I'm talking literally. Apparently that 1 guy is more responsible for everything that's wrong than 140 million people. Ha!

I agree with this post.

Intoxication

October 21st, 2008, 07:58 AM

It might have helped had the writer told what GSP is. Also, what's with Italy suddenly being so nice to Paksitan??? She also said that it supports Pakistan in some other context. What's up with that?

GSP is a scheme, which was in the news a lot in Pakistan. As Pakistan felt being discriminated against, by Europe, for not being allowed to be a part of this scheme. This scheme allows nations who are a part of it, to face lower tariffs or no tariffs at all, whilst exporting to the EU.

Not being a part of the GSP scheme hurt Pakistan's share of the European textile market a lot. I read about how Pakistan was losing its market share to nations like Vietnam & Bangladesh, who were allowed to be a part of this scheme and to big & efficient exporters like China.

Pathanboy

October 21st, 2008, 09:43 AM

The economic boom was merely import and consume + investments in the non-industrial sector. That does not an economy make in the long run, we are seeing the effects now.

Did you dream this up all by yourself, or did you hear it off somebody, and suddenly became an economic expert?!

Let's see. I got time to waste, so I'm going to rip this silly argument to shreds.

You say Pakistan imported non-industrial materials/products, then consumed the products and this somehow gave the "illusion" of an economic boom when combined with investments, presumably foreign, into the same sectors. Have you ever heard of any country profiting from importing materials and then consuming them? Basic economics will tell you that money is not generated from importing consumer goods, this is part of the balance of payments which does not make one iota of difference to the GDP if things are imported and consumed. That is your first theory of import and consume out the window. You're second theory is that foreign investment contributed to the economic boom. This is true partly (note this word as investment is not the main staple of GDP), but the foreign investment can only have come as the country's economic outlook grows rosier. The rise of Pakistan's S & P rating was a good reflection of this and FOREX grew. There were huge strides made in both the IT, services and industrial sectors from 1999-2007, which contributed to the rise of GDP through internally generated revenue. This is an example:

Agricultural sector - Grew 200% betweenm 1999 - 2007
Industry sector - Grew about 320% between 1999 -2007
Services sector - Grew just under 300% between 1999 - 2007

http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf

I hope you can accept that your theory this can be all due to investment is proven gibberish, as the figures clearly show industry and services to be the main cause for the elevation in Pakistan's GDP between 1999 - 2007.

The utter incompetence to make anything locally is a big part of the reason we are where we are. And because our businessmen cannot thing BIG.

When you have an unstable government, and a proven crook as the head of government, investors do not give you their money. Are you trying to tell me you'd give money to a felon that's been convicted of embezzlement? If so, then I'd doubt you run a very successful business. Businessmen cannot do business unless the environment allows them to. They need stability, they need to regain their former credit trustworthiness, and this does not happen when you've elected someone who's failed to deliver in the past.

But of course, all this is the gov.'s fault. As for Mr. 10%, can you honestly tell me you've never done anything wrong to gain an advantage?

I think you're letting the weed get to you now. Sure, i do things to gain an advantage, like overtake cars on the inside lane when I'm in a hurry. Now you're going to tell me that that equates to stealing billions on dollars from a crumbling economy while people are starving, and buying plush mansions like Rockwood Estate!! If you cannot see how whacked that comparison is, then I have several bridges with your name written all over them!

Why point fingers at one guy? Let the blame game begin, we are poor and the government is oppressive and looters. Great. Let's for a second assume that the goverment fires every 'parchi' and actually hires competent people. You'll have these 'parchis' burn the whole country down. And I'm talking literally. Apparently that 1 guy is more responsible for everything that's wrong than 140 million people. Ha!

The people are to blame for electing him, no doubts. But it's not their fault entirely, since when you give the vote to illiterate people, they naturally screw it up. You don't ask babies whether you should invest $1000 in a business venture, do you?

siamu maharaj

October 21st, 2008, 10:03 AM

Did you dream this up all by yourself, or did you hear it off somebody, and suddenly became an economic expert?!

Let's see. I got time to waste, so I'm going to rip this silly argument to shreds.

You say Pakistan imported non-industrial materials/products, then consumed the products and this somehow gave the "illusion" of an economic boom when combined with investments, presumably foreign, into the same sectors. Have you ever heard of any country profiting from importing materials and then consuming them? Basic economics will tell you that money is not generated from importing consumer goods, this is part of the balance of payments which does not make one iota of difference to the GDP if things are imported and consumed. That is your first theory of import and consume out the window. You're second theory is that foreign investment contributed to the economic boom. This is true partly (note this word as investment is not the main staple of GDP), but the foreign investment can only have come as the country's economic outlook grows rosier. The rise of Pakistan's S & P rating was a good reflection of this and FOREX grew. There were huge strides made in both the IT, services and industrial sectors from 1999-2007, which contributed to the rise of GDP through internally generated revenue. This is an example:

Agricultural sector - Grew 200% betweenm 1999 - 2007
Industry sector - Grew about 320% between 1999 -2007
Services sector - Grew just under 300% between 1999 - 2007

http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf

I hope you can accept that your theory this can be all due to investment is proven gibberish, as the figures clearly show industry and services to be the main cause for the elevation in Pakistan's GDP between 1999 - 2007.

When you have an unstable government, and a proven crook as the head of government, investors do not give you their money. Are you trying to tell me you'd give money to a felon that's been convicted of embezzlement? If so, then I'd doubt you run a very successful business. Businessmen cannot do business unless the environment allows them to. They need stability, they need to regain their former credit trustworthiness, and this does not happen when you've elected someone who's failed to deliver in the past.

I think you're letting the weed get to you now. Sure, i do things to gain an advantage, like overtake cars on the inside lane when I'm in a hurry. Now you're going to tell me that that equates to stealing billions on dollars from a crumbling economy while people are starving, and buying plush mansions like Rockwood Estate!! If you cannot see how whacked that comparison is, then I have several bridges with your name written all over them!

The people are to blame for electing him, no doubts. But it's not their fault entirely, since when you give the vote to illiterate people, they naturally screw it up. You don't ask babies whether you should invest $1000 in a business venture, do you?
You're simply re-inforcing what I said. Thank you.

October 23rd, 2008, 07:43 AM

IMF package on our terms: Tareen

WASHINGTON: IMF Director Dometi Strauss Kan has announced that Pakistan has formally requested monetary support and the negotiations regarding a loan would start within a few days.

A British news agency revealed that Director IMF Strauss Kan said in his statement that an IMF delegation would meet Pakistani officials and the amount of money to be lent and conditions would be decided later.

Sources revealed that Pakistan was expecting 10 to 15 billion dollars as instant support.

According to a private TV Channel, Shaukat Tareen said that the final decision would be taken later. He, however, clarified that there was no there was no question of declaring an economic emergency.

Tareen said that Pakistan would contact IMF not on their conditions but in complete accordance with its own plan.

He said, "We are not satisfied with the current economic conditions in Pakistan, however, the circumstances are expected to improve."

Meanwhile, Adviser to the Prime Minister on economy Hina Rabbani Khar has said the government has made no formal request to the International Monitory Fund (IMF) for financial help to cope with the balance of payment pressure.

Talking to a TV channel she said that the IMF was being considered a possible option to obviate the possible impacts of international financial crisis.

She said Pakistan paid an extra $5 billion on oil imports due to a surge in its prices. "Power scarcity has ruined the country's economy.

Pakistan was compelled to import major food commodities this year. A Rs 27 billion subsidy on fertilizer has increased the balance of payment pressure," she said, adding the country was tightening its belt and PM's secretariat's expenditure has been reduced significantly.

- The Post

:hilarious

siamu maharaj

October 23rd, 2008, 09:42 AM

Hamari billi, humain hi mainaoon?

slashcruise

October 23rd, 2008, 01:33 PM

Why dont they build more power plants instead of buying oil for people to fuel their generators......Power plant would create jobs as well and will produce power at cheaper rates and will also help in reducing the imports and will ultimately build foreign exchange??????????

brightside.

October 23rd, 2008, 05:01 PM

You say Pakistan imported non-industrial materials/products, then consumed the products and this somehow gave the "illusion" of an economic boom when combined with investments, presumably foreign, into the same sectors. Have you ever heard of any country profiting from importing materials and then consuming them? Basic economics will tell you that money is not generated from importing consumer goods, this is part of the balance of payments which does not make one iota of difference to the GDP if things are imported and consumed. That is your first theory of import and consume out the window. You're second theory is that foreign investment contributed to the economic boom. This is true partly (note this word as investment is not the main staple of GDP), but the foreign investment can only have come as the country's economic outlook grows rosier. The rise of Pakistan's S & P rating was a good reflection of this and FOREX grew. There were huge strides made in both the IT, services and industrial sectors from 1999-2007, which contributed to the rise of GDP through internally generated revenue. This is an example:

Agricultural sector - Grew 200% betweenm 1999 - 2007
Industry sector - Grew about 320% between 1999 -2007
Services sector - Grew just under 300% between 1999 - 2007

http://www.statpak.gov.pk/depts/fbs/statistics/national_accounts/table4.pdf

FDI poured into Pakistan but it was mainly in the telecom sector and banking sector. If you compare industrial growth with growth in the insurance/financial sector, you will find that the difference was huge in favor of the latter. Actually, Pakistan attracted FDI because it's image improved in Western countries for being an ally of the USA and after recieving so much praise from the White House, and also because there was relative political stability for a few years in a row. The consumption fuelled growth did create an illusion because we were not consuming items made in Pakistan, we were importing them and suddenly we had expensive cars, expensive mobile phones, expensive flat screen TVs, expensive entertainment equipment seen in Pakistan. Where did the machines for Karachi's bowling alley's come from? Where did the Nokias and the Samsungs come from? Where did the Accords and Camry's come from? Where did PS2's and split air conditioners come from? Definitely not from Pakistan. All these things suddenly started showing up everywhere at the turn of the century and that gave us the impression that our country was getting richer, when infact the opposite was happening. The agriculture sector did not infact grow as much as it should have, and it's share in the overall GDP was reduced (IMO that is great, I hate agriculture), and considering the fact that 40% of our labor force is employed in this sector, most people of Pakistan saw little benefit of the economic "boom" of 2001-07. Many good things happened during that timeframe, but the government was unable to stem consumption in time to save Pakistan's economy, perhaps because the man in charge was preoccupied with other matters near the end of his term.

spyk

October 24th, 2008, 12:47 AM

^^ I completely disagree.

You are right in saying that there was a massive surge in imports to feed domestic consumption. But, consumption wasnt just of foreign imports. Most of the consumption was still of domestic goods and services. You can certify this yourself by checking the stats and the numbers on things like locally manufactured cars or motorbikes or tractors or washing machines or blankets or anything else.

So to say that the consumption growth was made up of just imports is highly inaccurate.

The problems only started last year when billions were spent on oil subsidies. But, this can be forgiven because it was an election year and govts. all around the world do and have done this kind of stuff for political reasons during election times. Also, the govt. claimed that they estimated that the price of oil will come down and was unnaturally high; they were right, only it took ages for the price to come down, and, meanwhile, the damage had been done.

Then there was the political and law and order situation. I mean come on. We had an emergency, an election, arrival of nawaz sharif and BB, BB's assassination, lawyers protests, political turmoil, change of govt, insurgencies in FATA, resignation of army chief and president, hundreds of suicide bombings. The economy seemed resilient until the earlier parts of this year, but, eventually, it caved in.

Nonetheless, the economy is on a foundation which is a million times better than the one it was on in the 1990s. And, with the injection of around $10 billion, we should be back on track for sound growth and development by the beginning of 2010.

Intoxication

October 24th, 2008, 07:51 AM

Now there are runs on countries

Robert Peston23 Oct 08, 10:11 AM

http://www.bbc.co.uk/blogs/thereporters/robertpeston/halifax_lloydspa203.jpg

The sickness afflicting the global financial economy has entered a new and worrying phase.

It started last summer with the closing down of big chunks of the wholesale money and securities markets.

Then we saw a succession of crises at individual banks, as institutional providers of funds withdrew their cash from banks they perceived as weak (culminating here in the nationalisations of Northern Rock and Bradford & Bingley, and the rescue takeover of HBOS).

In September the entire banking system was on the brink of total meltdown, because of semi-rational fears that almost no bank was safe from collapse.
And now we're seeing a massive flight of capital out of economies perceived to have been living beyond their means - either because they have a substantial reliance on foreign borrowings, or because they are net importers of good and services, or both.

Commercial lenders to these economies - banks, hedge funds, mutual funds and so on - want their money back now. That's driving down their currencies, pushing up the cost of borrowing for their respective governments and undermining the strength of their respective banking systems.

So they need financial help to tide them over - and with the global economy slowing down, those economies perceived as lacking the resources to cope on their own may need support for months and years.

Queuing up for the intensive care ward are Iceland, Hungary, Pakistan, Ukraine and Belarus, all of which are in discussions about accessing special loans from the International Monetary Fund, the emergency medical service for the global economy.

But there has also been a substantial withdrawal of capital from South Africa, Argentina and - most worrying of all - South Korea.

Let's put this into some kind of context.

The annual economic output of Pakistan, Hungary and Ukraine is something over $100bn each - which is not trivial but does not put them near the top of the rankings in terms of the size of their GDP.

However, the output of Argentina is well over $200bn and that of South Korea is around $900bn. In fact, South Korea is the 13th biggest economy in the world.

If you add together the GDPs of all the economies currently diagnosed with toxic BO by international investors you arrive at a sum that's not far off the economic output of the UK.

And the sums of debt involved are also fairly substantial. Hungary has external debt of more than $100bn, Ukraine has foreign borrowings of $50bn, while Pakistan's dependence on overseas funding is nudging $40bn.

As for South Korea, which hasn't requested formal help from the IMF, its foreign debt is nearer $200bn.

Now you may think this is all about remote countries, with no relevance to you. Well, that would be wrong. We're all connected.

It's been very fashionable for pension funds to invest in developing economies in recent years. If you're saving for a pension, you may own a chunk of South Korea or Argentina.

If you're very unlucky, your pension fund may have belatedly put some of your cash into one of the many hedge funds being royally mullered by the way they borrowed vast sums to invest in some of these emerging economies.

And of course the woes of these economies reduce their ability to purchase from abroad, which acts as a further serious drag on global economic growth.
Also the UK is being buffeted directly by international investors' re-awakened distaste for economies perceived to be too dependent on foreign capital or credit from institutions and companies.

What's happening to South Korea - where its currency, the won, has fallen 29% in the past three months, and shares have fallen well over 20% in a week - is particularly worrying for us.

South Korea is a great manufacturing and exporting nation. Its balance of trade is vastly healthier than the UK's.

But like the UK, South Korea's banks are dependent on wholesale funds that are being withdrawn because of fears that those banks face losses on imprudent deals (not lending to homeowners, as is the case in the UK, but currency hedges with local companies - see my note "Crisis is business as normal").

Of course, our banks - and South Korea's - are being shored up by massive financial support from taxpayers.

But if investors no longer think the UK's banks are at risk of collapse, they then look at our other vulnerabilities - such as public sector borrowing which is rising very sharply because of the costs of the bank rescues, dwindling tax revenues and the need to spend our way through the economic downturn.
They also look at our structural trade deficit and our huge reliance on financial flows generated by a City of London and a financial services industry that's shrinking fast.

As I've pointed out in a tediously repetitive way, the sum of all we've borrowed - the aggregate of corporate, personal and public sector debt - is equivalent to three times our annual economic output.

That's a vast amount of debt to repay - and it's all the harder to do so at a time when our most successful industry, financial services, is in some difficulty and the global economy is slowing down.

If international investors fear our credit isn't what it was and are selling pounds, we should hardly be surprised.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/now_there_are_runs_on_countrie.html

Intoxication

October 24th, 2008, 08:11 AM

Emerging Markets: Foreign Currency Debt Troubles

Foreign-denominated debt is squeezing countries from Romania to South Korea as their local currencies falter

http://images.businessweek.com/story/08/600/1023_mz_emerging.jpg
Shares in Bucharest have plunged 67% so far this year

When Daniel Ion bought his first home last year, his monthly mortgage payment was $704. Now it's $939—and rising. "We wanted so much to have our own house, but now we are really starting to feel the burden," says Ion. Soon, he frets, his salary as a manager at a toy factory may not be sufficient to cover the payments.

Another subprime hard-luck story? Not exactly. Ion lives in Bucharest, and his plight illustrates one reason emerging markets such as Romania are in trouble. Like U.S. subprime borrowers, Ion was lured by a mortgage with easy up-front terms. But a bigger problem is that his loan is in euros while his salary is in lei, the Romanian currency, which is off by 12% against the euro in the past year. Foreign-currency loans are popular in developing countries because they offer lower interest rates than those in local currencies. In Romania, for instance, foreign currency loans run as low as 8%, vs. 10% or more for loans in lei.

All told, borrowers in emerging markets owe some $4.7 trillion in foreign-denominated debt, up 38% over the past two years. Many developing countries still look strong on paper, with big foreign reserves and healthy trade surpluses. But the statistics can mask heavy dependence on offshore loans to keep economies buoyant. "It's amazing that people don't pay attention," says Mark Mobius, head of Templeton Emerging Markets Fund (EMF). Borrowers have been taking out "mortgages in yen and Swiss francs because they thought the money was so cheap."

Governments and international lending agencies are scrambling to rescue the hardest-hit countries. The hundreds of billions of dollars the U.S. and Europe are pumping into frozen credit markets also will help. But for some countries, it's already too late to avoid a painful hangover, says Morgan Stanley's (MS) Ronny Rehn in London. "There will be extreme repercussions," he says.

Who could suffer, and how? Romania, Hungary, and Bulgaria—where more than half of all debt is foreign-denominated—could be pushed into recession, joining the Baltics, where the economies already are contracting. "The only sector that's doing well is collection agencies," says Tomass Barilo, managing director of WorkingDay, a recruitment company in Riga, Latvia. Barilo says he expects WorkingDay's revenues to shrink 25% to 30% this year as consumers and businesses struggle to repay foreign-denominated debts. And Ukraine is bracing for draconian cuts in social spending under terms of a $14 billion emergency loan it is negotiating with the International Monetary Fund. Some 49% of the country's debt is foreign-denominated, and Ukraine's currency is down nearly 9% in the past year.

Lenders are at risk, too—especially in Central and Eastern Europe, which have gotten some $1.5 trillion in credit from foreign banks. The three biggest foreign lenders—Italy's UniCredit, and Austria's Erste Bank and Raiffeisen International—have all had their debt outlooks lowered recently to "negative" by ratings agencies that cite deteriorating economic conditions in the region. And Sweden's SEB and Swedbank (SWDBY) have written down more than $100 million on credit losses in the Baltics this year.

HEALTHY RESERVES

In South Korea, the global credit squeeze has sent the won plunging 33% against the dollar this year, making it virtually impossible for local banks to borrow from overseas lenders. Some banks, in turn, stopped lending to small and midsize companies—prompting Seoul to swoop in on Oct. 19 with $100 billion in guarantees on foreign borrowings. But most analysts expect Korea to weather the storm, in large part because of its healthy $240 billion foreign-exchange reserve.

Other countries are vulnerable not so much because of corporate or consumer borrowing in foreign currencies but because their governments are at risk of default. In Argentina, President Cristina Fernández de Kirchner wants to nationalize $30 billion in private pension funds. Although Kirchner says the move will protect retirees from falling stock prices, critics say the real reason is to strengthen state finances as Argentina prepares to make billions of dollars in foreign debt payments next year. In Pakistan, meanwhile, foreign reserves have dropped to $4.3 billion, enough to cover only 45 days of imports. Pakistan's rupee has plunged 22% this year as exports have slowed.

To preserve foreign currency, Pakistan's government has ordered companies to pony up, in cash, one-third of any import bill before banks can issue letters of credit. That has forced businesses to slash imports. "My company is in a pretty deep crisis right now," says Muhammad Imran Khan, chief executive of Lahore-based steel products company Conductor & Cables, which has cut its imports of raw steel and cables by half this year.

Slumping stock markets aggravate the problem. More than $20 billion flowed out of emerging-market equities in the third quarter, estimates the Institute of International Finance, a Washington association of financial firms. Ukrainian stocks are off 77% this year, shares in Bucharest have plummeted 67%, and Sofia's bourse has dropped 66%. In Moscow, where the RTS stock index is down by 71%, oligarchs who pledged shares in their companies as collateral on loans from Western banks now are having trouble making payments.

Small wonder, then, that businesspeople around the world feel whipsawed. "The value of the [Turkish] lira doesn't depend so much on the performance of the Turkish economy, but on decisions made by people that have invested in Turkey," laments Mahmut Derya Uras, general manager of Transturk Holding, a machine tool company in Istanbul. Uras concedes, though, that the crisis underscores the need for economic restructuring in Turkey. "It can be used," he says, "as an opportunity to change."

http://images.businessweek.com/mz/08/44/popup_0844_emerging_map.jpg

http://www.businessweek.com/magazine/content/08_44/b4106040079485.htm?chan=globalbiz_europe+index+page_top+stories

siamu maharaj

October 24th, 2008, 08:51 AM

siamu maharaj

October 24th, 2008, 08:58 AM

Good thing is that our debt-to-GDP ratio is smaller, but it's bound to go up drastically. Goddamnit!

October 24th, 2008, 09:01 AM

As if we have a huge pot of gold left in our kitty:

Jobs for relatives pledged Karsaz tragedy victims to get plots, financial aid

KARACHI, Oct 23: Sindh Chief Minister Syed Qaim Ali Shah on Thursday paid tribute to the “martyrs” of the Oct 18, 2007 attacks on Ms Benazir Bhutto’s homecoming rally and announced that the government would give to the grieving families not only plots, but also the financial assistance to construct the houses.

He also announced that one member of the affected family would be given a government job according to his/her qualification which would be in addition to the financial assistance of Rs100,000 paid to them.

The chief minister, who is also the president of the Sindh chapter of the Pakistan People’s Party, also endorsed a decision of the Karachi chapter of the PPP to bear all educational expenses of the children of the party loyalists who lost their lives on Oct 18. It has also been decided to provide full medical cover to their families.

“We are not the party of only good times, but of those who also equally share the responsibilities of good and bad times,” Mr Shah assured the family members and relatives of those who lost their lives while providing security cover to their party leader when two bombs exploded, one after an other, in the welcome procession near Karsaz Bridge on Sharae Faisal.

The chief minister, who was addressing a memorial function arranged at the Chief Minister’s House, announced that allotment letters of the plots would be handed over to them by President Asif Ali Zardari.

Before the start of the function the chief minister refused to sit on the stage as a gesture of respect for the victim families.

He said President Zardari was keen to meet the heirs of brave and bold party activists and wanted to share some moments with them.

The chief minister announced that according to the wishes of Ms Benazir Bhutto and President Asif Zardari, the Sindh government would construct a memorial at the place of the tragedy. He said its foundation stone was to be laid by the president on Oct 18, but due an engagement the president couldn’t make it. However, after the completion of the monument, President Zardari would perform its inauguration.

A replica of the memorial was also placed on the stage.

Mr Shah also recalled the bold refusal of Ms Benazir Bhutto to stay back at home after the incident. He said that despite the government’s advice that her life was in danger and she should stay inside the Bilawal House, she rushed to the hospital to see the injured.

He said when they were organising a “Jannisaran-iBhutto” batch, thousands of youths had offered their services, but in the end only a batch of 2,000 could be prepared who proved their loyalty.

The chief minister said that most of the victims of the blast were from Karachi while there were others who were from the interior of Sindh, Punjab and NWFP and some of them were even from Siachen Glacier.

He expressed gratitude to Faisal Abdi, Rashid Rabbani, Waqar Mehdi and Junaid who compiled a list of victims of the Oct 18 tragedy.

Earlier, Faisal Abdi read out the names of the victims of the tragedy in which 150 people were killed and over 600 injured.

Before the speeches a collective prayer was offered for martyrs and for Ms Benazir Bhutto.

Waqar Mehdi conducted the proceedings which concluded with slogans of “Long live Bhutto” “Long live Benazir”.

Makhdoom Jamil-uz-Zaman, Rafique Engineer, Shazia Marri and Shehla Raza etc and other party officials were also present.

- Dawn

:ohno:

siamu maharaj

October 24th, 2008, 09:40 AM

Of course it makes perfect sense to give them plots! While we are at it, these PPP-jiyalas must also get cars and free elec and phones. Go the whole nine yards, eh!

October 24th, 2008, 09:43 AM

Of course it makes perfect sense to give them plots! While we are at it, these PPP-jiyalas must also get cars and free elec and phones. Go the whole nine yards, eh!

So they get free plots, free money to construct houses on those plots, free health care, free education, Rs 100,000 to each person who died, yeah I think we're missing out the cars and phones, lets throw it in!

Pathanboy

October 24th, 2008, 12:39 PM

Hi Brightside, thanks for your reply but you this "illusion of wealth" you talk about is bull. GDP is an indicator of internal wealth, the debt ceilings, the S & P ratings. These were all far better off under the previous government. The external and internal debt of Pakistan relative to Forex earnings shrunk dramatically between 1999-2007 and this is probably the best indicator that the illusion of wealth was greatest in 1999, and much less in 2007.

FDI poured into Pakistan but it was mainly in the telecom sector and banking sector. If you compare industrial growth with growth in the insurance/financial sector, you will find that the difference was huge in favor of the latter. Actually, Pakistan attracted FDI because it's image improved in Western countries for being an ally of the USA and after recieving so much praise from the White House, and also because there was relative political stability for a few years in a row.

FDI poured into Pakistan from 1999-2007 because not because of Pakistan being an ally in WoT (most investors could not care less about Pakistan's WoT as long as they get healthy returns on their investment), but because it appeared that Pakistan was headed in the right direction - eliminating terrorism, making the country more secure, political stability under Musharraf, and economic reforms most importantly).

The consumption fuelled growth did create an illusion because we were not consuming items made in Pakistan, we were importing them and suddenly we had expensive cars, expensive mobile phones, expensive flat screen TVs, expensive entertainment equipment seen in Pakistan. Where did the machines for Karachi's bowling alley's come from? Where did the Nokias and the Samsungs come from? Where did the Accords and Camry's come from? Where did PS2's and split air conditioners come from? Definitely not from Pakistan. All these things suddenly started showing up everywhere at the turn of the century and that gave us the impression that our country was getting richer, when infact the opposite was happening.

No, the Accords, the Camry's or whatever make no difference. There was a year on 7-9% increase in GDP which was one indicator that real wealth - that of internally manufactured products - had increased. This could be seen all over the country in the imported Camrys and Accords you say. Without an increase in real wealth within the country, these cars etc cannot be imported - creditors aren't going to lend you money if you can't pay it back for example. It was no illusion, simply they were affordable.

The agriculture sector did not infact grow as much as it should have, and it's share in the overall GDP was reduced (IMO that is great, I hate agriculture), and considering the fact that 40% of our labor force is employed in this sector, most people of Pakistan saw little benefit of the economic "boom" of 2001-07. Many good things happened during that timeframe, but the government was unable to stem consumption in time to save Pakistan's economy, perhaps because the man in charge was preoccupied with other matters near the end of his term.

The agriculture sector did not grow as much as industry and services under the tenure of Musharraf because the economy was shifting towards large scale manufacturing and service, like most modern countries. Agriculture is something associated with banana republics.

Pathanboy

October 24th, 2008, 01:23 PM

"In September the entire banking system was on the brink of total meltdown, because of semi-rational fears that almost no bank was safe from collapse.
And now we're seeing a massive flight of capital out of economies perceived to have been living beyond their means - either because they have a substantial reliance on foreign borrowings, or because they are net importers of good and services, or both.

Commercial lenders to these economies - banks, hedge funds, mutual funds and so on - want their money back now. That's driving down their currencies, pushing up the cost of borrowing for their respective governments and undermining the strength of their respective banking systems.

So they need financial help to tide them over - and with the global economy slowing down, those economies perceived as lacking the resources to cope on their own may need support for months and years.

Queuing up for the intensive care ward are Iceland, Hungary, Pakistan, Ukraine and Belarus, all of which are in discussions about accessing special loans from the International Monetary Fund, the emergency medical service for the global economy."

Now who the fluck around here called me an ignorant faggot for suggesting this??? Now even the BBC agrees with me! Ha! This goes out to PathanBoy (not a personal attack, just that I saw your name when I scrolled up) and the rest in several other threads. For more info, refer to http://www.skyscrapercity.com/showthread.php?p=26896068#post26896068

Trappy, can you please embolden these parts in a bigger font and some nice quoting or something?!

Where in that article does it confirm anything that you said? Would be helpful if you can point it out. It merely says Pakistan is seeking IMF assistance for a bad economy. No big news there.

There have been countries living beyond their means. Pakistan was not one of them. In 1999, external debt was 300% of forex earnings, by 2007, it was 111.7%. That's a 6 fold decrease. Internal debt fell by half over the same time period. This means that Pakistan was actually being more self reliant on the products created within the country in 2007, than it was in 1999. The statement that this illusion of wealth occured at the turn of the century is wrong, there was a decrease in the illusion of wealth between 1999-2007.

http://www.brecorder.com/index.php?id=524797&currPageNo=2&query=&search=&term=&supDate=

The only thing that happened is that since the new governement took over, terrorism has rocketed, political instability occurred, a crook has stolen both the prime minister and presidential seat, investors have pulled out because they don't know what will happen to their money - will they lose, 10% or 20%. Not even China was willing to give Zardari a loan!

siamu maharaj

October 24th, 2008, 04:59 PM

Seriously, my profile pic should give it away whom I support and whom I hate, and I'd probably kill Zardari if I ever see him, but that doesn't mean my head is up my ass.

siamu maharaj

October 24th, 2008, 05:00 PM

Also, I never said anything nice about Zardari, what I said was that the whole nation is worthless, why point fingers at one guy?

Pathanboy

October 25th, 2008, 08:12 AM

Seriously, my profile pic should give it away whom I support and whom I hate, and I'd probably kill Zardari if I ever see him, but that doesn't mean my head is up my ass.

You support Karl Marx?

Anyhow what you're saying is wrong. Pakistan's internal and external debt was greatly reduced between 1999-2007, and it was paying for goods in real money as indicated by the debt to forex ratio decreasing over this period.

Also, I never said anything nice about Zardari, what I said was that the whole nation is worthless, why point fingers at one guy?

Because Zardari is educated enough, rich enough, and is the one in the position of power. The average citizen of Pakistan can't even read or write, so how are they expected to make a rational decision in an election?

Intoxication

October 25th, 2008, 09:41 AM

If Entire Countries Go Broke, We'll Go With Them

The global financial market is like a rich, generous but occasionally paranoid great uncle. Normally, this benevolent great uncle sprinkles money calmly and wisely throughout the family, taking a careful reading of risk and potential investment reward. But every so often, a deep paranoia overtakes him. Panicked, he turns off the spigot. Why? Sometimes he thinks his relatives are not telling him everything he needs to know. Other times, paranoia sets in because the facts of a relative's scenario don't add up.

Today the great uncle has reached a level of paranoia not seen since the 1930s, and the massive "shock and awe" campaign of bold rescue efforts from the world's wealthiest countries has not calmed him down. The world financial market still thinks the numbers don't add up.

This is primarily because of a new and fast-moving blip on the global radar screen: the growing concern that entire countries could default on their financial obligations. While Washington frets about bank failures and the potential collapse of the corporate sector, the financial market is far ahead of it. Global markets are now fixated on the economic, social, political and foreign policy shipwrecks that could be triggered if waves of country defaults sweep across the world.

In an alarming number of nations, the amount of dubious debt held by the domestic banking system dwarfs the country's GDP. This is particularly true in such emerging capitalist economies as Hungary, Iceland, Belarus, Ukraine and Pakistan.

That's scary. In the past, some emerging market economies have defaulted (Argentina comes to mind) and managed to survive without dragging the rest of the world off a cliff. But things are different today. The global financial system itself is on life support. If an emerging market collapses, the damage won't be limited to just one country.

Here's why all this matters to the average working American: Emerging markets are major purchasers of U.S. exports and a critical engine of global growth. If their economies fail, ours will fail, too.

The root of today's credit crisis is not that the world lacks money; the world is awash in cash, with $6 trillion sitting idly in global money markets alone. But if countries start to fail, the remainder of the world's investment capital could be spooked out of productive investments as well.

Nor do we have the tools to avert disaster. The International Monetary Fund's resources are a pittance compared to the financial exposure of the countries in most danger. And as a result of the industrialized world's government bailouts and bank guarantees, there won't be any more capital for emerging markets that are still flailing.

Take, for example, a country as large and powerful as Germany: Deutsche Bank's assets represent 80 percent of the nation's GDP. In Switzerland, the assets of the bank UBS represent 450 percent of the country's GDP. The financial exposure of the British banks is similarly alarming: Barclays PLC's assets amount to more than 100 percent of the United Kingdom's GDP, and the Royal Bank of Scotland's holdings reach 140 percent of British GDP.

These countries aren't even the biggest worry. That honor goes to the nations of Eastern Europe and some of the undercapitalized Asian countries. But globalization means we're all connected. If Hungary were to default on its financial obligations, Austria's banks would soon collapse. If that happened, Germany's banks might well follow suit.

There's plenty to fret about in Asia, too. Pakistan is facing default. Many investors worry about South Korea as well: Its exports are plummeting, and foreign investors are fleeing an already weak stock market. In an emergency, would the South Korean government, or even the IMF, have the resources to come to the rescue? We can't be sure.

American investors wouldn't be of much use, either. After all, what banker in today's partially taxpayer-owned, soon-to-be-politicized financial system would want to testify before Congress about a risky loan to some small foreign country when safe domestic investments had been available?

Note, too, that the slowdown in securitization -- the slicing and dicing of assets to be sold as securities -- will add to this potential mess. In the past, the much-maligned process funneled huge amounts of capital to the developing world. That's not going to be happening anymore, at least not for a while.

No wonder global markets are so jittery about the prospect of countries defaulting. The rich, developed countries enjoy huge resources that can save them from financial collapse. But those resources are not unlimited. In Europe, taxes as a percentage of GDP have grown to 43 percent (compared to roughly 20 percent for the United States). Translation: If Hungary, Pakistan or South Korea went broke and European governments were forced to raise taxes to finance a bailout, the economic pain would be excruciating.

That is why the "shock and awe" of the current bank bailout efforts hasn't yet stabilized world financial markets. Investors suspect that the problem is just too expensive to confront. The IMF estimates that global banks have already lost $1.4 trillion. By the time the world fully enters into recession next year, global bank losses will almost certainly have increased dramatically. Some experts expect them to reach a whopping $5 trillion.

So the question remains: Do the world's governments have the resources to take on such a massive rescue operation? The global markets aren't sure.

Our next president, beginning the day after the election, needs to call for global contingency plans in case countries collapse -- because the financial market will bet against the global economy as long as this uncertainty exists. Eliminate that uncertainty, or at least show how the world economy will cope with such calamities, and our policymakers can return to the thorny job of cajoling our bankers into lending again. The great uncle is not assuming that the worst is over.

David Smick, a global financial strategist, is the author of "The World Is Curved: Hidden Dangers to the Global Economy."

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/24/AR2008102402933.html

You support Karl Marx?

Musharraf, he just recently changed his avatar & sig.

siamu maharaj

October 25th, 2008, 10:03 AM

You support Karl Marx?

Anyhow what you're saying is wrong. Pakistan's internal and external debt was greatly reduced between 1999-2007, and it was paying for goods in real money as indicated by the debt to forex ratio decreasing over this period.

Because Zardari is educated enough, rich enough, and is the one in the position of power. The average citizen of Pakistan can't even read or write, so how are they expected to make a rational decision in an election?
Please share with me any religion or law or philosophy or constitution that says only rich educated people in positions of power are supposed to do right. Thanks. If that's your own personal view, I don't think it has much support except from people who are themselves worthless and loev to spend the whole day blaming the gov. for everyhting that's wrong.

Pathanboy

October 25th, 2008, 11:51 AM

Please share with me any religion or law or philosophy or constitution that says only rich educated people in positions of power are supposed to do right. Thanks. If that's your own personal view, I don't think it has much support except from people who are themselves worthless and loev to spend the whole day blaming the gov. for everyhting that's wrong.

It's the responsibility of the government to ensure the country runs smoothly and prospers, is it not? You can't say that Zardari is not educated enough to carry out this task, can you?

singaporean

October 25th, 2008, 07:48 PM

ISLAMABAD: Pakistan and USA on Friday signed and witnessed six agreements to the tune of $ 339.10 for the year 2008-09 under existing Strategic Objective Agreements (SOGA) for Education, Economic Growth, Governance, Health and Population Welfare, Earthquake Reconstruction Programme and FATA Development Programme. Earlier Ms. Anne Aarnes, Director, USAID/Pakistan and Farrukh Qayyum, Secretary, Economic Affairs Division, signed these SOGA Amendments on behalf of their respective governments, whereas James Kunder, Acting Deputy Administrator of USAID, Gerald Feierstein, Deputy Chief of Mission, US Embassy, Islamabad and Shaukat Tareen, Adviser to Prime Minister on Finance, Revenue and Economic Affairs signed the agreements as witnesses.
The detail of amount under respective SOGA is as under:For Education Sector Support Programme US Government has committed to provide $ 128.9 million. This contribution will strengthen and improve basic education and higher education programme.
It will further enhance the need and merit based scholarships programme with the collaboration of Pakistan Higher Education Commission.
The financial assistance under Governance to the tune of $ 23.2 million will be spent for improvement of justice system, civil participation and media freedom, improvement in electoral process and decentralization programme. Similarly the amount allocated for Health & Population Welfare of $ 76.5 million will ensure improvement of reproductive health, HIV Aids, Tuberculosis, maternal and child health and water supply and sanitation in different parts of the country.
The financial assistance under economic growth amounting to $ 43.5 million will ensure the economic stability in the areas such as trade & investment, infrastructure, agriculture, private sector competitiveness and strengthening of micro enterprises productivity.

Naresh

October 26th, 2008, 12:26 AM

China to buy National Bank shares to help economy (http://www.thenews.com.pk/top_story_detail.asp?Id=18001)

By Khalid Mustafa

ISLAMABAD : Twenty-six per cent shares of the National Bank of Pakistan will be sold to China in a bid to get urgent help for the country’s banking system.

Heads of the Bank of China, the XEM Bank of China, the People’s Bank of China and the China International Bank are due in Pakistan next week to assess the country‚Äôs needs and explore opportunities to invest in various sectors, particularly in banking.

“Beijing gave this commitment to Islamabad during the recent visit of President Asif Ali Zardari. This will help strengthen the country’s banking industry, which is on the decline because of a liquidity crunch and the fast depleting foreign reserves,” a top official, who was a part of the president’s delegation during his visit to China, told The News.

“In addition, prominent banks of China would not only open their branches here in Pakistan but they would also be enlisted in the stock exchange creating opportunities for local investors to purchase shares of Chinese banks,” the official said, adding: “This would also strengthen the capital market manifold.”

The official said the government had already offloaded 23 per cent shares of the bank some three years back. “So China has offered to purchase the bank’s 26 per cent shares,” he added.

Cheers:cheers:

Pathanboy

October 26th, 2008, 09:11 AM

“Beijing gave this commitment to Islamabad during the recent visit of President Asif Ali Zardari. This will help strengthen the country’s banking industry, which is on the decline because of a liquidity crunch and the fast depleting foreign reserves,” a top official, who was a part of the president’s delegation during his visit to China, told The News."

^^This is all bull.. Investors were pulling out way before the credit crunch. I can only think of two reasons why, neither has to do with the credit crunch.

slashcruise

October 26th, 2008, 10:29 AM

Pakistan needs IMF help badly

It seems only months ago that the International Monetary Fund had to fend off attacks on its legitimacy and role. With few full-blown emerging market crises around, its funding model of extending loans to countries in need of foreign currency looked increasingly outdated. But now, amid global financial turmoil, countries are queuing up for support. Pakistan is the most precarious case. It needs help but the IMF has to tread carefully.

Pakistan’s economy is in trouble: growth is slowing; inflation is at a 30-year high; the current account deficit widened to 8.5 per cent of gross domestic product in the past fiscal year; and the IMF estimates the budget deficit to have been 7.7 per cent of GDP. As foreign investors withdrew capital, foreign exchange reserves and the rupee plunged. Markets fret about a balance of payments crisis and Pakistan’s ability to service interest payments on its foreign currency debt.
EDITOR’S CHOICE
Pakistan seeks IMF loan deal - Oct-19
Pakistan discusses IMF aid option - Oct-18
Pakistan seeks $4bn financial support - Oct-17
Beijing assures Pakistan of financial support - Oct-16
Pakistan's default risk - Oct-15
Pakistan rupee hits record low - Oct-07

A loan from the IMF, possibly jointly with other international institutions and bilateral donors, would shore up confidence. Pakistan may need up to $15bn over two years. This should stave off any immediate crisis. In order to address longer-term problems, however, structural reforms are needed, as they have been for years.

Crucially, a shift of spending from defence to education is needed. Literacy rates are among the lowest in Asia and the military monopolises resources, including foreign aid. Most of the $12bn aid the US has supplied during the “war on terror” has been earmarked for the army.

But the IMF faces a dilemma: how far can it force reform by attaching conditions to the loan? Heavy-handed intervention would be deeply unpopular in Pakistan. But if some aspects of conditionality look too risky, Pakistan’s government should nevertheless be induced to endorse tax reform, raise spending on education and commit to rebuilding the country’s institutions.

Pakistan’s strategic importance means any loan will have a political dimension. The country has an unresolved conflict with its arch-rival, India, over Kashmir; has been sucked into fighting on its Afghan border; has a weak government; and is nuclear-armed. After supporting General Pervez Musharraf, the west needs to show real commitment to making civilian government work.

President Asif Ali Zardari must be given the means to try to overcome the current crisis as well as improve the country’s long-term prospects. The best hope is an IMF loan, augmented by individual countries, that is flexible on conditions without compromising on the most vital of reforms

singaporean

October 27th, 2008, 08:15 AM

ISLAMABAD: The Pakistan People’s Party (PPP) government will arrange road shows in four Middle Eastern countries this year to export a quarter million skilled Pakistanis in the next two to three years, The News has learnt.

“The four road shows will be arranged in Saudi Arabia, the UAE, Bahrain and Qatar before Dec 31,” official sources in the Gilani government said on Sunday. An official said the government was making arrangements to put in place job placement mechanism under the umbrella of the National Vocational and Technical Education Commission (NAVTEC), which would make efforts to export skilled labour force. The labour force would complete its training at 1,300 vocational institutes across the country.

In an exclusive chat with The News, NAVTEC Chairman Adnan A Khawaja said that the government had brought major changes in the policy of the commission by focusing only on four major sectors rather than the 218 sectors identified by the previous regime.

“We will focus upon developing skills of workers in agriculture and livestock, construction, information technology, telecom and services sectors,” he said and added the government would make all efforts to train at least 100,000 skilled workers before June 30.

“The PPP government plans to ensure export of one to two million workers during its five-year tenure,” he said, adding there was a need to motivate the youth below 20 years whose population was around 90 million in the country.

He said that the government had increased stipend for students of vocational training institutes from Rs 1,000 to Rs 2,000 per month payable even to fresh students. He also said that the prime minister’s initiative of ëHunarmand Pakistaní would be launched in December in Peshawar.

“The NAVTEC initiative has so far trained 72,000 skilled workers in the country and our target is to train at least 100,000 in this financial year,” he added. He said the NAVTEC was making efforts to rehabilitate the training centre given by China, which had state-of-the-art facilities, where students from Fata would be equipped with the latest technology.

He said that the government had increased the budget of the NAVTEC from Rs 510 million in the last financial year to Rs two billion in the current financial year. “We will focus on public-private partnership in order to promote vocational training with the help of the private sector,” he added.

He said the NAVTEC was going to propose to the government to provide school buildings for giving vocational training in the evening to bridge the demand gap.“Donor agencies such as the USAID, JICA and others are ready to extend financial help for promoting vocational training in Pakistan,” he added.

Quoting a Unesco report, he said Pakistan’s statistics showed that the gross enrolment rate (GER) in the higher secondary education was nine per cent but in Europe and Oceania (Australia, New Zealand and Pacific Island), the GER was 69 per cent and 62 per cent, respectively. “There is a huge potential that needs to be attracted towards vocational training,” he concluded.

Intoxication

October 27th, 2008, 06:08 PM

PakFan

October 27th, 2008, 06:27 PM

^^ Let's not get excited as it could just be down to lazy journalism and loose use of grammar.

I suspect not many governments would wish to encourage or support a brain drain but who knows.

slashcruise

October 27th, 2008, 09:00 PM

I think one of the reasons which I can think of is to get foreign exchange into the country but it doesnt mean that I think its the right way to go forward.Pakistan need skill ed workforce to ensure it remains competitive globally.....

Nouman_26

October 28th, 2008, 10:22 AM

KARACHI (October 28 2008): The profit after tax of Oil and Gas Development Company Limited (OGDC) has increased to Rs 18.975 billion in the quarter ended September 30, 2008 as compared to Rs 12.336 billion earned in the corresponding period a year back. The company's earning per share surged to Rs 4.41 in the period under review against Rs 2.87 in the same period last year.

The board of directors of the company in its meeting held Monday approved the first interim cash dividend for the year 2008-09 on the basis of accounts for the period ended September 30, 2008 at Rs 2.00 per share ie 20 percent. According to results, the company's net sales surged to Rs 41.282 billion in this quarter against Rs 27.768 billion the same quarter last year.

The company paid Rs 4.950 billion on account of royalty, operating expenses and transportation charges in this period against Rs 4.066 billion in the same period a year back. The company's other income increased to Rs 2,146.755 million against Rs 638.945 million. The profit before tax of the company increased to Rs 28.789 billion in this quarter against Rs 17.195 billion in the same quarter last year.

singaporean

October 28th, 2008, 01:23 PM

ISLAMABAD: President Asif Ali Zardari on Monday presided over a meeting at the Aiwan-e-Sadr with special focus on manpower export to Saudi Arabia. During his visit to Saudi Arabia, President Zardari had sought the Saudi Arabian government’s relaxation on its strict criteria regarding import of literate skilled workers.

Minister for Labour and Manpower Syed Khursheed Ahmed Shah, Senator Muhammad Enver Baig and the secretary Labour and Manpower attended the meeting. Saudi Ambassador to Pakistan Ali Awadh Al-Asseri also attended the meeting on special invitation.

The president remarked that the overseas Pakistani workers were the second largest source of foreign exchange earning after the exports of the country.He said the government accorded highest priority to manpower export from Pakistan.

Earlier, in his presentation, Khursheed Shah highlighted problems and issues involved in the manpower export.According to sources, it was pointed out to the president the Nevtec had given a wrong figure that it trained 70,000 skilled workers and on the contrary the government figures stood at 28,000 skilled workers in unknown categories. The Saudi ambassador said that the Kingdom valued skilled manpower import from Pakistan.

http://thenews.com.pk/daily_detail.asp?id=143456

October 28th, 2008, 02:49 PM

http://i286.photobucket.com/albums/ll105/qaicer/col2.gif

-SchizoPhrenic

October 28th, 2008, 09:42 PM

^Reading the name of the writer i cant read it..He is too biased..Anyways im not a economy expert but ive heared if only Zardari puts not all but some of his money in banks of Pakistan,pakistan is gonna get outta these crisis...

Intoxication

October 29th, 2008, 09:14 PM

Emerging Economies Hit Hard by the Financial Crisis
By Bill Powell Tuesday, Oct. 28, 2008

http://img.timeinc.net/time/daily/2008/0810/emerging_econ_1028.jpg
A Pakistani money changer counts rupees in Karachi on Oct. 24

Earlier this year, one of the great hopes for the world economy dodging the bullet of America's subprime mortgage meltdown was the robust growth in developing economies — and the hope that the consumer markets they generated at home would take up the slack as Western consumers were forced to tighten their belts. But the financial crisis that started with homeowners walking away from mortgages on Main Street, U.S.A., has begun to roil the teeming bazaars of Islamabad, the old-world neighborhoods of Budapest and the gleaming office towers of São Paulo.

Countries are now lining up, tin cups in hand, seeking bailouts from the International Monetary Fund (IMF). And the line is lengthening. Iceland got $2 billion; Ukraine, $16.5 billion. Hungary needs $12.5 billion, and then there's nuclear-armed Pakistan, perhaps the world's most combustible country, which needs up to $15 billion to stave off potential financial collapse. So dangerous is the situation in Pakistan that the government has to hold negotiations with IMF officials in Dubai — the IMF declared Pakistan off-limits for its personnel after a bomb ripped through the Marriott Hotel in Islamabad last month. Pakistan has just six days before its dwindling foreign-exchange reserves run out, the Foreign Minister told his German counterpart, Frank-Walter Steinmeier, on Tuesday. Steinmeier helpfully suggested that because the situation in Pakistan was so difficult, the IMF ought to expedite negotiations over the bailout that are set to conclude next month.

The massive global flight from anything but the safest investment — if, in this market, such a thing exists — started late in the summer, and has now crippled emerging markets. The speed with which this has happened has been extraordinary, and it took the IMF very much by surprise, fund insiders say. "A year ago, it was the emerging markets that were carrying the world," says an IMF official. "Boy is that over." In fact, countries like Russia and Kazakhstan that just six months ago were fat and happy on a diet of petro dollars are now burning through national "rainy day" funds and bailing out banks that had only peripheral exposure to subprime mortgages. Their problem now is foreign-equity investors — hedge funds in particular — stampeding for the exits.

But it's not only sophisticated investors driving the crisis as they unwind their positions all over the world in order to repatriate dollars and meet margin calls. Consider the so-called yen carry trade, in which anyone could borrow money in the Japanese currency at extremely low interest rates (the key policy rate at the Bank of Japan is still just 0.5%) and invest in higher-yielding currencies like the New Zealand dollar, where interest rates were 6% or higher, and then pocket the difference. Unfortunately, the allure of the low-yielding yen also appealed to prospective home buyers in Hungary, where in the first quarter of this year, according to Budapest's central bank, 5% to 10% of all new mortgages were yen-based loans. (You read that correctly: 5% to 10% of all mortgages written in Hungary earlier this year were yen-based loans.) Since then, the yen has soared in value against the dollar — reaching a 13-year high on Monday — as well as against most other currencies. That's because investors all over the world are repaying yen loans or, in Wall Street's jargon, "unwinding the yen carry trade," as the flight to cash continues. That in turn has made the cost of a yen-based mortgage much higher for Hungarians, whose salaries are paid in forints, the local currency that has plunged more than 15% against the yen in the past six months, to produce a classic example of financial-sector turmoil trickling down to the real economy.

The financial crisis is now beginning to slow real economic activity — in some cases quite dramatically — all over the world. Consumer sentiment in Seoul, the capital of South Korea, has plunged to its lowest level in eight years, as the won, the local currency, has weakened sharply and stocks have plunged. Park Yung Tae is an office worker who was laid off earlier this year and invested his severance pay in the KOPSI, the Korean stock market. Big mistake. His life savings of $50,000 has been trimmed to just $10,000. Ship owners in Hong Kong say the rates for hiring the large container vessels that ship consumer electronics, toys and clothes to the West have fallen 40% in the past two months, amid a drastic slowdown in international trade. And across what had been the booming economies of Eastern Europe, growth has slowed sharply, economists say.

The real economic pain in emerging markets matters immensely to the economic prospects of the U.S. and other developed countries. Indeed, to the extent that that there was growth in the U.S. earlier this year, it was buttressed by strong exports. Now that prop underneath the world's economy has buckled. Jonathan Lipsky, first deputy managing director at the IMF, says 100% of the global growth forecast by the fund for 2009 was to have occurred in emerging markets. "Now," he says, "we have to make sure that potential is protected." That's plainly going to be an expensive proposition. The IMF is now ladling out cash as fast as suddenly bankrupt economies line up for it. The fund has $200 billion on hand and access to about another $50 billion to manage the intensifying global emergency. Chances are it will need all of those funds, and a lot more besides, before this is over.

http://www.time.com/time/business/article/0,8599,1854541,00.html

ISLAMABAD: President Asif Ali Zardari on Monday presided over a meeting at the Aiwan-e-Sadr with special focus on manpower export to Saudi Arabia. During his visit to Saudi Arabia, President Zardari had sought the Saudi Arabian government’s relaxation on its strict criteria regarding import of literate skilled workers.

Minister for Labour and Manpower Syed Khursheed Ahmed Shah, Senator Muhammad Enver Baig and the secretary Labour and Manpower attended the meeting. Saudi Ambassador to Pakistan Ali Awadh Al-Asseri also attended the meeting on special invitation.

The president remarked that the overseas Pakistani workers were the second largest source of foreign exchange earning after the exports of the country.He said the government accorded highest priority to manpower export from Pakistan.

Earlier, in his presentation, Khursheed Shah highlighted problems and issues involved in the manpower export.According to sources, it was pointed out to the president the Nevtec had given a wrong figure that it trained 70,000 skilled workers and on the contrary the government figures stood at 28,000 skilled workers in unknown categories. The Saudi ambassador said that the Kingdom valued skilled manpower import from Pakistan.

http://thenews.com.pk/daily_detail.asp?id=143456

If Zardari really goes ahead with this plan to export skilled manpower, than I'm personally going to go down to Islamabad and beat his ass!! :mad:

@ singaporean

Thanks for putting the url in. :)

sourierservice

October 30th, 2008, 03:13 AM

Work on 1,000 projects stopped
Thursday, October 30, 2008
By Mehtab Haider

ISLAMABAD: Work on over 1,000 development projects worth billions of rupees has been halted owing to a massive cut of 65 per cent in fund releases, The News has learnt.

Actual funds released by the Ministry of Finance were only Rs20 billion in the first quarter (July-September) of 2008-09 under the Public Sector Development Programme (PSDP) against an allocated amount of Rs56 billion in accordance with approved cash plan.

“This has adversely affected over 80 per cent development projects out of a total of 2,000 projects in PSDP list,” a senior official of the Planning Commission confided to The News here on Wednesday.

Executive Committee of the National Economic Council (ECNEC) is scheduled to meet on November 6 with Prime Minister Syed Yousuf Raza Gilani in the chair for approving various development projects, but it would also take up the issue of a massive cut in fund releases in the current fiscal year.

In the wake of financial constraints when the government struggles to keep fiscal deficit within the desired range of 4.3 per cent of GDP, the development sector has once again become a major victim and public sector investment for improving infrastructure would be affected negatively and real GDP growth would fall.

Ongoing work on all mega projects, especially those related to infrastructure, water and power such as Mangla raising project, has been affected, virtually halting development activities because funds were also slashed in the fourth quarter (April-June) of last financial year 2007-08.

This correspondent visited the office of Secretary Planning Division Sohail Safdar on Wednesday, who confirmed that actual releases made by the finance ministry stood at Rs20 billion against demand of Rs56 billion in the first quarter of the current financial year.

“Before ECNEC meeting, we are going to hold a meeting with the Adviser to PM on Finance, Shaukat Tarin, to ask him for a ‘resource envelop’ for the remaining three quarters of the current year,” he said and added it would enable planning managers to set priorities in close coordination with the ministries concerned.

However, some sources in the Planning Commission insisted that actual releases were only Rs17 billion in the first quarter against allocated amount of around Rs60 billion in accordance with approved cash plan.

“Fund releases are just 37 per cent of the allocated amount,” a source said and added the minimum cut in releases was borne by development projects of Higher Education Commission (HEC), which was around 11 per cent.

An official document showed that most affected sectors were water and power, National Highway Authority (NHA) and some others.

Citing examples, sources said the government had allocated Rs2 billion for revamping and rehabilitation of the irrigation and drainage system of Sindh, but actual releases were only Rs300 million.

The government allocated Rs4 billion for the extension of Right Bank Outfall Drainage from Sehwan (RBOD-II) but actual releases were Rs600 million. It allocated Rs8.5 billion for Kachhi Flood Canal Project (Phase-I) but released only Rs200 million.

The government allocated Rs100 million for the extension of Bhakkar Flood Protection Bundi from RD-42-72 Basti Mian Khan to Basti Bakkhar in District Bhakkar but it released only Rs15 million.

oogabooga

October 30th, 2008, 03:17 AM

:happy:

:cheer:

GoBaby

October 30th, 2008, 03:54 AM

We're back in the golden age (90's) of democracy.

:bash:

spyk

October 30th, 2008, 09:06 AM

IMF still insisting on big increase in discount rate
RECORDER REPORT
ISLAMABAD (October 30 2008): Pakistan has reportedly agreed to a front loaded stabilisation programme of $6 billion for a period of 20 months with the International Monetary Fund. This will be in addition to $4 billion the country is expecting to get from other multilateral sources.

According to informed sources, Pakistan would receive up to US dollar three billion as a first tranche after due approval from the Fund's Board of Directors. The talks held in Dubai between the two sides concluded on Wednesday without reaching an agreement on the discount rate. The IMF wants that discount rate is adjusted upward by the State Bank of Pakistan.

Pakistan to get $3 billion as first tranche of $6 billion programme:

The programme will be for a 20- month period: The Fund team was initially asking for a four percent hike in the SBP policy rate. However, later, the seemingly tough conditionality was pruned to 3.5 percent.

With the support of all the relevant data the SBP Governor argued for four hours that it was not advisable to hike the rate so steeply in an environment of world-wide recession, causing a reduction in demand. The hike would raise the average lending rates to 18 to 20 percent range. Not only will the existing industrial units shut down, the feasibility of new investments would be seriously jeopardised, it was argued.

The Fund technical experts' reported stance appears to be in conformity with the standard macroeconomic model which requires a reduction in fiscal deficit and a more tighter monetary stance to reverse the present forex reserve loss. In the cases of Iceland and Hungary, the Fund has hiked the policy rate by three percent to around 18 percent. Iceland had reduced its prime rate by three percent.

The Fund has forced it to raise it by six percent. Hungary had also raised its base rate by three percent to avail help from the Fund. The Stand-By Arrangement (SBA) will commence in November 2008 and end in June 2010. Local economists fear that a rise in SBP discount rate would embellish inflation due to institutionalising of high interest rate.

Copyright Business Recorder, 2008

http://www.brecorder.com/index.php?id=827418&currPageNo=1&query=&search=&term=&supDate=

GoBaby

October 30th, 2008, 09:23 AM

not to derail the thread, but what's with the flag that UnitedPakistan has as his profile pic? it's all green with golden emblem in the middle. Does it have something to do with musharraf?

brightside.

October 30th, 2008, 04:44 PM

I think it's the flag of the Presidency. Not sure though.

Red aRRow

November 1st, 2008, 09:22 PM

^^Yes it is.

November 2nd, 2008, 12:20 AM

SIALKOT: Sialkot Chamber of Commerce and Industry (SCCI) President Dr Khurram Anwar Khawaja has said that Sialkot is an important economic centre and the only export-oriented city in Pakistan and development of local cottage industries here has assumed a model status for the developing world.

Talking to newsmen here Saturday, the chamber president said that thousands of small and medium enterprises in and around the city are engaged in honouring their global commitments of exporting quality goods including gloves, musical instruments, martial arts uniforms, cutlery and military uniform badges.

He said that the entrepreneurs who always focus all their energies and attention on quest of the best in combination with the incomparable expertise and skill of the local workers are exporting the highest quality products to the entire global market. The century-old history of sports goods and surgical industry has seen the industries developed to the highest international standards mainly due to business wisdom and natural sense of the entrepreneurs towards export. Other industrial sectors of Sialkot are also following the trend. The products standards being of exceptional quality are meant for markets of developed economics not affordable even for domestic markets, which is under developed. It is unique for Sialkot that everything produced here in exported.

continue... (http://thepost.com.pk/CorpNewsT.aspx?dtlid=190160&catid=8)

spyk

November 8th, 2008, 08:43 AM

RIYYADH (updated on: November 07, 2008, 20:51 PST): Saudi Arabia has agreed to give $4 billion to Pakistan and provide oil facility on one-year deferred payments, sources said.

During the meeting between King Abdullah bin Abdul Aziz and President Asif Ali Zardari, Saudi Arabia agreed to provide economic assistance and oil on one year deferred payment. Sources said a formal announcement in this regard will be made at the meeting of the 'Friends of Pakistan' to be held on November 17 at Abu Dhabi.

They said that Pakistan was aiming to accumulate $25 billion, which were being considered enough for bringing the economy back on track for the next 10 years. 'Moreover, King Abdullah during the one-on-one meeting with Zardari has also agreed to provide oil to Pakistan on one-year deferred payments, for which the agreement is expected to be signed soon.

Sources said Pakistan needed more than $ five billion within a month to meet its international obligations. 'The Friends of Pakistan' nations include the US, UK, France, Saudi Arabia, China, the UAE and several other countries, which are meeting in Abu Dhabi on November 17 to devise ways for stabilizing Pakistan's economy".

Copyright NNI (News Network International), 2008

spyk

November 8th, 2008, 08:44 AM

The Saudis are really helpful to us :)

spyk

November 8th, 2008, 09:12 AM

'Pakistan accepts most of IMF terms'

RECORDER REPORT
ISLAMABAD (November 08 2008): Pakistan has agreed with most of the conditionalities of International Monetary Fund (IMF), and its executive board is expected to meet next week to take final decision to help Pakistan in paying foreign debts. Official sources said that IMF executive board would meet some time next week. There is a possibility that the board will meet on November 10. However, the IMF has, so far, given no schedule of the meeting on its website.

Under the standby facility, Pakistan has requested for a loan of $9 billion for the next two years. Sources said that the board would meet just a few days ahead of the scheduled meeting of the 'Friends of Pakistan' (FOP) in Abu Dhabi. Some circles were of the view that Pakistan would not get more than $7 billion. Pakistan needs over $4 billion for payment of its debts. The amount is also needed to improve the country's falling forex reserves.

The IMF wants Pakistan to stop providing foreign exchange by the State Bank in opening LCs at the time of oil import, and abolishing the intervention in currency market by the central bank. These two conditions were put by the IMF, and the government accepted these conditions, sources said.

Copyright Business Recorder, 2008

http://www.brecorder.com/index.php?id=833740&currPageNo=1&query=&search=&term=&supDate=

sameerl

November 8th, 2008, 10:44 AM

It was unlikely that we would go any other way. Given the lack of original insight or the confidence and the wherewithal to sole our own problems, we resort to the begging bowl at the firts available opportunity. In the meanwhile, 2 banks have been forecfully sold, 2 stock brokers have gone bankrupt, and still there is no sign of a bankruptcy law, or an immediate piece of legislation that would precent a chaotic liquidation of assets, or allow predatory asset grabbing.

It is encouraging that the government has taken some positive steps, in the reduction of fuel prices, as well as the reduction of the cash reserve ratios for banks, allowing some liquidity to flow. Howver, if IMF prescriptions will be followed, interest rateswill have to be raised again, negating most of these moves, and then some.

singaporean

November 8th, 2008, 02:46 PM

ISLAMABAD, Nov 7: Prime Minister Yousuf Raza Gilani approved on Friday a plan to privatise Qadirpur gas field, Small and Medium Enterprises Bank and Heavy Electrical Complex.

The decision comes two days ahead of a scheduled meeting of the executive board of the International Monetary Fund (IMF) that will decide about a loan to Pakistan.

The decision, however, ignores strong opposition of trade unions of these units which have threatened to hold protests against the sale of what they said amounted to selling family silver.

Some political circles have criticised the plan to sell national assets at a time when it will be difficult to get a fair price.

While in opposition, the PPP itself had questioned the sale of state-owned units and called for a debate in parliament before any transaction.

Pakistan requires $3.5 billion to $4.5 billion to repay its debts during the current fiscal year. A similar deficit is expected for the next year as well. The government did not disclose the price it expects to get for the units.

The Cabinet Committee on Privatisation (CCOP) headed by the prime minister approved the plan for the sale of 37 per cent shares of Oil and Gas Development Company Limited’s Qadirpur gas field along with the transfer of operational control.

Stressing the need for taking all stakeholders on board, Mr Gilani urged the ministry of privatisation and the Privatisation Commission to address ‘all concerns’ before the gas field’s privatisation.

He said that quality players should be brought in for accelerating exploration and production.

Stressing the need for maintaining ‘utmost transparency’, Mr Gilani urged the ministry of privatisation to ensure that investors ensured creation of new job opportunities besides protecting jobs of existing employees.

The CCOP also approved the severance package agreed with the SME Bank employees and the bank’s valuation.

The bank’s transaction will include divestment of 93.88 per cent government shareholding along with the transfer of management control. The SME Bank has an unrestricted commercial banking licence.

The potential buyer will have to retain the name ‘SME Bank Ltd.’ for one year after the sale and maintain its charter for at least three years.

The government of Pakistan will retain the right to appoint at least one director on the board of directors.

The CCOP also approved the valuation of Heavy Electrical Complex and directed the Privatisation Commission to go ahead with the bidding process.

The buyer “shall continue to operate the company’s manufacturing facility and shall not in any way abandon, cease to operate or otherwise shut down the existing company manufacturing facility”.

The cost of ‘Golden Handshake Scheme’ for permanent workers and Voluntary Separation Scheme for the executives will be shared equally by the new buyer and the Privatisation Commission. The bidder shall bid on the basis of audited accounts of June 2006 and may also factor in the latest un-audited accounts available prior to the bidding.

Intoxication

November 8th, 2008, 09:51 PM

This article is a year old but very interesting:

Disparate tale of two Asian dictatorships

Wednesday, Oct. 10, 2007

By KISHORE MAHBUBANI

PRAGUE — Myanmar and Pakistan are both Asian countries whose military rulers are in trouble. But they are heading in opposite directions, because, whereas Pakistan understands why Asia is rising, Myanmar does not.

Asia is rising because Asian countries are increasingly opening their doors to modernity. Starting with Japan, this modernizing wave has swept through the four "Asian Tigers" (South Korea, Taiwan, Hong Kong and Singapore), some ASEAN countries (Malaysia, Indonesia, Thailand and Vietnam), and then to China and India. Now, it is moving into Pakistan and West Asia.

I was in Pakistan during one of its more exciting weeks. Exiled former Prime Minister Nawaz Sharif sought to return, but was promptly sent back into exile. The world expected a political eruption. Instead, the country carried on calmly.

Pakistan did not erupt because Pakistan's elite is focused on modernization. Led by Prime Minister Shaukat Aziz, who was formerly with Citibank, the country has carried out dramatic structural reforms, matching best practices in leading emerging-market economies. This explains high economic growth rates.

Pakistan has welcomed foreign trade and investment. And, just as the success of Indians in America inspired Indians in India, Pakistan stands to similarly benefit from its own successful diaspora.

But this opening to modernity extends beyond economics and finance. Yes, thousands of Islamic schools remain open and Islamic fundamentalism is strong. But this has not completely changed the fundamental texture of Pakistan's society.

One sight at LUMS, a leading private university in Lahore, heartened me: how women were dressed. When I visited Malaysian campuses as a young man in the 1960s, few Malay Muslim women wore the hijab. Today, on the same campuses, almost all do. By contrast, at LUMS (which has the look and feel of Harvard Business School), only about 5 percent of female students wore the hijab, a remarkable expression of social freedom.

There has also been an explosion of free media in Pakistan. An astonishing number of Pakistani TV stations openly discuss the activities of Sharif and the other exiled former prime minister, Benazir Bhutto. Indeed, many elements of an open society are in place, including — as the world learned in March — an independent judiciary.

Myanmar, by contrast, broadcasts no information on Aung San Suu Kyi, and would never allow the reinstatement of a chief justice fired by its generals, as Pakistani President Pervez Musharraf did in March, let alone demonstrations in the streets in the chief justice's favor.

Of course, there is much silent resentment about the enormous political and economic space occupied by the Pakistan military, and a danger of a backlash if the military does not learn to share more space with civil society. I met many retired army generals occupying key posts. Fortunately, they seemed to have a temperament closer to Colin Powell's than to either Than Shwe or Maung Aye, the two closed military minds who have cut off Myanmar from the world.

America's decision to engage, rather than isolate, Pakistan has also helped. I have no doubt that closer American re-engagement helped to nudge Pakistan in the right direction. Many members of Pakistan's elite have been educated in American universities — another leading indicator of a country's orientation. Just imagine how different international relations would be if American leaders could visit Myanmar (or even Iran) with equal ease and have friendly discussions about agreements and disagreements.

Myanmar's generals deserve to be condemned for their brutal crackdown on civilian protesters and Buddhist monks. The Western world will rush to demand more sanctions and more isolation. But to what avail? Myanmar has effectively isolated itself for more than 50 years. What can even more isolation achieve?

A courageous Western leader might confront Myanmar's leaders with a threat that would really frighten them: deeper engagement. Myanmar's generals genuinely believe that they are protecting Myanmarese "purity" by shutting out the world. Imagine the impact if as many Myanmar generals visited America as Pakistani generals do.

A brave Myanmar intellectual, Thant Myint-U (grandson of former United Nations Secretary General U Thant) asks, "What outside pressure can bring about democratic change? And why, after nearly two decades of boycotts, aid cutoffs, trade bans, and diplomatic condemnation, are Myanmar's generals apparently more in charge than ever before?"

I was in Pakistan as a state guest. But my real mission was to connect with my ethnic Sindhi roots, as I had never visited the country where my parents were born. Only those who understand the pain of the partition of British India in 1947 will appreciate the powerful symbolism of a child of Hindu parents being welcomed back warmly to Muslim Pakistan. Those cultural ties helped me understand the Urdu and Sindhi being spoken, and also to feel the deep urge to modernize in the Pakistani soul — an urge that exists alongside the urge to connect with Pakistan's rich cultural past.

I left Pakistan feeling hopeful, because I saw the strong desire to join today's rising Asia. If a similar impulse could be implanted into Myanmar, both its people and the world would benefit.

Kishore Mahbubani is dean of the Lee Kuan Yew School of Public Policy, National University of Singapore.

http://search.japantimes.co.jp/cgi-bin/eo20071010a3.html

Mojojojo.

November 9th, 2008, 12:52 AM

^^ ahhhh reminds me of the golden age(2002-2006).

syedahsaninam

November 9th, 2008, 04:57 AM

I heard khanani & kalia company were raided and the police found a lot of black money out of them.....khanani & and kalia is going down

syedahsaninam

November 9th, 2008, 05:00 AM

Sunday, November 09, 2008
Confess to transferring billions of dollars abroad illegally; FIA arrests several others, seizes records in raids

By Salman Siddiqui

KARACHI: Munaf Kalia and Javed Khanani, two top officials of the Khanani and Kalia International (KKI), on Saturday confessed to having illegally transferred billions of dollars outside Pakistan for the last five years.

They were arrested on Friday night and were being interrogated by a team led by the Federal Investigation Agency.

Munaf Kalia surrendered late on Friday night after the FIA sent a message to him that if he did not surrender his family would be taken into custody.

Earlier, the agency conducted raids on places pointed out by his colleagues at the KKI. Javed Khanani was arrested in Lahore on Friday night.

The FIA, Lahore Crime Circle, had conducted raids for three days after it intercepted a telephonic conversation on Nov 5 about the illegal transfer of about 0.5 to one million dollars from Gujranwala.

The agency raided a KKI franchise called Dunya International Moneychangers in Gujranwala and seized $ 786,000 and four vouchers of Havala (an illegal way of transferring foreign currency), sources said.

The agency also detained franchise manager Rustam Ali Khan and accountant Tariq Mahmood and seized data about the illegal transfer of greenbacks.

During the interrogation, franchise officials told the FIA that they knew very little about the embezzlement of foreign currency and named Munaf Kalia and Javed Khanani as masterminds of the game.

The FIA-led interrogation team also seized computers and records from the KKI office located on the II Chundrigar Road, Karachi, the sources said.

Officials of the State Bank of Pakistan (SBP) and the government have been expressing apprehension for quite some time about involvement of some money changers in the smuggling of dollars.

Havala and Hundi are the two most popular channels of illegal transfer of foreign currency from one country to another.

The sources said Munaf Kalia and Javed Khanani had confessed that they were asked by various locals to transfer their foreign currency to their relatives and friends living abroad. This smuggling of foreign currency has resulted in a massive downward slide in the country’s forex reserves, which have depleted from over $ 16 billion in Oct 2007 and now stand at below $ 7 billion, the sources said.

As per reports, money exchangers have transferred around $ 10 billion for the last five years from the country. On an average, they were transferring about $ 10 million every day through the “Havala” and “Hundi” system.

They have also reportedly accepted that this smuggling had caused the slump in the shares business at local bourses. Since April 2008, the Karachi Stock Exchange has witnessed a 41 per cent fall in its chief 100-Index.

The sources said the interrogation team has also arrested eight officials of the Nadra, who are accused of issuing fake CNICs on which the illegal transfer of dollars was made. The officials were reportedly arrested from the Nadra offices in DHA, Awami Markaz, Lyari and Keamari in Karachi.

The investigators also detained Dawood, Abdul Wasay, Qasim Ibrahim and Walli Yar from the Yadgar Chowk, Peshawar on Saturday.

Moreover, the FIA also arrested four men at the Karachi Airport last evening, who were carrying dollars, pounds and travellers cheques of about one million dollars.

APP adds: Director Federal Investigation Agency (FIA) Mir Zubair Mehmood has assured the leaders of the Forex Association of Pakistan (FAP) that the agency will not harass innocent money changers.

He told a delegation of the FAP led by its Chairman Malik Bostan here at his office on Saturday that directors of the Khanani and Kalia International (KKI) were arrested after securing proper evidence of illegal transfer of foreign currency.

Other office-bearers of the FAP, including Haji Haroon and Mehboob Moti, were also present on the occasion.

Director FIA said action against the KKI was initiated when record of its franchise Duniya Exchange in Gujranwala showed illegal transactions of foreign currencies under “Hawala”.

“Investigations exposed several transactions of billions of rupees in the past by the Duniya Exchange through the KKI. This encouraged us to confiscate the IT record from the KKI head office in Karachi which provided evidences of all these transactions,” Mehmood said.

The FIA director told the FAP delegation that the State Bank had the authority to take action against illegal money changers as a license-issuing body and the FIA will hand over the arrested persons to the SBP for further legal action.

It may be noted that the SBP had warned money changers to refrain from illegal money transfers to avoid legal action.

Malik Bostan asked the FIA director to suggest his officials not to harass those money changers who were not involved in any illegal activity.

He said that the association will itself hand over such money changers to the FIA if any complaint was received against them.

Hoti said if the FIA harassed money changers they would close their businesses, depriving the country of remittances.

“FAP members collect $ 7 billion foreign exchange annually and give it to the government. If we are targeted and harassed, this money will not be received,” he added.

Talking to APP, Bostan said a similar crackdown was initiated in 1998 by the Nawaz Sharif government. But it was stopped on the request of the FAP and the dollar was brought down from Rs 67 to Rs 50.

He said an emergency meeting of the FAP had decided to hold a meeting with the director FIA to convince him to stop the crackdown against the money changers.

Zubair Azam adds from Lahore: The director FIA, Lahore has revealed that investigation of the case showed that Javed Khanani and Munaf Kalia shared equal responsibility in the illegal business.

Sources said that the FIA had found that accounts of illegal transactions were deleted on a daily basis from the computers and no record was kept. The FIA has dispatched the confiscated computers to the Special Investigation Group’s forensic lab to retrieve the deleted files.

The sources said Munaf Kalia would be brought to Lahore in two or three days for further questioning.

DG FIA Tariq Pervez, while talking to The News, confirmed the raids but declined to disclose any further details. He said it was the first day and investigations were under way. However, he said the Economic Crime Wing of the FIA had been tasked with the responsibility of collecting intelligence reports regarding activities of money changers.

November 9th, 2008, 06:48 AM

How is this part of "Economic progress" ?

:ohno:

siamu maharaj

November 9th, 2008, 07:27 AM

Screw these guys. Kill 'em along with their families.

Intoxication

November 10th, 2008, 03:33 AM

No-nonsense banker at helm of Pakistan's economy

KARACHI (Reuters) - Shaukat Tarin, Pakistan's top economic official, is known as a hard-headed straight-talker who loves a challenge.

Which is good because the veteran banker might just be up against his career's biggest -- steering Pakistan out of its most dire economic straits in years.

A balance of payments crisis has left the central bank with foreign reserves of $3.53 billion, less than September's import bill of $3.81 billion, and there is concern that without help, the country could default on a bond maturing early next year.

Analysts say it's almost inevitable the government will, however reluctantly, have to agree to an IMF programme.

Tarin was appointed the prime minister's top adviser on economic affairs last month, shortly after he turned 55. IMF negotiators are likely to find him a tough nut.

Tarin joined Citibank as a trainee in 1975, after graduating with a master's degree in business from Punjab University, Pakistan's oldest, where he majored in finance.

He rose to take charge of several banks and also served as chairman of the Karachi Stock Exchange before joining the government as de facto finance minister. He can't be appointed a cabinet minister as he is not a member of parliament.

Although Tarin has shunned politics throughout his career, Muneer Kamal, a colleague at Citibank, said he wasn't surprised to see his old friend join the government.

"Most people would run away from the sheer weight of responsibility but Shaukat's not that type," said Kamal. "If he feels it's a challenging job and he can do something positive, he won't be shy."

A stocky man with a mustache, Tarin once told the New York Times he was most proud of building up the business at Citibank, where he also worked in the Gulf and Thailand.

"Citibank was where I learned all about banking and my experiences there laid the foundations for my career," he told the newspaper in an interview.

At the request of the government, he took over as chairman and president of Pakistan's largest bank, Habib Bank, in 1997, turning it around from a $230 million loss in 1996 to a profit of $30 million in 1998.

He had similar success at Union Bank, which he took over in 2000, making it one of Pakistan's top banks in five years and preparing for its sale to Standard Chartered Bank.

Old colleagues speak of a no-nonsense style and attention to detail.

"He's a very aggressive person and he means what he says ... he's very blunt," said one banker who worked under Tarin at Saudi Pak Commercial Bank.

"He has a deep understanding of finance and with numbers he's excellent. It's almost as if he has a photographic memory," said the banker, who declined to be identified.

Despite the gruff manner, colleagues say Tarin has always been fiercely loyal to staff, and they to him, and has always been able to attract top talent to work with him.

Another old friend and colleague said Tarin's political masters would be wise to leave him alone to get on with the job.

"He has the ability and the capability to deliver provided he's given a free hand. Otherwise he'll simply get frustrated and resign one day ... He does not ever succumb to pressure."

Tarin was born in the eastern city of Multan, where his father, Jamshed Ahmed Tarin, was an army doctor. The elder Tarin has no fears for his son in the tough negotiations he faces.

"He's honest and an honest man is always a little braver. If you have some credibility then you can negotiate with anybody," he said.

An occasional golfer, Tarin is married with three children.

http://www.reuters.com/article/ousiv/idUSTRE4A80EK20081109?pageNumber=1&virtualBrandChannel=0#

RANA AAA

November 10th, 2008, 06:26 AM

Online

ISLAMABAD: Advisor to the Prime Minister on Textile Dr Mirza Ikhtiar Baig has said that the textile industry is playing a major contribution in the development of the national economy and government is planning many new measures to further improve the performance of textile industry to make it a vibrant and dynamic sector of the economy.

Addressing a big gathering of business community at Islamabad Chamber of Commerce and Industry during his visit to ICCI, Dr Mirza Ikhtiar Baig said there is a great potential to increase our textile exports to Turkey and Iran as Iran is buying Pakistani textile products (fabric) from Turkey due to concessional tariff.

He underscored that that Pakistan can reap rich benefits by directly supplying our textile products to Iran.

Advisor to Prime Minister on Textile said to support exports of textile products, R&D facility will be revived while establishment of internationally accredited testing laboratories including Okotex certification will be encouraged in major cities.

He said presently our textile products are sent to Hong Kong and other countries for testing to meet buyer's requirements while due to non-availability of Okotex certifying laboratory in Pakistan our fabrics are sent to UK and other European countries for Okotex certification which is a costly and time consuming process. He said the establishment of such testing facilities in Pakistan will prove more cost effective and beneficial for our textile industry leading to further increase in exports of textile products.

Elaborating upon his vision about textile sector, Dr Mirza Ikhtiar Baig said government plans to improve the supply chain of textile industry, ensure availability of clean raw cotton at competitive rates so that productivity of textile sector could be further enhanced.

He said government will take steps to add value by converting our raw material into value added textile products and to reduce cost of doing business by enhancing the productivity of human resources and their skill development.

He assured the business community that whatever government is able to squeeze in terms of providing relief to textile industry, in consideration of existing budgetary constraints, shall be passed on to this industry so that it could play a more effective role for the development of the country.

Before this, in his welcome address, President ICCI Muhammad Ijaz Abbasi thanked Dr Mirza Ikhtiar Baig for sparing some time for business community and highlighted the key role of textile industry in the national economy as it contributes more than 60 percent to the country's total exports.

He touched upon the major hurdles in the growth of textile sector like high interest rates, high energy cost, shortage of skilled labor, obsolete technology etc. and suggested that lowering of mark up rate, ensuring uninterrupted power supply, enhancing skills and providing latest training to labor force as well as upgrading technology of textile sector will greatly improve the productivity of textile industry and enhance its exports.

He assured the Advisor to Prime Minister on Textile that business community will extend full support to the government in solving their problems and in creating more business friendly environment for the growth of investment and economic activities in the country.

RANA AAA

November 10th, 2008, 06:27 AM

I coudnt found any thread realted to textiles sector of pakistan

Intoxication

November 12th, 2008, 08:22 PM

All set to achieve $22 billion export target: TDAP chief
RECORDER REPORT

KARACHI: Chief Executive, Trade Development Authority of Pakistan (TDAP) Syed Mohibullah Shah said on Tuesday that the country is all set to meet its export target of 22 billion dollars fixed for current fiscal year 2008-09.

Talking to Business Recorder on the second day of Expo Pakistan organised by TDAP in collaboration with Pegasus at Expo Centre Karachi, he said that Pakistan has done "breakthrough" in the export sector by arranging ever-biggest exhibition "Expo Pakistan" in the history of Pakistan. He said that all negative concepts about peace situation in the country and worst economy proved wrong.

He said, now Pakistan has proved the world that the country has excellent potential and open for the world business community. He said that it was now very easy not only to meet exports target of 22 billion dollars but hopefully it will exceed the target. "There were two reasons behind arranging this event, one was to undo the negative propaganda about law and order situation and secondly attracting the world business community that we have achieved by arranging the event successfully," he added.

Mohibullah Shah said that various countries were giving advises to their citizen especially to the businessmen to avoid visiting Pakistan, which after this event has proved wrong and in future these countries will hesitate in giving such advises. He said that international media is not sculpturing the proper picture of Pakistan, which is condemnable.

He said that over 500 delegates from 50 countries had visited the exhibition and most of them are serious buyers. He said that most of these delegates called on him and assured him of increasing and enhancing their business in Pakistan. He said these delegates expressed their satisfaction over peace situation and trade potential persisting in the country. "However, I admitted that security is tightened but it has perspective of international law and order situation, which on every passing day would be resolved and security arrangements would be softened for visitors," he added.

He said that although the exports are growing but sectors in which the exports are being done are very narrow and the country will have to broaden its trading field like agro-based industries, mechanical, minerals, sports, medicines and others.

Shah said TDAP also arranged tours of industrial zones in various cities like Lahore, Faisalabad, Multan, Islamabad etc, as well as in five industrial zones of Karachi for foreign delegations and give them more and broad exposure regarding business in Pakistan.

He said that it was the first time in Pakistan history that 100 percent stall capacity has been booked, while 40-50 companies could not get space in the exhibition. "I was told by some traders even by some chambers not to arrange the event due to law and order situation, but I took bold step and proved that Pakistan is not a war-zone," he said.

http://www.brecorder.com/index.php?id=827104&currPageNo=1&query=&search=&term=&supDate=

RANA AAA

November 15th, 2008, 12:18 AM

Intoxication

November 15th, 2008, 12:44 AM

Online

ISLAMABAD: Despite allocation of Rs 25.88 billion by the Ministry of Information Technology and Telecommunication Division for e-governance, Pakistan ranks 131 in the world with underdeveloped countries like Angola, Algeria, Kenya, Suriname, Namibia, Gabon, Antigua, Barbuda and Guyana ahead.

According to a report released by the United Nations titled "United Nations Survey 2008; from e-Governance to Connected Governance", e-governance was best tool to check transparency, accountability, efficiency and effectiveness of any government.

The report says that in E-Government Readiness for Southern Asia, Pakistan ranks 5th out of nine countries of SARAC, Maldives, Sri Lanka, Iran and India are ahead in these indicters and is ranked 131, while small countries of Africa and Latin America are ahead of a Pakistan like Libyan Arab Jamahiriya, Algeria, Kenya, Suriname, Tunisia, Swaziland, Namibia, and Angola, Turkmenistan, Gabon, Maldives, Antigua, Barbuda and Guyana.

While in Web Assessment 2008 Pakistan is ranked at 70, while underdeveloped Jordan, Angola and Mauritius are ahead in e-governance.

Interestingly in 'Head of State Websites that Encourage Citizen Engagement' Pakistan is ranked below Bangladesh, Bolivia, Burkina Faso, Dominican Republic, Egypt, Honduras, Indonesia, Palau, Papua New Guinea, Philippines, Saint Kitts and Viet Nam and many unknown African countries like Togo, Uganda, Nevis, Cameroon, Congo, Namibia, Niger and Nigeria.

The report indicates that in E-Participation Index, Pakistan is ranked 98 with Mauritania, Mauritius, Niger Swaziland, Angola and least develop country of Asia, Cambodia having better position in e-participation.

In the report it is stated that now world characterized by rapid change driven by globalization, the knowledge-based economy poses some challenges but also opportunities for the private sector and the public sector alike.

Using Information Communication Technology (ICT), Pakistan having 60 percent Tele-density, public sector organizations of any government can set new paradigm in formulating strategy, planning, consultation and implementation with 100% transparency.

In the report it is not only recognized but also urged member countries that e-government is for the benefits in order to reap from e-governance by providing better services, more choices, more personalization and greater accountability of how citizens' money is spent.

This report therefore looks at the issue of connected governance from the perspective of how governments manage and how they should manage their back office processes. Above all e-government helps in E-Decision-Making by taking into account the e-inputs of citizens into the decision-making process. The government informs its citizens on what decisions have been taken based on the consultation process.

In Pakistan, there is a recent example of an officer of Planning Commission who put all the information of two projects on a certified website worth Rs 6000 perhaps ensuring 100 percent transparency in spending the tax-payers' money while the commission had allocated Rs 360 million for the purpose of monitoring the projects.

Please provide a source because the heading of this article has been worded totally wrong. It should say that Pakistan is ranked 131st in the world in e-Governance Readiness. Not that Pakistan is the "131th underdeveloped country of the world". Here's one of the links: Pakistan 131st in e-Governance Readiness (http://www.unpan.org/Library/MajorPublications/UNEGovernmentSurvey/PublicEGovernanceSurveyintheNews/tabid/651/mctl/ArticleView/ModuleID/1555/articleId/17779/Pakistan-131st-in-eGovernance-Readiness.aspx?ListType=Aggregated).

So this is the wrong thread for this news article, it should be in the IT Industry thread, not the Economy thread.

On top of that, I don't think that countries like Algeria, Antigua & Barbuda, Jordan and Mauritius can be called "underdeveloped" or that countries like Uganda, Cameroon & Nigeria can be said to be "unknown African countries". Not to mention that this article is poorly worded and that this jerk of a journalist doesn't even know that St Kitts and Nevis is a country in the Carribean, NOT in Africa. And he termed it as just "Nevis". WTF!? This article tells more about this retarded journalist than anything else!!

Oh and I almost forgot, this guy doesn't even know that its "SAARC" not "SARAC" and that Iran is not a member of it, just an observer.

Mods please move this article to the IT Industry thread if you can.

Whiteeclipse

November 15th, 2008, 01:39 AM

Govt seeks $46billion for mega projects from Gulf countries

The government is likely to seek much-needed foreign exchange worth over $46 billion for infrastructure related mega projects including Diamer Bash dam and others from Gulf States, sources told Daily Times here on Tuesday.

President Asif Ali Zardari and other economic mangers of the country expect to hold meeting in Dubai with leaders of Dubai, Sharjah and other gulf countries on November 17, sources said. Pakistan leader would inform leaders of the oil-rich gulf countries about financial crises of the country. Pakistani leaders would try to plea Pakistani case regarding much required foreign exchange reserves for meeting international obligations of the country.

At the same time, sources said that Pakistan team would seek financial assistance for 31 mega projects, mostly related to the development of infrastructure sector of the country. Total cost of these 31 projects is more than $46 billion. Majority of these projects are related to water, power and other sectors.

The government is particularly seeking financial assistance for the construction of Diamer Bash dam, which is approved by the ECNEC on November 11. The dam would be built on Indus River and after completion it would have an annual 6.4 million acres feet surface water storage capacity, which would supplement irrigation supplies during low flow periods.

The project will also harness renewable source of clean and cheap energy through installed capacity of 4500MW and reduce dependence on thermal power, hence, saving foreign exchange. “The dam would pay back its cost in ten years,” the sources added.

Apart from Diamer Bhasha Dam Project, the sources said Pakistani leaders would also discuss other national importance projects. Some of these are: “New Khanki Barrage Construction Project worth Rs 20 billion”, “GEPCO, Gujranwala secondary transmission lines and grid station improving project worth Rs 5.173 billion”, “Rohri Hydro Power Project worth Rs 794.573 million”, “Kurram Tangi Dam WAPDA Mardan worth Rs 17.205 billion”, “Rehabilitation of Irrigation canals in Punjab Irrigation System worth Rs 6.260 billion”, “Rural road construction project Phase-II (JABIC) Rs 5.114 billion” and several other important projects.

http://www.yourprojectnews.com/govt+seeks+$46billion+for+mega+projects+from+gulf+countries_15555.html

Plasma.

November 15th, 2008, 03:19 AM

1.00 USD = 80.3300 PKR
United States Dollars Pakistan Rupees
1 USD = 80.3300 PKR 1 PKR = 0.0124486 USD

We should enter the guiness world book of records for this shit man. Unbelievable!

siamu maharaj

November 15th, 2008, 09:30 AM

1.00 USD = 80.3300 PKR
United States Dollars Pakistan Rupees
1 USD = 80.3300 PKR 1 PKR = 0.0124486 USD

We should enter the guiness world book of records for this shit man. Unbelievable!
For what?

slashcruise

November 15th, 2008, 01:43 PM

Pakistan Agrees to $7.6 Billion IMF Bailout Program

Nov. 15 (Bloomberg) -- Pakistan agreed to a $7.6 billion bailout loan plan with the International Monetary Fund, to help the south Asian country avert defaulting on its debt with the first such program in four years.

The loan ``will be used for the balance of payments and to build our foreign reserves,'' Shaukat Tarin, the finance adviser to the prime minister, said today at a televised news conference in Karachi. The IMF will give the loan in installments over 23 months at interest rate of 3.5 percent to 4.5 percent, he said.

Pakistan was forced to seek funds from the IMF after its foreign-exchange reserves shrank 75 percent in the past year to $3.5 billion last week, the equivalent of one month's imports, and a group of donor nations declined to provide funds.

``The IMF did not give us any condition different from our economic stabilization program,'' Tarin said. ``The IMF counseled us to increase the key interest rate to curb inflation,'' he said.

The State Bank of Pakistan, the nation's central bank, increased its benchmark interest rate by 2 percentage points, the most in more than a decade, to 15 percent on Nov. 12, citing inflation that reached a 30-year high in October.

Source:- http://www.bloomberg.com/apps/news?pid=20601087&sid=aC4jHaI6EZr8&refer=home

Plasma.

November 15th, 2008, 10:24 PM

For what?

Being the 6th biggest nation population wise and not being able to produce a person who can manage our economy. And going from 50 rupees to 80 in this short of a time.

November 15th, 2008, 10:52 PM

Being the 6th biggest nation population wise and not being able to produce a person who can manage our economy. And going from 50 rupees to 80 in this short of a time.

The record will be in not allowing such a person to handle our economy. Otherwise, there are lots of descent guys out there. Not just economics, choose any field and there are at least a few such guys who are really genius in their respective fields.

November 16th, 2008, 04:37 AM

KARACHI: Adviser to Prime Minister on Finance Shaukat Tareen on Saturday announced that the International Monetary Fund (IMF) has okayed a financial package for Pakistan with no conditions but adjustments to the interest rate to check high inflation.

"It is for 23 months or seven quarters. The minimum amount is five times of our quota that comes to $7.6billion. The interest rate on the facility will vary from 3.51 percent to 4.51 percent with some changes as per market conditions," the adviser told a press conference here at the headquarters of State Bank of Pakistan (SBP). This facility will also give confidence not only to the markets and our investors, but also to other International Financial Institutions (IFls) and Friends of Pakistan. "Thus we believe that we can see commencement of a steady stream of inflows from now on," he said.

Defending the government's move, Tareen said unlike the past arrangements reached with IMF, the present would prove successful and very much in the interest of the country because there is no dictation, or the IMF designed economic plan behind this financial agreement.

"It is our own programme based on our annual budget targets," he asserted, adding that with endorsement of the economic programme by IMF, the 'Friends of Pakistan' countries and other trading partners would feel secure to extend significant financial support to Pakistan. "Such indications are already there," he said, adding the government now would engage in negotiations with these countries. "I am scheduled to meet with the finance minister of Saudi Arabia soon in pursuance of King of Saudi Arabia's assurance that the kingdom would extend financial support to Pakistan," he added.

Shaukat Tareen said the first tranche from IMF was expected before the end of this month.

Continue with the story.. (http://thepost.com.pk/Fb_ShortNewsT.aspx?fbshortid=3575&fcatid=14&fstatus=Current&bcatid=14&bstatus=Current)

sameerl

November 16th, 2008, 06:30 AM

A loan on the above interest rate mentioned is not a bad deal; the interest burden is not too onerous; the problem lies in the other conditions that have not yet been released publicly; interest rates being increased was part of the prescription (in an environment where the global economic system is reducing interest rates in a response to ease the credit burden, pakistan has been prescribed to move the other way). Other measures will likely include further tax burdens and aggressive domestic debt repayments. Expect further slowdown in growth (likely negative)

November 17th, 2008, 01:31 AM

ISLAMABAD (November 17 2008): Pakistan will have to withdraw subsidies across the board by the end of the current fiscal year and bar the State Bank of Pakistan (SBP) from intervening in the forex market. These are two major conditionalities the International Monetary Fund (IMF) has placed on Pakistan under its rescue package.

The subsidies in power, gas and petroleum products will be eliminated by the end of this fiscal year, sources told Business Recorder. This is one of the two major conditions put by the IMF prior to approval of loans amounting to $ 7.6 billion as rescue package, sources added. This condition would be much harder if it was applied to agricultural inputs as presently the government provides a subsidy of Rs 32 billion on fertilisers.

The government has not made the IMF conditions public so far. But insiders are of the view that some of the conditions are very harsh and the government will have to burden the people, especially the poor, for meeting the Fund's demands.

The IMF is of the view that Pakistan would have to increase the tax-to-GDP ratio to 15 percent by 2013. This issue, according to sources, is also considered to be harsh in the sense that the government would have to increase indirect taxes, instead of direct taxes. The indirect taxes will, again, hit the people. As a result, the ratio of general sales tax may have to be increased.

However, sources did not say whether the tax-to-GDP ratio would be taken to 15 percent by increasing indirect taxes. They were of the view that the government could improve the tax net by bringing more people under direct taxes.

According to sources, the IMF is also keen that banks' profits should be linked with the inflation rate prevalent in the country. Besides these conditions, the IMF has also asked Pakistan to keep getting loans from SBP, within certain limits. They said that IMF wanted Pakistan not to get loans from the SBP till the conclusion of the IMF programme. However, the government successfully told the IMF that SBP credit could be kept within certain limits, and full ban on the facility would be very hard to meet.

Pakistan has also been asked to bring fiscal deficit to 4.3 percent of the GDP within the current fiscal year. Government circles claim tat these conditionalites are not harsh, and most of them have already been included in the current year's budget. In order to slash its deficits, current account and trade will have to be bridged by withdrawing all subsidies, sources said.

http://brecorder.com/index.php?id=838926&currPageNo=1&query=&search=&term=&supDate=

brightside.

November 17th, 2008, 04:59 AM

It must be done. In theory all the IMF conditions should eventually lead to real, sustainable economic growth, but our problem is that the money saved on subsidies will go towards filling the pockets of the politicians, instead of being spent on education and health.

sameerl

November 17th, 2008, 05:44 AM

The problem with some of the conditions mentioned above is that they are contradictory in the short to medium term. Eliminating subsidies on oil and gas (not agriculture; again a glaring loophole that reeks of corruption) will serve to increase inflation; not being allowed to intervene in forex markets will automatically lead to further erosion of the rupee in the medium term, further exacerbating inflation; econometric models indoicate anyways between a 15-30% increase in the cost of imports and general expenditure. Given these pressures, it is inconceivable to reduce the deficit to 4.3% of GDP in this fiscal year without drastically reducing infrastructure projects and letting go of thousands of jobs.

brightside.

November 17th, 2008, 05:52 AM

IMF to mount pressure for agriculture tax: Pakistan’s package review on Friday (http://www.dawn.com/2008/11/17/top1.htm)
By Anwar Iqbal

WASHINGTON, Nov 16: The International Monetary Fund has asked the government of Pakistan to introduce agriculture tax if it is serious about increasing the country’s revenue, diplomatic sources told Dawn.

The fund’s executive board will meet in Washington on Friday to review an economic programme for Pakistan, which includes a $7.6 billion loan to meet the country’s serious balance of payments difficulties.

Pakistan is expected to start receiving the money from the end of this month. The IMF will deliver $4 billion in 45 days while the rest will be disbursed in 2009.

The fund required Islamabad to undertake a set of prior actions, including a 2 per cent increase in interest rates which was announced last week. This is the highest increase in more than a decade.

But diplomatic sources in Washington told Dawn that the IMF expected Pakistan to do more. One of the key elements of these measures is a proposed tax on agricultural products, which the IMF says has become unavoidable.

During a visit to Washington last month, Prime Minister’s Economic Adviser Shaukat Tarin promised to bring all sectors, including agriculture, under the tax net to strengthen the national economy.

A financial analyst noted that Pakistan had promised levying agriculture tax in the past as well but somehow wriggled out of its promises. “But the fund has now warned Pakistan that there’s no escape from it,” said the analyst. ‘If Pakistanis once again fail to impose agriculture tax, this will be the last IMF programme they will have.”

The fund expects Pakistan to introduce other taxes as well and hopes that Islamabad will soon make new laws to achieve this target. The IMF also expects the government to levy new taxes on real estate appreciation, stock market profits and capital gains.

If the proposals are implemented, the new taxes will become effective next year.

The fund has also suggested a drastic reduction in the government spending and has proposed a performance criterion to increase revenue collection to a certain point.

Pakistan and the IMF are expected to determine the precise amount of the proposed increase later this week.

Opposition parties in Pakistan have already started criticising the government for seeking the fund’s assistance. Even though details of the IMF’s conditions have not yet been published, the critics say the fund always imposes harsh restrictions that impede economic growth.

But IMF officials describe such suspicions as unfounded, saying that the Pakistan aid package will not impede development and will not hurt the poor.

An IMF statement issued in Washington on Saturday said the Pakistan programme had two main objectives: restoring the confidence of domestic and external investors by addressing macroeconomic imbalances through a tightening of fiscal and monetary policies; and protecting the poor and preserving social stability through a well-targeted and adequately funded social safety net.

Some analysts in Washington, however, feel that if public pressure increased, Pakistan may wriggle out of the IMF programme after receiving the first few instalments it needs to meet its balance of payment requirements.

“If this happens, it will badly hurt the country’s image and the fund will not trust Pakistan again,” said an analyst.

The analysts noted that while allies like the United States and Saudi Arabia played a positive role in getting the IMF package for Pakistan, they were still unwilling to provide bilateral assistance to the country. This, the analysts argue, limits Pakistan’s options and may force it to stay with the IMF.

The analysts warned not to expect much from the Friends of Pakistan group which meets in the UAE on Monday.

“The Friends of Pakistan club does not seem to have much cash available,” said a diplomatic source aware of the negotiations between Pakistan and other members of the group. “They may fail to offer any substantial help to Islamabad.”

Agriculture must be taxed.

brightside.

November 17th, 2008, 06:05 AM

S&P cuts Pakistan’s ratings (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/s+and+p-cuts-pakistans-ratings-bi)

HONG KONG: Standard & Poor’s cut its sovereign ratings on Pakistan further into ‘junk’ territory on Friday, highlighting the country’s difficulty in raising the money that it badly needs to avoid defaulting on its debt obligations.

It marks S&P’s second downgrade of Pakistan’s ratings in as many months.

Friday’s downgrade comes even after the country’s top economic adviser said late on Thursday it expected the International Monetary Fund (IMF) and other lenders to provide billions of dollars in loans soon and China to pitch in with $500 million.

To debt investors Pakistan’s most pressing obligation are $500 million in bonds maturing in February. The risk of default on that and other obligations have sent the cost of insurance in Pakistani debt soaring this year.

‘The downgrade reflects our view that ongoing delay by Pakistan in securing external assistance has further increased the prospect of near-term debt service difficulties, heralding either a rescheduling of commercial external debt or an outright payment default,’ said S&P credit analyst Argots Bernard.

S&P cut its long-term foreign currency rating on Pakistan to CCC from CCC-plus and its long-term local currency rating to CCC-plus from B-minus, putting both further into ‘junk’ territory. The agency placed its outlook on the country as ‘developing.’ The action places Sap’s long-term foreign currency rating two notches below ratings from Moody’s Investors Service, which in late October downgraded the country by one notch to B3.

Pakistani officials had previously said it needs to raise $3.5 billion to $4.5 billion to fill a financing gap, and an additional $10 billion to $15 billion to avoid a balance of payment crisis.

In a sign of Pakistan’s dire situation, the country had as of Oct 25 only $6.92 billion in foreign currency reserves, of which the central bank held $3.71 billion, not enough to cover September’s imports totalling $3.807 billion.
Economists say Pakistan is shedding reserves at a rate of about $1 billion a month.

In a toughly worded statement, the credit ratings agency cast doubt about whether Pakistan would be able to raise the money.

Even if the country was given the needed loans, it could spark popular discontent and political instability would make it hard to implement the policies needed to stabilise the economy, S&P said.

‘Both the ruling PPP and opposition parties appear unwilling to undertake the necessary fiscal correction to make an external adjustment credible,’ Bernard also said in the statement.

Pakistani President Asia Ali Zadora’s Pakistan People’s Party (PPP) has been tussling with the opposition led by political rival Nawaz Shari’s Pakistan Muslim League.

Pakistan’s credit defaults swaps (CDS) barely reacted to Sap’s move given few investors are willing to trade the contract.

The CDS were still quoted at more than 50 per cent upfront, a trader said. That means an investor seeking protection against a default in Pakistan’s debt would need to pay up to $5 million to the insurer before even signing the contract for every $10 million of principal that has to be insured.

opinion786

November 17th, 2008, 01:38 PM

IMF's deal will do NOTHING for the economy!

IMF's package means, $7.6 billion over a period of TWO years till 2010. And, we have to re-pay starting from 2011.

Our current reserves are $7 billion. Even if we inject AT ONCE the total $7.6 billion IMF aid into our current reserves, it makes a total of $14.6 billion. When PPP took over the Foreign Reserves were $14 billion and what did PPP do with those $14 billion?

Nothing then and nothing now! This is just another soothing pill for the masoom public!

This looks like another 'loot & run off' by 2011 by this current regime of King Zardari!

opinion786

November 17th, 2008, 01:41 PM

Foreign Reserves Phenomenon: Shaukat Aziz versus PPP (http://presidentmusharraf.wordpress.com/2008/08/21/foreign-reserves-phenomenon-shaukat-aziz-versus-ppp/)

Written By: Afreen Baig

Foreign Reserves – a significant economic indicator and of vital importance to every expanding economy. Foreign Reserves is the first and basic economic indicator that transmits an air of confidence and trust, amongst the potential foreign & local investors and the nation. Foreign Reserves are held in abundance and accumulated - in order to sustain the confidence of a country’s capacity to carry out external trade confidently, to balance the momentum between demand & supply of foreign currencies, and also used as an intervention tool by the State Bank. Reserves also bail out the economy in times of financial crisis.

By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. His exceptional policies kept our trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.

Pakistan recently has seen a drastic drop in its Reserves by 50% and its currency devalued by 40%, which has left ordinary people confused and the usual cynics have started heaping the blame onto the policies of Mr. Shaukat Aziz, without even knowing the basic macro-economic indicators nor understanding the relationship b/w Foreign reserves, Trade deficit and Currency devaluation.

The Trade deficit (Exports minus Imports) is always managed in ratio to Revenue generation, Capital inflows and Reserves. Almost all developing economies face the dread of trade deficit but their abundant foreign reserves gives them the fiscal space to overcome those grievances.
Illustrating in mathematics for ordinary readers, on October 2007, when PM Shaukat Aziz left us:
Exports - $18 billion

Imports - $30.53 billion

Trade deficit - $12.53 billion

Foreign Reserves - $16.4 billion

What is to be seen above is that, Pakistan’s Foreign Reserves $16.4 bn exceeded the trade deficit $12.53 bn by a comfortable $3.87 billion and with an additional foreign investment of $8.4 billion – Pakistan’s currency stayed stable at Rs.61 per dollar.

Currency starts to devalue ONLY when the Trade deficit surpasses the Foreign Reserves. This rare phenomenon occurred in PPP’s incompetent & dense minded government, which has led to devaluation of the currency by 40%. They failed to protect our Sovereignty - our Foreign Reserves!

In PPP’s inept government of eight months,

Trade deficit - $20.74 billion

Foreign reserves - $8 billion

Under PPP, the Reserves fell from $14 billion to $8 billion and the trade deficit increased from $12.53 billion to $20.74 billion.

The moment the foreign reserves ($8 bn) fell below the trade deficit ($20.74 bn), the currency starts to devalue. Under Mr. Shaukat Aziz, Rupee stayed stable till October 2007, because our Reserves $16.4 billion EXCEEDED our Trade deficit of $12.53 billion.

In 2007, when international oil prices reached an alarming level of $140 per barrel it hurt the Imports bill of many developing countries, by increasing the trade deficit. The experienced Mr. Shaukat Aziz gauged this situation and immediately started monitoring & controlling individual sectors that were importing. He allowed imports only in sectors that were export specific. His efforts resulted in decreasing our Import bill by 6.53% by September 2007 (one month before he left).

Rupee stayed stable throughout Mr. Musharraf’s supported governments. Trade deficit never exceeded the foreign reserves in the last eight years. The results were as follows – a stable rupee:

2001-02: Rs. 61
2002-03: Rs. 57.7
2003-04: Rs. 57.92
2004-05: Rs. 59.66
2005-06: Rs. 60.16
2006-07: Rs. 60.5
2007 (Dec): Rs. 61

What did the inefficient PPP do in these last eight months? They failed to monitor each sector of imports to control them individually. Pakistan’s economy started destabilizing because PPP could not guard our $14 billion reserves. Nor did they utilize any effort to increase the reserves from where Mr. Shaukat Aziz left it at $16.4 billion! The easier way out for them is to beg around the world barefaced or go back to IMF disgracefully.

What did the PPP further do? They increased the import bill by 55% in the months April to June 2008 and again increased it by 52.65% in the months July to September 2008 – though world oil prices fell from $140 per barrel to $70 per barrel.

Flight of capital takes place ONLY in economies where there is lack of trust and faith! Investors and endowing Public do not trust the government of PPP and are wary of PPP’s earlier corrupt reputation.

In the first four months of PPP, around $22 billion were withdrawn from the economy and KSE’s market capitalization fell by $29 billion. The State Bank was forced to place ban on transfer of dollar outside Pakistan.

Foreign reserves get hurt twice in this depletion process. First, when the investors and public pull back their money. Second, when macro-economic indicators witness imbalance and the government is forced to pay their external liabilities through these Reserves. This second stage occurs only when the government loses other means of regular income and is unable to control their imports.

Every country in the world is forced to make Imports. Imports help boost Exports. Even the world exporter China makes an import worth around $954 billion, to further promote their exports. But, Imports should be Export specific – scrutinized and restrained monthly – which was being done under the policies implemented by Mr. Shaukat Aziz.

Let’s analyze the steady India, as an example, with GDP growth of 9%.

Indian Imports - $188 billion (compared to Pakistan’s imports of $40 billion)

Indian Trade deficit - $63 billion (compared to Pakistan’s deficit of $20 billion)

The Indian currency is not devaluing because their Foreign Reserves $308 billion exceed their trade deficit of $63 billion.

Had Mr. Shaukat Aziz continued, the Trade deficit would have been kept controlled in accordance with Pakistan’s Revenue generation, Capital inflows and Foreign Reserves – which would have kept our rupee stable and economy booming at 7% GDP growth.

If Pakistan wishes to remain free from influence of IMF, there is no better option than to assert our economic sovereignty and accumulate Foreign Reserves, which in return will keep our currency stable. Regrettably, PPP lacks the credibility and the reliability to attract back that trust and confidence!

Afreen Baig is an independent analyst majoring in International Relations and Economics. She can be reached at afreenbaig@gmail.com

Intoxication

November 23rd, 2008, 09:22 AM

Pakistan's Rupee Strengthens for a Fifth Week Against Dollar
By Farhan Sharif

Nov. 21 (Bloomberg) -- Pakistan's rupee posted a fifth weekly gain, its best winning streak in a year, after the government said it expects to receive the first installment of an International Monetary Fund bailout this weekend. Bonds fell.

The currency closed at a six-week high after the government said it expects a minimum $3.2 billion of a $7.6 billion IMF loan to be transferred to the central bank as soon as the fund's executive board approves the payment. The rupee tumbled as much as 26 percent this year, reaching a record low last month as concern mounted the government would default on its overseas debt obligations.

``The main reason behind the fall in dollar demand is the anticipation of long-awaited default-avoiding funds coming in from the IMF,'' said Imran Khan, head of research at First Capital Equities Ltd. in Karachi. ``The government's clear policy announcements also helped curb speculative activities in the currency market.''

The currency rose 1.3 percent this week to 79.29 per dollar as of 4:50 p.m. in Karachi, according to data compiled by Bloomberg. It reached 79.15 on Nov. 19, the highest since Oct. 10, after strengthening from a record-low 83.55 on Oct. 17.

Pakistan is counting on the IMF bailout to help build up its foreign-exchange reserves, which shrank 75 percent in a year to $3.5 billion, and to attract investment that will boost an economy predicted to grow at the slowest pace in seven years.

The yield on the benchmark 9.6 percent bond due August 2017 rose 0.1 percentage point to 15 percent. Bond yields move inversely to prices.

http://www.bloomberg.com/apps/news?pid=20601091&sid=aeIZvABTNIC8&refer=india

Intoxication

November 23rd, 2008, 10:03 AM

Textile sector is backbone of Pakistan’s economy :ohno:

We need to move on from these low value, high bulk goods to high value, low bulk goods. Enough of this Textiles crap!! :ohno:

------------------------------------------------------------------------------------------------------------------------------------

Muhammad Omer Ijaz

The textile sector is one of the most important sectors of Pakistan. It contributes significantly to the country's GDP, exports as well as employment. It is, in fact, the backbone of the Pakistani economy.

The contribution of this industry to the total GDP is 8.5 percent. It provides employment to 38 percent of the work force in the country, which amounts to a figure of 15 million.

However, the proportion of skilled labour is very less as compared to that of unskilled labour. According to recent figures, the Pakistan textile industry contributes more than 66 percent to the country's total exports, which amounts to around 5.2 billion US dollars. The industry contributes around 46 percent to the total output produced in the country. In Asia, Pakistan is the 8th largest exporter of textile products. The proposed New Textile Policy (NTP) of Pakistan will help in increasing the output of textile products, improve global competitiveness and generate employment in the industry.

The new policy targets a 40 percent increase in exports and meet the growing domestic demand. It will help create 3.5 million new jobs. The first important step is to increase domestic cotton production which puts Pakistan in an advantageous position because of its reasonable price.

Other measures include improvement in value addition, increase in the number and variety of value-added products, enhancement of productivity of manpower, stepping up efficiency of its existing plants and equipment, and extensive use of the imported machinery.

Five new model garment factories will be established. A textile park will be set up to serve as a special economic zone for tax free production and export. A weaving city will be established. Other highlights include formation of Pakistan Textile Research and Compliance Organization, audit for processing industry for an efficient and economic use of costly chemicals, setting of a state-of-art textile laboratory at National Textile University Faisalabad, horizontal and vertical integration to balance textile value chain, a specialized garment training institute for women, one-window facility for providing required infrastructure and standardization of machinery and equipment.

The financing facilities include subsidized credit and refinance facilities provided by SPB through the commercial banks, Export Finance Facility (EFF) for textiles.

The SBP has allowed swapping of costly long term bank credit, obtained previously by the industry, with cheaper Long Term Finance for Export Oriented Projects (LTF-EOP) for machinery and equipment.

The industry is now allowed to undertake External Commercial Borrowing (ECB) for plants and machinery, Pakistan plans to raise its overall exports to $ 40-45 billion by 2013, by expanding industrial, agricultural and services sectors, including textiles. "The government is focusing on skill development, and on reducing the cost of doing business to achieve this export target, the Prime Minister said. The Prime Minister said that it is important to build brands, working on the existing strengths and create competitive advantage internationally."

The proposed policy envisages building a new culture, which would expedite the process of improvement in all the segments of the textile sector.

The skills gap in all the entities of the textile sector as well as the concerned government organizations have to be filled by professionals to cope with the challenges and the changing environments of international marketing.

The proposed Textile Industry Development Policy is expected to offer four tax incentives to attract foreign direct investment (FDl) in upcoming textile and garment cities in Karachi, Lahore and Faisalabad. Ministry has proposed that all import of textile machinery and raw material should be duty-free to facilitate import of the latest textile machinery, which would prove to be a big incentive for the textile sector to enhance its production capacity.

At present, tax authorities are charging a minimum of five percent custom duty on the import of machinery. The proposed incentives include a general sales tax exemption on utilities to those investing in upcoming textile and garment cities. The government has already allowed general sales tax at zero rating on electricity and gas consumed in the production process of the textile sector. Pakistan textile industry contributes 66 percent to the country's export, 40 percent to employment and 8.5 percent of GDP. The exports of textile products have increased by 5.27 percent at 510 757 billion in 2006-07. The government has fixed a growth target of 12 percent for textile exports for the current fiscal year 2007-08.

http://thepost.com.pk/BizNewsT.aspx?dtlid=193399&catid=7

November 25th, 2008, 12:43 AM

ISLAMABAD: International Monetary Fund (IMF) on Monday approved $7.6 billion bailout package for Pakistan, a private TV channel reported.

Pakistan is likely to get between $3.5 billion and $4 billion initially while the rest will be distributed in six equal instalments.

The money is likely to be transferred to the State Bank of Pakistan's account in the US Federal Reserve in New York.

The disbursement takes 48 to 72 hours, which means that Pakistan will have the money by Thursday.

http://thepost.com.pk/MainNewsT.aspx?bdtl_id=13613&fb_id=2&catid=14

sameerl

November 25th, 2008, 06:27 AM

We have succeeded again in becoming indentured servants

siamu maharaj

November 25th, 2008, 02:15 PM

What's so funny is that our prime minister actually said that we are lucky to be back with IMF. I mean, when you think it can't get worse, you hear such jewels.

November 25th, 2008, 02:46 PM

Red aRRow

November 25th, 2008, 03:23 PM

What's so funny is that our prime minister actually said that we are lucky to be back with IMF. I mean, when you think it can't get worse, you hear such jewels.

I usually put the TV to mute when he shows up blabbing.

-SchizoPhrenic

November 27th, 2008, 09:37 AM

What's so funny is that our prime minister actually said that we are lucky to be back with IMF. I mean, when you think it can't get worse, you hear such jewels.

What else do u expect from a not-ever-been-school-paindo-retarded kid.?Arrrggg how can somebody listen to sound of his paindoo jahilana f###ed up voice..His accent of urdu makes me puke..:bash:

sameerl

December 1st, 2008, 06:28 AM

Now that the IMF package is signed off on, for thos academics still interested in knowing what a possible alternative for the government could have been, here is a possible route that could have been taken:

1) The state bank could have reduced interest rates; simaltenously, it could have expanded its balance sheet (read print more money) by directly lending to corporate industrial houses, and suspend repayments on instalments by a period of 3-6 months. It could also have created a separate portfolio of "bad assets" that it could have bought off at book value from the banks, thereby giving them a surfeit of liquidity. It could have held on to these assets, eventually selling them off in a few months (likely at a substantial loss, which would have ultimately be funded for by the taxpayers). Whilst the above would have been inflationary, in the short to medium term, it oculd have been partially offset by:

2) Reduction in fuel prices, reflecting international trends (to their credit, the government has already done this). No increase in power tariffs for another year (again funded by tax payers)

3) Reduction in the rate of some direct taxes, (notably corporate taxes, to stimulate spending)

Whilst these measures would ave been condemned by international donor agencies, and would cost taxpayers a substantial amount n the form of higher debt servicing, the imf prescription is leading to higher costs anyways, but at the cost of independence, lower growth and severe resource constraints. The ironical part is that eventually, the government will resort to some of the measures above anyways, but it will likely come just before the next elections.

siamu maharaj

December 1st, 2008, 07:22 AM

Petrol prices have gone down by Rs. 9 today! If I'm not wrong diesel is now more expensive than petrol, whereas it used to be half the price about 10 or so years back.

spyk

December 1st, 2008, 10:08 AM

spyk

December 1st, 2008, 10:14 AM

Petrol prices have gone down by Rs. 9 today! If I'm not wrong diesel is now more expensive than petrol, whereas it used to be half the price about 10 or so years back.

This might be completely unrelated, but, how is CAPITALISM to blame for all this? ("Capitalism is dead")

It was actually GOVT. ACTION (not capitalism) that lead to this mess. The govts. made cheap credit widely available and low interest rates for prolonged period. It was govts/central banks that printed money like there was no tomorrow. Whenever the markets were correcting any excesses/bubbles (CAPITALISM), the govts/central banks intervened and prevented the corrections from taking place, and, eventually postponed the day of reckoning, and, now it has finally come, and, all the corrections that werent allowed to take place before will happen now and more. When the tech/dotcom bubble burst the govts/central banks rushed in to save everyone, when long term capital management failed, the govts/central banks rushed in, when the 9/11 attacks took place, the govts/central banks lowered interest rates and kept them too low for too long. The govt. sponsored (and encouraged) enterprises, Fannie Mae and Freddie Mac are the architects of the mortagege mess. The govts. encouraged that kind of behaviour, it was the "American dream"; everybody must own a house (or four, regardless of whether they could afford them or not). When the Yen based carry trade was unwinding/reversing before, the Japanese central bank and their finance ministry intervened to stop the appreciation of the yen. Alan Greenspan is to blame, Bill Clinton and his administration is to blame, George Bush and his administration is to blame.

So how is CAPITALISM to blame for all this?

sameerl

December 1st, 2008, 02:30 PM

secularpakistan:

our problems are two pronged. In the domestic arena, the expansion of balance sheets by governement institutions would have (and will still) help doemstic banks give credit to domestic industry and service institutions. On the international level, there are 2 levels:

1) Repayment of eurobonds contain provisions whereby international debt can be paid off in rupees. why not? In the current environment, Iceland paid off its international debt using its domestic currency. So there is a precedent, even in recent times.

2) DOLLARS needed for import transcations splits into two parts: capital intensive and consumer based. On the former, you seek extension of terms of repayments, against receivables that you pledge in domestic currency (currency swap transcations again commonly done in a lot of countries over the last ten years argentina).
I actually agree that a correction has been lo overdue. however what is different this time is that the plumbing system of the economy (banks) are broken this time around. If you look at corporations, what they are doing in the us, europe and asia, is that they are all extending payments and deferring expenditutres. This is exactly what was needed for pakistan at teh marcro level,not a slavish increase in interest rates, merely to get access to short term DOLLARS which was no solution at all

brightside.

December 1st, 2008, 02:58 PM

Petrol prices have gone down by Rs. 9 today! If I'm not wrong diesel is now more expensive than petrol, whereas it used to be half the price about 10 or so years back.

The greedy evil OPEC countries are panicking and cutting oil production yet again :)

spyk

December 1st, 2008, 07:34 PM

December 3rd, 2008, 02:24 AM

Islamabad: Pakistan expects $ 50 billion foreign investment in the next four-five years, officials said.

"The government has calculated things and we expect at least $ 50 billion foreign investment in the next 4-5 years. We may even cross the mark", a senior government official told The Post.

He said, "The recent economic crises and the wave of terrorism together with the Pak-India tension has pushed the investors a bit back but they will return".

At this time, he said, Pakistan offers the best opportunities to the investors. "We are offering good opportunities because we need a big boost to our economy.

We don't want the economic crises to ever revisit Pakistan", the official said.

Foreign investment continues to perform impressively during the current fiscal year (2008-09) and is successfully maintaining the strong showing of last year. The country attracted $ 5.1 billion during 2007-08.

The total foreign investment amounted to $ 938.2 million in July- September, 2008 against $ 1038.6 million in the corresponding period of last year thus showing a decline of 100.4%, according to the State bank of Pakistan (SBP) figures.

The foreign direct investment (FDI) amounted to $ 1110.9 million during July-September 2008 as against $ 1014.5 in the same period last year showing a marginal increase of 9.5%.

At the backdrop of extreme political instability and heightened security concern, Pakistan succeeded in attracting $ 5.15 billion FDI in FY08 - almost $ 13.2 million more than last year.

Approximately $ 1271.7 million FDI has been transacted in June 2008 alone. However, total portfolio investment registered an outflow of $ 170.5 million (July-September, 2008) as against an inflow of $ 55.6 million during July-September of fiscal year 2007-08 - a decline of over $ 226 million.

Communications along with financial businesses have been the major attraction for foreign investors in Pakistan, accounting for 32.9 percent and 22.7 percent respectively, followed by energy sector (oil and gas, petroleum refining and power) (17.6 percent), trade (3.8 percent), cement (2.5 percent), personal services and transport equipment (automobiles) 2.2 percent each.

If not for the next paragraph , I would have thought this guy doesn't have the faintest idea of how to calculate percentages.

Any economist here can tell how the FDI figure is greater than total foreign investments?

http://thepost.com.pk/MainNewsT.aspx?bdtl_id=13716&fb_id=2&catid=14

brightside.

December 3rd, 2008, 11:07 AM

^^ Boggles the mind, how our journalists write down complete nonsense.

December 4th, 2008, 12:55 AM

ISLAMABAD: The government will have to increase average base power tariff within months as per the schedule to be agreed with World Bank by end of December to eliminate electricity tariff differential subsidies by June 30, 2009.

It was revealed in the Letter of Intent, Memorandum on Economic and Financial Policies (MEFP) and Technical Memorandum of Understanding (TMU) agreed with International Monetary Fund for 23-month $7.6 billion bailout program.

The program will be subject to quarterly reviews and quarterly performance criteria as set out in TMU.

Completion of the first two reviews scheduled for end-March 2009 and end-June 2009 will require observance of the quantitative performance criteria for end-December 2008 and end-March 2009

The government has implemented increase in power tariff by 18 percent from September 5, 2008 to this effect. However, authorities concerned are in agreement with the Fund to further increase tariff to waive electricity tariff differential subsidies by end of on going fiscal.

During 2008-09, the government has fixed tariff differential subsidy of Rs77 billion {Rs65 billion for Ex-Wapda power distribution companies, Rs12 billion for KESC}. In next fiscal, under the agreement with the Fund, government will extend zero subsidies in power sector.

This means that power tariff will gradually sky rocket in the remaining months till June 30, 2009 and after that.

The implementation of the electricity tariff increases will be followed up in the context of the program reviews. On the revenue side, further steps will be taken during the remainder of the fiscal year to strengthen tax enforcement. Moreover, fuel prices will continue to be adjusted to pass through changes in international prices.

The agreement posted by The Washington based lender in its websites also divulges Central Bank of Pakistan will raise discount rates more if the actual reserves for end-November and end-December 2008 fall short of the program monthly floors on the SBP’s net foreign assets.

A further increase in the discount rate will be considered at the time of the monetary policy statement scheduled for end-January 2009.

In close collaboration with the World Bank, the government will develop a strategy and a time-bound action plan, by end-March 2009, for the adoption of specific measures to strengthen the social safety net and improve targeting to the poor.

The government will prepare a plan for eliminating the inter-corporate circular debt by end-March 2009. The transition to a single treasury account will be completed by end-June 2009.

The legal provisions relating to the operational independence of the SBP will be reviewed. These provisions will be strengthened based on the recommendations of an interagency committee that will be established by mid-November 2008, and taking into account technical recommendations from the IMF. The second program review will focus on specific details regarding required legislative changes in this area.

However, the agreement mentions no cut on defense expenditures and levy of income tax on agriculture sector meaning. It means that the government will not be bound to bring agriculture sector under the tax net to achieve the revised revenue target up to Rs1.360 trillion set for ongoing fiscal.

Under the agreement, the central bank SBP is committed to pursuing a flexible exchange rate policy. This means that central bank will not provide foreign exchange for the imports of oil products to make foreign reserves intact.

To achieve the target, SBP will not intervene in the open market and would also phase out the provision of foreign exchange for oil import during the period ranges from February 1, 2009 to Feb 1, 2010. The Central Bank promises IMF that it would erase facility of providing foreign exchange for import of furnace oil by February 1, 2009, diesel and other refined products by August 1, 2009 and crude oil by February 1, 2010.

The government under the agreement will prepare, by end-March 2009, a plan for eliminating the inter-corporate circular debt within the fiscal deficit target. The plan will clearly identify all elements of circular debt, including (i) the identification of all debts owed and due among the corporations, duly reconciled; (ii) the determination of the validity of the claims; (iii) a schedule by which respective entities will discharge their liabilities to each other; and (iv) a timeframe during which the Federal Adjuster will use his powers to make adjustments, in case of failure, to adhere to the approved schedule.

The Fund has fixed fiscal deficit target of 4.2 percent for ongoing fiscal 2008-09 and 3.3 percent for next fiscal 2009-10. The Fund says that the targeted reduction in the fiscal deficit in 2008/09 will help eliminate SBP financing of the budget. The fiscal effort will be facilitated by the full-year effect of the elimination of energy subsidies by end-2008/09 and declining interest payments, following large bullet payments in the three-year period ending in 2009-10.

Under the accord with IMF, the government will limit SBP financing of the budget to zero on a cumulative basis during October 1, 2008-June 30, 2009. It means that the government will zero the loan borrowing from the central bank during Oct 1, 2008 to June 30, 2009. During this period, the fiscal deficit will be fully financed by available external disbursements (which have already been committed), the acceleration of the privatization process, the issuance of treasury bills, and other domestic financing instruments, including Pakistan Investment Bonds, Ijara Sukuk, and National Savings Scheme (NSS) instruments.

An integrated tax administration organization on a functional basis will be established at the Federal Board of Revenue (FBR) (integrating both the income tax and sales tax administration). In addition, audits will be reintroduced as part of a risk-based audit strategy that will be implemented by end-December 2008. A full description of the required reforms, together with an action plan will be provided to the IMF by end-December 2008.

The government will submit legislative amendments to parliament by end-June 2009. In addition, the excises on tobacco will be increased in the context of the 2009-10 budget. The government will initiate a process to implement a full VAT (value added tax) with minimal exemptions, to be administered by the FBR. Draft legislation for the VAT is expected to be ready for public debate by end-2009. The first program review will focus on the progress in developing the government’s tax reform agenda.

The government’s fiscal consolidation efforts will continue over the medium

term. The government’s fiscal framework assumes a further reduction in the fiscal deficit to 2-21/2 percent of GDP by 2012-13. Fiscal consolidation will be supported by a strong tax effort, which will allow for higher spending in infrastructure and the social sectors.

The government is under the accord to increase tax revenue by at least 3.5 percentage points of GDP over the medium term as a result of measures to broaden the GST base, significantly reduce income tax exemptions, and further improve tax enforcement.

If the government manages to implement the agreement in true spirit the Fund paints rosy future of Pakistan economic landscape. It projected the real GDP growth would increase to 5 percent in 2009-10, which is projected to rise gradually to 6.5-7 percent a year by 2012-13, based on a significant increase in investment and further progress in structural reforms.

However, average inflation is targeted to decline to 13 percent in 2009-10, and to 5 percent by 2012-13. Prudent demand management policies would contribute to a gradual decline in the external current account deficit to 5.7 percent of GDP in 2009/10, and further to 3.6 percent of GDP by 2012-13. This, along with the expected pickup in capital inflows, would help increase gross international reserves to $14.5 billion (2.6 months of projected imports) by 2012/13, while reducing the external debt to 29 percent of GDP. The external financing gap for 2009-10, which is projected at $3.6 billion, will be covered by disbursements from the IMF and GDR (global depository receipts) proceeds. External financing gaps will be fully eliminated by the end of the SBA.

As a result of these policies during the ongoing fiscal, the 12-month inflation rate is projected to decline to 20 percent at end-June 2009, even after taking into account the impact of significant increases in administered energy prices. Real GDP growth would slow further to 3-3.5 percent in 2008/09 in response to the tightening of macroeconomic policies and a deceleration of growth in Pakistan’s trading partners.

The conduct of monetary policy will be facilitated by significant improvements in liquidity management, including by improving the forecasting of the government’s cash flow position. As part of these efforts, the SBP and the Ministry of Finance have agreed on quarterly volumes of Treasury bill placements consistent with zero SBP financing of the budget during October 1, 2008-June 30, 2009. The SBP has issued an auction calendar for November-December 2008 on November 1st, 2008, and in the future will issue a calendar every quarter one month in advance. In addition, the SBP will review the current procedures for liquidity management, and will adopt and publicize a transparent liquidity management framework by end-July 2009 as part of its Monetary Policy Statement.

State bank of Pakistan will eliminate the exchange restriction on advance import payments against letters of credit will be eliminated by end-January 2010, subject to a marked improvement in the balance of payments position. No intensification of existing restrictions and no new exchange restrictions or multiple currency practices will be introduced during the program period.

The SBP will prepare a contingency plan to deal with problem private banks by end-December 2008. The plan will contain criteria for SBP liquidity support, assessment of bank problems, and intervention procedures. The SBP has already dealt with problem banks through mergers. Looking ahead, if there are severe strains in the interbank market and interbank lending guarantees appear necessary, these guarantees will be provided in limited amounts only to solvent banks.

For the purposes of monitoring under the program, all assets and liabilities as well as debt contracted, denominated in SDRs or in currencies other than the U.S. dollar, will be converted into U.S. dollars at the exchange rates prevailing at test dates, as posted by the State Bank of Pakistan (SBP) on its web site.

Net external budget financing and external cash grants will be converted into Pakistani rupees at the exchange rates prevailing at the day of the transaction, as posted by the SBP on its web site, unless otherwise indicated.

http://www.thenews.com.pk/daily_detail.asp?id=150367

sameerl

December 4th, 2008, 05:32 AM

spyk

December 4th, 2008, 08:06 AM

I dont think anyone wants to be like Iceland; the question is what do the policymakers do when confornted with a situation that is catastrophic financially. In pakistan we have decided to raise interest rates to combat deflating asset valuations (the single most idiotic idea conecived economically), and the reason is that we have decided to give IMf debt a preference in terms of payback. I have no problems in the way IMF dictated their terms and conditions to us; i would have done the same as wellhad i been lending money to aneconomic basket case like pakistan. the problem stems in terms of our thinking; no wisdom whatsoever for the domestic considerations and a tendencey to beg for money at the first possible resort. Atleast Iceland has taken steps to alleviate the crisis by flooding the economy with money.

Well, inflation is still running extremely high, at about 25%, so putting up interest rates to 15% makes sense. Dont forget, even at 15%, the REAL interest rates are still NEGATIVE because of inflation.

Flooding the system with money will do nothing but cause more inflation and further worsen our fiscal deficit.

Our economy has the potential to grow. What the IMF has prescribed will allow Pakistan to recover quickly and start growing again by in 2010.

The high interest rates and the falling intl. commodity prices mean inflation will start coming down in 6 months. Then interest rates will start coming down. Rupee devaluation means our exports will become more competitive.
Subsidies and other such bullshit will be abolished. Privatisation will continue.

Expect the high growth rates to return in 2010/2011, given the global economy doesnt go into a protracted and deep recession.

siamu maharaj

December 4th, 2008, 03:14 PM

Naresh

December 4th, 2008, 07:25 PM

Pak forex reserves climb to $9.80 bln (http://www.geo.tv/12-4-2008/30088.htm)

KARACHI : The foreign exchange reserves of the county rose to 9.80 billion dollars, the State Bank of Pakistan said Thursday.

According to figures released by SBP, the foreign exchange reserves witnessed an increase of 2.48 billion dollars.

Cheers:cheers:

spyk

December 4th, 2008, 10:38 PM

"Rupee devaluation means our exports will become more competitive"

I'm sick of this line. We don't make jack that's worth exporting. There's no-one waiting in the line to import our stuff. It's time we stop dreaming. As for subsidies, as long as agriculture is not taxed, I'm pro-subsidies.

Why do you want subsidies? Can we afford subsidies? Why should the taxpayer pay subsidies for private consumption?

And, why shouldnt agriculture be taxed? Everyone else and all other sectors pay their share of taxes, why should the farmers and feudal landlords be an exemption?

One of the biggest problems is that our tax to GDP ratio is extremely low. The tax nets needs to be broadened.

December 5th, 2008, 01:34 AM

KARACHI: Pakistan's foreign exchange reserves rose $2.48 billion to $9.08 billion in the week that ended on Nov. 29, the State Bank of Pakistan (SBP) said on Thursday.

The State Bank of Pakistan's reserves rose to $5.94 billion from $3.44 billion a week earlier, and reserves held by commercial banks were $3.14 billion compared with $3.16 billion

Reserves rose because the central bank said last week it had got $3.1 billion from the International Monetary Fund, the first tranche of a $7.6 billion loan.

http://thepost.com.pk/CorpNewsT.aspx?dtlid=195188&catid=8

Intoxication

December 5th, 2008, 01:36 AM

http://i262.photobucket.com/albums/ii109/traPPed_2008/HowPakistanMeasuresUp.gif?t=1228448872

LINK (http://southasiainvestor.blogspot.com/2008/08/musharrafs-economic-legacy.html)

Just for fun. :)

http://i262.photobucket.com/albums/ii109/traPPed_2008/CountriesMentioned.jpg?t=1228519403

sami231

December 5th, 2008, 08:45 AM

this means our current account deficit is the worst ..... need to ban import of non essential items

sameerl

December 6th, 2008, 05:42 AM

December 6th, 2008, 07:09 AM

RANA AAA

December 6th, 2008, 08:20 AM

Shafqat Ali

ISLAMABAD: Pakistan and Afghanistan annual transit trade has gone up to $2 billion and is likely to grow further with possible agreements between the two countries, official sources said.

"There are some agreements in the pipeline which will further facilitate trade between the two sides under the Afghan Transit Trade Agreement (ATTA)", a senior government official told The Post.

Quoting official figures, he said almost 50 percent of Afghanistan's trade is with its five neighbors Pakistan, Iran, Tajikistan, Turkmenistan and Uzbekistan. "There is considerable trade between Afghanistan and Pakistan, totalling over $2 billion, but it is very asymmetric, consisting for the most part by imports from Pakistan, as compared to very little formal Afghan exports", he added.

Transit to Afghanistan through Pakistan is currently broadly governed by the 1965 ATTA which specifies the port, route, transport modes and customs transit procedures. Since 1965, the economic and transport conditions for the transit of goods to and from Afghanistan through Pakistan has changed significantly.

"Both Afghanistan and Pakistan have agreed on the needs to negotiate a new agreement, not only to continue to provide Afghanistan with access to the sea through Pakistan but also to provide Pakistan with direct routes to the Central Asian Region (CAR) through Afghanistan", the official said. Major area of concern with respect to Afghanistan's potential as trade hub is trade logistics. In a recently released World Bank Study, Afghanistan ranked the last in a survey of 150 countries. Pakistan holds the 68th position on the Logistic Performance Index (LPI) that is based on the ability to transport goods reliably and in a cost-effective manner.

In the past few years both Afghanistan and Pakistan have invested largely in road, ports and border port infrastructure improvement. In Pakistan, the National Trade Corridor Improvement Program, initiated in 2005 is aimed at enhancing regional connectivity through trade links, and energy and transport corridors with China, Central Asian Republics, Afghanistan and Iran.

In Afghanistan, the rehabilitation and reconstruction of the ring road, circular road linking Kabul to Kandahar, Herat, Mazzar Sharif, Kunduz Kabul is under completion. Similarly, the connections to neighbouring countries from the ring road are progressing well. Afghanistan and Pakistan have also taken up several initiatives in trade facilitation in the form of simplification, standardization and harmonization of trade and transport related documents and procedures, strengthening institutional capability of trade and transport related entities and customs reform.

In Pakistan, the National Trade and Transport Facilitation Committee (NTTFC) under the Trade and Transport Facilitation Project (TTFP) has already taken several initiatives for facilitating trade and reducing the cost of doing business.

Afghanistan has just established a National Trade and Transport Facilitation Committee (AFPRO) with the objective of addressing trade and transit facilitation issues by bringing together all stakeholders in the area of trade, transport and transit. The ATT was severely hit following the countrywide turbulence that erupted in the wake of the assassination of Benazir Bhutto on December 27.

Afghan traders and their local counterparts claim that their financial losses could run into billions of rupees in the form of looting, damages of goods and the dismantling of logistic chain from the Karachi port to Afghanistan via land route.

Pakistan Railways (PR), the main agency providing logistic services for transport of goods in transit from Karachi to Peshawar was paralysed.

According to reports, the PR then suffered losses worth Rs 12-15 billion. The Pakistan and Afghanistan are in talks to discuss the evolving challenges and opportunities to facilitate trade and improve the trade logistics between the two countries.

As a landlocked country, Afghanistan is dependent upon transit countries for its foreign trade. Pakistan represents its main access to a seaport. At the same time, due to its strategic geographic position, Afghanistan has the potential for becoming a land linked country providing Pakistan with direct routes to the Central Asia Region (CAR) as well as being a regional hub for trade and transit between Central and South Asia, the Middle East and China, a role which the country has played historically. Notwithstanding these significant improvements, numerous problems remain, which hinder the actual conduct of trade.

Among the most serious obstacles to the movements of goods along the Pakistan Afghanistan corridors, long waiting times at the borders which also generates unofficial payment transactions, truck-to-truck transhipment at the border which increases handling costs, transit times and the risk of cargo loss and damage,, no role for the Afghan truckers in external transit (at the exception of the Peshawar route) as trucking is entirely provided by the transit countries, similarly, restrictive practices which prevent foreign truckers from operating in Afghanistan, high-rates charged by trucking cartel, vehicle standards below international levels and Lack of formal financial and insurance systems. Against three million dollars in 2002, the bilateral trade in the formal sector between Pakistan and Afghanistan increased to 492 million dollars in 2003-04 and climbed up to 1.63 billion dollars in 2005-06, but it witnessed a decline of almost 400 million dollars in 2006-07 because the Pakistani manufacturers have been losing out to mainly Iranian and Indian competitors.

However, Pakistan has targeted to increase its exports to Afghanistan to 2-3 billion dollars by 2010-11. Amongst Pakistan's exports to Afghanistan, rice, textiles and garments top the list. Presently, most of the trade between Pakistan and Afghanistan takes place in the informal sector, where the volume of clandestine business (smuggling or re-routing of Afghan transit trade goods) between the two countries is estimated to be more than 10 billion dollars.

In 2008, to boost trade between Pakistan and Afghanistan and to remove hurdles in the way of bilateral trade, the Federation of Afghanistan Chamber of Commerce and Industry signed a Memorandum of Understanding (MoU) with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to form the Pak-Afghan Chamber of Commerce and Industry (PACCI).

Over the years, the Afghan transit trade has been massively abused by the unscrupulous elements to import products only to push most of them back into Pakistan clandestinely through over 100 natural passes that dot the 2400 kilometre long Pakistan-Afghanistan border.

The specified routes for transit trade between Pakistan and Afghanistan are Peshawar-Torkham, Ghulam Khan Kelli and Chaman-Spinboldak. However, Afghanistan's seven border provinces (namely Badakshan, Kunar, Ningarhar, Paktia, Zabal, Qandahar and Hilmand), which are connected to Pakistan's Northern Areas, viz Chitral, Bajaur, Mohmand Agency, Kuram Agency, Northern Waziristan, Sourthern Waziristan and Balochistan, are being extensively used by some elements for cross-border movement of transit goods illegally.

http://www.thepost.com.pk/CorpNewsT.aspx?dtlid=195390&catid=8

spyk

December 7th, 2008, 03:54 AM

This is the problem; we rely on conventional thinking. Inflation was caused in pakistan largely by commodity price increases in 2007/2008. These pressures have disappeared. Inflation is already coming down; keeping interest rates high does not alleaviate inflation. In this scenario inflation was caused by exogenous factors not a function of domestic loose monetary policy. What interest rates being at this level are doing now is that they are prolonging a recovery by the industrial sector in their generation of free cash flows. Globally, there is a recognition by some of the finest minds that loose monetary policy is the only way t combat deflation/plunging asset values that are prevailing today. Pakistan has and always will be, a different category of species, and this mode of thinking will soon lead to extinction

Inflation IS COMING DOWN, but, it is STILL extremely high, at 25%. Keep in mind, IN REAL TERMS, 15% interest rates are still NEGATIVE. Loose monetary policy was also partly to blame for the high inflation, in addition to external factors.

Again, keep in mind taht deflation/plunging asset or prices are STILL not happening in Pakistan, although they are happening globally. Prices in Pakistan are STILL RISING at an extremely high rate, ie, 25%. This inflation will come down dramatically within 6 months, then we will lower interest rates. These high interest rates wont last for very long. The high interest rates, tight monetary policy and globally plunging prices will together combine to dramatically bring down inflation within 6 months, and, then we can bounce back and starting growing again. By 2010, expect high growth rates to return, given ofcourse the world too starts to recover.

I, for once, agree with the Washington Consensus.

Intoxication

December 8th, 2008, 04:13 AM

http://clip2net.com/clip/m7984/1226709563-clip-51kb.jpg

http://clip2net.com/clip/m7984/1226709644-clip-51kb.jpg

^^ These two posts also relate to Pakistan. Credit goes to Amar for finding these charts. :)

and if you think the world is to big for any country or group to controll then please explain why the worlds 1% richest owns 70% of the worlds wealth, why 97% of the money supply in uk and usa is controled by bankers and 3% by their goverements, there is no conspircy mate its a fact.

I agree with secular. I'm no fan of conspiracy theories either. I don't know where you got those figures from??? Any links??? Because just by reading your post, I was able to tell, that the figure saying that 1% of the World's people own 70% of the World's wealth was false. As The top 20 percent of the world's population earns about 80 percent of its income. (http://www.infoplease.com/cig/economics/production-income-classifications.html) (3rd Paragraph). Thats what I have studied anyway.

December 10th, 2008, 07:50 PM

Can we get back on topic, thanks!

Intoxication

December 10th, 2008, 11:09 PM

Can we get back on topic, thanks!

Okay FK! I'll help you get back on topic!

From "The Global Competitiveness Report 2008–2009":

http://i262.photobucket.com/albums/ii109/traPPed_2008/GCIPakKeyIndicators.jpg?t=1228946313

^^ Pakistan has about 2.5% of the World's population. But only 0.63% of its GDP. :ohno: :cry:

http://i262.photobucket.com/albums/ii109/traPPed_2008/GCI2008Pakistan.jpg?t=1228946338

http://www.weforum.org/pdf/GCR08/GCR08.pdf

December 11th, 2008, 01:42 AM

Moved here:

http://www.skyscrapercity.com/showthread.php?p=29136270#post29136270

brightside.

December 13th, 2008, 11:00 AM

Pakistan ranks 34th in WEF’s Financial Development Report (http://www.dailytimes.com.pk/default.asp?page=2008\12\12\story_12-12-2008_pg5_13)
12 Dec 2008

ISLAMABAD: Pakistan has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) Thursday.

The report is a comprehensive analysis of financial systems and capital markets in 52 countries that explores key drivers of financial system development and economic growth in developing and developed countries and serves as a tool by which countries can benchmark themselves and establish priorities for financial system improvement.

Arthur Bayhan, Chief Executive of the Competitiveness Support, said: "I am very happy to see that financial system in Pakistan is well reformed and competitive vis-à-vis Asia and Europe. Pakistan is ranked ahead of the Russian Federation (35), Indonesia (38), Turkey (39), Poland (41), Brazil (40), Philippines (48) and Kazakhstan (45)."

The United States narrowly edged the United Kingdom to take the top position in the Financial Development Index. The United Kingdom was second while China ranked 24 and India 31.

The rankings are based on over 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors, in assessing the complex financial systems of the 52 countries studied.

An important and unique measure captured by the Index includes the degree to which businesses feel they can easily access capital. The Financial Development Index is based on three main pillars - Factors, Policies and Institutions, Financial Intermediation and Capital Availability and Access. These are further divided into sub - pillars.

Pakistan ranks 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non-banks and 17th in financial markets. Under Capital Availability and Access, Pakistan ranks 33.

Indicators showed that in business environment Pakistan had development advantage in cost to export, ranking 6th. In Financial Stability Change in Real Effective Exchange rate Pakistan is at 20th, External debt to GDP 10th, Frequency of banking crises 1st, stability index 15th. In corporate governance Pakistan ranked at the very top in shareholder rights index, 14th in strength of investor protection. In the Non-banks pillar, Pakistan ranked 9th in the real growth of direct insurance premiums. In equity market movement Pakistan ranked at the top again.

Staff report

brightside.

December 13th, 2008, 02:41 PM

Look Trappy, another developed country helping out Pakistan on the condition that we invest that money on healthcare. Surely this can't be good! :crazy:

Germany agrees to write off 40m euro Pak debt

Monday, December 01, 2008
By Shafqat Munir

ISLAMABAD: Germany on Sunday agreed to write off euro 40 million of Pakistan debt on the condition that Pakistan invests Ä20 million in domestic health programmes supported by the Global Fund.

HIV/AIDS, tuberculosis and malaria remain public health threats in Pakistan with approximately 85,000 people living with HIV and many lives lost every year due to malaria and tuberculosis.

To date, the Global Fund has approved funding for six programmes fighting HIV/AIDS, tuberculosis and malaria in Pakistan worth more than US$130 million over five years. Of this amount, approximately US$37 million has already been disbursed to the country.

A tripartite agreement under ‘Debt2Health’ initiative was signed in Doha (Qatar) on the sidelines of the UN follow-up conference on Financing for Development among Germany, Pakistan and the Global Fund with a commitment to fight AIDS, tuberculosis and malaria. Pakistan became the second country after Indonesia to benefit from ‘Detb2Health’ financing instrument, a type of debt swap for health. In September 2007, Germany agreed to write off Ä50 million of Indonesian debt of similar nature.

The agreement with Pakistan was concluded between Heidemarie Wieczorek-Zeul, the special envoy of the UN Secretary General for the conference, German federal minister for Economic Cooperation and Development, Minister of State for Finance and Economic Affairs Hina Rabbani Khar and Dr Michel Kazatchkine, Executive Director of the Global Fund at a signing ceremony followed by a press conference.

Speaking on this occasion, Hina Rabbani Khar said, “The ‘Debt2Health’ initiative allows us to turn debt into urgently-needed new resources for health in Pakistan.” She hoped that other creditor countries would join this initiative and offer ‘Debt2Health’ agreements to Pakistan and other countries struggling with high disease burden and high levels of debt service.

“The Debt2Health is a win-win situation for Pakistan, Germany and the Global Fund. Pakistan receives more investments in health, the Global Fund increases predictability for its work and Germany contributes its share to the global fight against AIDS, tuberculosis and malaria,” said the German minister, adding, “I am proud that Pakistan and Germany are among the pioneers in this new initiative which bears testimony to the good relations between our countries.” The Global Fund’s Executive Director, Michel Kazatchkine, also hailed the agreement. He said: “‘Debt2Health’ goes beyond traditional financing for development.”

http://thenews.jang.com.pk/daily_detail.asp?id=149947

December 13th, 2008, 07:27 PM

:crazy:

Intoxication

December 14th, 2008, 03:16 AM

Look Trappy, another developed country helping out Pakistan on the condition that we invest that money on healthcare. Surely this can't be good! :crazy:

You talking to me boy???

:crazy:

^^ ???

RANA AAA

December 17th, 2008, 08:04 AM

GDP growth to be in range of 3.5-4.5pc: SBP

KARACHI ( 2008-12-06 14:37:10 ) :Pakistan's GDP is expected to grow by between 3.5 and 4.5 percent in the fiscal year 2008/09, slowing from 5.8 percent growth in the previous year, the State Bank of Pakistan (SBP) said on Saturday in its annual report.

"The urgency for macroeconomic stabilization is now evident throughout the economy," State Bank said in its annual report.

The International Monetary Fund, which last month approved a $.7.6 bailout package to help avert balance of payments crisis in Pakistan, has projected GDP growth of 3.4 percent for the year.

The State Bank projected inflation at 20 to 22 percent in the fiscal year to June 30, just below the IMF forecast of 23 percent.

Latest data for October showed inflation running at 25 percent.

Pakistan's inflation for fiscal year of 2007/08 was 12 percent.

The State Bank projected the fiscal deficit to range between 4.3 percent and 4.8 percent of GDP for the current fiscal year, compared with a target of 4.7 percent.

Fiscal deficit was 7.4 percent in the previous fiscal year.

The government hopes to achieve its target by eliminating subsidies and committing to zero net borrowing from the State Bank.

In the first quarter of fiscal year of 2008/09, fiscal deficit was 1 percent, the State Bank said.

The State Bank projected the current account deficit to be between 6.2 percent and 6.8 percent of GDP in 2008/09, compared with 8.4 percent in the previous year, when the economy was hit by a sharp rise in international oil and commodity prices and as well as some domestic shocks.

The IMF's projection for current account deficit is 6.5 percent of GDP for fiscal year ending June 30.

source: http://www.aaj.tv/news/Business/123795_2detail.html

RANA AAA

December 17th, 2008, 08:05 AM

Pakistan ranks 34th in WEF’s Financial Development Report

ISLAMABAD: Pakistan has been ranked 34 out of 52 countries in the World Economic Forum's first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) Thursday.

The report is a comprehensive analysis of financial systems and capital markets in 52 countries that explores key drivers of financial system development and economic growth in developing and developed countries and serves as a tool by which countries can benchmark themselves and establish priorities for financial system improvement.

Arthur Bayhan, Chief Executive of the Competitiveness Support, said: "I am very happy to see that financial system in Pakistan is well reformed and competitive vis-à-vis Asia and Europe. Pakistan is ranked ahead of the Russian Federation (35), Indonesia (38), Turkey (39), Poland (41), Brazil (40), Philippines (48) and Kazakhstan (45)."

The United States narrowly edged the United Kingdom to take the top position in the Financial Development Index. The United Kingdom was second while China ranked 24 and India 31.

The rankings are based on over 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors, in assessing the complex financial systems of the 52 countries studied.

An important and unique measure captured by the Index includes the degree to which businesses feel they can easily access capital. The Financial Development Index is based on three main pillars - Factors, Policies and Institutions, Financial Intermediation and Capital Availability and Access. These are further divided into sub - pillars.

Pakistan ranks 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non-banks and 17th in financial markets. Under Capital Availability and Access, Pakistan ranks 33.

Indicators showed that in business environment Pakistan had development advantage in cost to export, ranking 6th. In Financial Stability Change in Real Effective Exchange rate Pakistan is at 20th, External debt to GDP 10th, Frequency of banking crises 1st, stability index 15th. In corporate governance Pakistan ranked at the very top in shareholder rights index, 14th in strength of investor protection. In the Non-banks pillar, Pakistan ranked 9th in the real growth of direct insurance premiums. In equity market movement Pakistan ranked at the top again. staff report

source: http://www.dailytimes.com.pk/default.asp?p...-12-2008_pg5_13

brightside.

December 17th, 2008, 06:44 PM

^^ I already posted this a few posts ago.

RANA AAA

December 20th, 2008, 06:04 AM

Faisalabad Garments City to be functional soon

Our Correspondent

FAISALABAD: Faisalabad Garments City (FGC) is expected to become functional from the January, said Mukhtar Ahmad Sheikh chairman FGC Company.

He said here Friday that Federal Advisor on Textile Industry Dr. Mirza Ikhtiar Baig personally visited the FGC and lauded the pains taking efforts made by its Board of Directors (BOD) for its quality and early completion. "This is the first project of Textile Ministry, which is expected to be completed at the earliest to give a quantum jump to the garment's export from this facility", remarked the Federal Advisor. He also assured full financial and administrative support from the Government of Pakistan and Textile Ministry to expedite work on FGC which would also provide jobs to hundreds and thousands of youth including female workers.

RANA AAA

December 21st, 2008, 12:58 AM

Cut in discount rate: IMF will be approached, says Tarin

RECORDER REPORT

KARACHI ( 2008-12-19 05:04:30 ) :The government has decided to negotiate with International Monetary Fund (IMF) for a cut in discount rate if the inflation goes down, which is expected to take place in the third quarter of current fiscal year.

Talking to newsmen after the groundbreaking ceremony of Procter & Gamble Pakistan manufacturing plant at Port Qasim on Thursday, Shaukat Tarin, Advisor to the Prime Minister on Finance said that monthly comparison of inflation figures showed that it has declined last month. He said that the government is fully committed to provide all facilities to the local as well as foreign investors for the promotion of industries.

"Government has also decided to promote agricultural and manufacturing sector by providing maximum relief and incentives, as these sectors are major contributors in the GDP growth," he added. He said that with an objective to promote the industry, the government is also going to rationalise the utility tariff to enable the industry to grow.

Advisor said that the country's economy has faced several difficulties during the last one year due to the unexpected price increase of commodities prices like oil in the world market. However with the reduction in the commodity prices some positive impact has been seen on the economy and twin deficits are shrinking.

"Some two billion dollars decline has been registered in the trade deficit and we are expecting a trade deficit of some 12-14 billion dollar by the end of June 2009 from 20 billion dollar in fiscal year 2008," he added. He said that the government is restructuring the planning commission and a nine point economic agenda is being planned in consultation with all the stakeholders.

"We have had a good growth rate during the last 10 years and we want it to continue through promoting agricultural and manufacturing sectors," Tarin said. He said that some new industrial zones are being set up in different parts of the country aimed to boost the industries.

On the occasion addressing the gathering US Ambassador Anne W. Patterson said that establishment of the new P&G plant would promote trade relations between Pakistan and US. She said that some 100 million dollars direct investment would be introduced through P&G new plant and some 7000 new jobs would be generated.

Speaking at the occasion, Laurent Philippe said; "This is our second plant in Pakistan and it is P&G's largest investment in the country. This investment symbolises P&G's confidence that Pakistan will continue to provide a stable and conducive business environment over the long-term; strengthening our commitment to invest more in the country and serve the consumers of Pakistan.

With the plant occupying only one-third of the total 25 acres of land acquired, we have built in provision for future expansion projects and other plants to serve the domestic market with the full portfolio of P&G products." Elaborating on the vision behind this investment, Qaisar Shareef, Country Manager P&G Pakistan said "the launch of our second manufacturing facility in Pakistan is testimony to P&G's successful history in the country.

This investment project will improve local industrialisation prospects by creating tremendous potential opportunity of business over the next few years. "Once established, the plant will create employment opportunities for more than 7000 Pakistanis directly and indirectly. Additionally, it will contribute $1.1 billion to the national exchequer over 10 years", he added.

He said that this mega project consists of the construction of a complete industrial production unit for the manufacture and packing of laundry detergent and diapers. The plant will be based on latest European technology, ensuring compliance not only to Pakistani requirements but also with the strictest American, British & German standards by not only minimising the impact on the environment but also using less energy, he concluded.

source: http://www.aaj.tv/news/Business/124683_1detail.html

RANA AAA

December 22nd, 2008, 05:09 AM

‘2,851mw electricity to be added next year’

Commerce Reporter

ISLAMABAD: Minister for Water and Power Raja Pervez Ashraf has said that 2,851 MW electricity will be added into the system by next year with the help of private sector.

Chairing the 79th meeting of the Board of Private Power and Infrastructure Board (PPIB) here on Sunday, he said by subsequent additions into the system each year would accumulate to around 9,500 MW electricity in the next five years.

He said the government is committed to achieve its targets for inducting more power capacity into the national grid to get rid of load shedding by next year. He congratulated that the 165 MW Attock Gen Power Project has already synchronized, which will shortly be inaugurated by the President.

The Power plant in due to start supplying power to the system very soon. The Managing Director PPIB briefed the Board that the rental power projects being processed by PPIB are showing good progress and the their contracts have been concluded, while PPIB will solicit additional rental power projects on fast track basis through press, in the coming week, he added.

RANA AAA

December 24th, 2008, 07:27 AM

Export of textile, food items increases

Updated at: 0415 PST, Wednesday, December 24, 2008
ISLAMABAD: Textile exports during the month of November 2008 witnessed increase of 1.22 percent as compared to exports of October 2008.

Textile exports during November were recorded at $838 million as against exports $828 million registered in October 2008, according to data released by Federal Bureau of Statistics.

However, as compared to the textile exports of the same month of last financial year, exports during November 2008-09 witnessed decrease of 7.2 percent. Textile exports during November (2007-08) were recorded at $903 million.

As compared to October 2008, the export of raw cotton during the month under review was increased by 23.15 percent however, cotton yarn witnessed decrease of 11.02 percent while export of cotton cloth witnessed decline of 3.57 percent.

Export of carded cotton was decreased by 56.03 percent, yarn other than cotton yarn by 23.65 percent, towels by 8.77 percent and madeup articles export declined by 8.30 percent.

However, export of readymade garments increased by 21.67 percent, knitwear by 4.63 percent during the month under review as compared to month of October.

Similarly, bed wear export was increased by 4.76 percent, tents, canvas and tarpaulin by 68.24 percent, art silk and synthetic textile by 0.06 percent.

On the other hand, food export from the country was increased by 10.71 percent during the month of November 2008 as compared to month of October.

Among food items, export of rice was increased by 18.17 percent. However, export of basmati rice was decreased by 13.06 percent while the export of other rice items increased by 49.32 percent.

Export of fruits increased by 54.66 percent, vegetables by 86.37 percent, spices by 47.80 percent and oil seeds, nuts and kernels by 231.12 percent.

However, export of fish and fish preparations was declined by 19.35 percent, leguminous vegetables (pulses) by 33.54 percent while meat and meat preparations export declined by 1.26 percent.

source: http://thenews.jang.com.pk/updates.asp?id=63097

Naresh

December 29th, 2008, 01:51 PM

Pakistan Foreign Reserves 19-Dec-2008 : USD 9.4350 Billion (http://www.sbp.org.pk/ecodata/forex.pdf)

Cheers:cheers:

brightside.

December 30th, 2008, 09:04 PM

brightside.

December 30th, 2008, 09:09 PM

Economy shows improvement in first quarter: SBP (http://www.dawn.com/2008/12/30/top12.htm)
By Shahid Iqbal

KARACHI, Dec 29: The State Bank of Pakistan said on Monday that the economy had improved during the first quarter of the current fiscal year and some macro-economic indicators had shown strength after a steep fall in 2007-08.

In its first quarterly (July-Sept) report the SBP expressed the hope that economy would see stabilisation despite lower than expected growth.

“The sense of crisis gripping Pakistan’s economy in the initial months of the financial year 2009 has visibly eased by November 2008, as the government moved to address the most immediate risks and entered into a macroeconomic stabilisation programme to support medium-term reforms under the aegis of the IMF,” the report said.

The fiscal performance improved consequent to the policy shift, with the overall fiscal deficit estimated to have dropped to 1 per cent of the annual GDP. This was consistent with the annual fiscal deficit target set under the IMF stabilisation programme.

The SBP said that reduction in fiscal deficit had been brought about mainly by a drastic cut in development expenditures.

The data available so far show that the government has made a fine start to contain the fiscal deficit. However, the fiscal improvement appeared to be largely based on reduction in oil subsidies and a cut in development expenditure.

According to the July-Sept data, revenue grew by 24.4 per cent compared to 14.8 per cent of the corresponding period of last year. Similarly, exports increased by 12.7 per cent against 6.5 per cent of last year. The money supply was negative 0.2 per cent while it was 4 per cent during the same period last year.

“On a positive note, both fiscal and current account deficits are estimated to improve in FY09,” said the SBP.

Inflation remained the biggest challenge as it was still around 19.1 per cent on a 12-month average, it said.

The central bank expressed concern that despite a sharp fall in global commodity prices, its impact was not passed on to the end consumers. It said the government had substantially reduced the prices of petroleum products, but the transportation cost had not been lowered.

The report pointed out that domestic commodity prices did not decline in tandem with the sharp fall in international prices.

It said one of the biggest challenges for the government would be to ensure the pass-through of the decline in international commodity prices to consumers. While the recent downward adjustments in the administered prices of key fuels was appreciable, the reversal in transport fares and goods transportation charges was almost negligible, the SBP said.

It said consumer awareness, role of the media, quicker settlement of import duties and other taxes might be required to accelerate the dis-inflationary process.

The report said that temporary liquidity shortages with the commercial banks were viewed as signs of financial crisis in the country, leading to a fresh round of speculative attacks on domestic currency.

“Unfortunately, these developments coincided with the global financial and liquidity crises, thus it was perceived that the domestic crisis was also triggered due to the same reasons as faced by western financial institutions,” the report said.

It said the global recession and risk averse behaviour of investors might severely impact international trade and level of forex inflows in the economy.

The SBP’s estimates for both imports and exports have been revised downwards, with a more pronounced effect on imports. At the same time, in the event of a shortfall of external financing, the burden of financing the fiscal deficit will disproportionately fall on the domestic commercial banks, since the government has committed not to borrow incrementally from the central bank.

In addition, the report said, foreign direct investment inflows might be substantially lower than in recent years, in which case pressures on forex reserves could remain strong.

“Both possible developments indicate continuing risk on interest rates and exchange rate, and thus the need for continued vigilance by policymakers,” said the SBP.

“The economy needs effective policies and implementation of reforms in FY09 to regain macroeconomic stability in the midst of a challenging year. Real GDP growth is likely to be significantly lower than the annual target and inflation will breach its target with a wide margin,” the report said.

December 30th, 2008, 09:40 PM

siamu maharaj

December 31st, 2008, 06:18 AM

New 1 Re coin (silver) - Old 1 Re coin
New 2 Re coin (silver) - Old 2 Re coin
5 Re coin

And the new 10 Re coin bearing BB's face on it. Unbelieveable.

http://farm4.static.flickr.com/3082/3147584691_d7798cc181_b.jpg
I have the Re. 1 coin. It feels like the 10 paisa coin of yesteryears. I guess the older (orange) coin probably cost twice its worht.

sami231

December 31st, 2008, 07:10 AM

is the benazir coin permanent ???

brightside.

January 2nd, 2009, 04:41 PM

Pakistan's foreign exchange reserves up by $227 million (http://www.brecorder.com/index.php?id=859746&currPageNo=1&query=&search=&term=&supDate=)

RECORDER REPORT

KARACHI (January 02 2009): The country's liquid foreign exchange reserves surged by some 227 million dollars during the last week. The total liquid foreign exchange reserves held by the country stood at 9.662 billion dollars on December 27, 2008 as compared to 9.435 billion dollars on December 20, 2008.

Foreign exchange reserves held by the State Bank of Pakistan stood at 6.369 billion dollars from 6.148 billion dollars, depicting an increase of 221 million dollars. In addition, foreign exchange reserves held by banks also witnessed a surge of some 5.1 million dollars to 3.292 billion dollars during the last week.

is the benazir coin permanent ???

^^ It will likely be issued until the PPP is in government, then it will hopefully go out of circulation. Although I'd rather have this than have a certain baldie appoint himself as the "Ameer" of Pakistan :bash:

AAAJ

January 4th, 2009, 01:20 PM

Pakistan's foreign exchange reserves up by $227 million (http://www.brecorder.com/index.php?id=859746&currPageNo=1&query=&search=&term=&supDate=)

^^ It will likely be issued until the PPP is in government, then it will hopefully go out of circulation. Although I'd rather have this than have a certain baldie appoint himself as the "Ameer" of Pakistan :bash:

What they did with BB's face? :nuts:

RANA AAA

January 7th, 2009, 08:15 AM

‘Road network expansion to promote trade activities’

* Warraich says Pakistan signed quadrilateral agreement on March 9, 1995 to promote trade activities with CAS

ISLAMABAD: Minister State for Communications, Chaudhry Imtiaz Safdar Warraich said Wednesday the government was expanding network of roads to promote trade activities in the country besides with central Asian States.

Talking to a five-member delegation of National Highway Authority (NHA) headed by Naeem Khalid GM (Punjab), he said the road network of Pakistan was playing an important role in boosting trade activities in the country and central Asian States, like Kazakhstan, Kyrgyzstan including China.

He said to promote trade activities with Central Asian States, Pakistan signed quadrilateral agreement on March 9, 1995 while a protocol on custom procedure for goods in transit and passport visa regime for the implementation of agreement signed on November 24, 1998. Pakistan had taken a number of initiatives for the success of the quadrilateral agreement including up-gradation of Kara Kurram Highway (KKH) for incoming traffic from member states, he added.

He said the work on 325 km long Raikot to Khunjrab section of KKH had been started with the cooperation of China while the work of upgradation of 480 km long area of KKH from Khunjrab to Hasanabdal was on awarding stage and work on this section would start soon.

The minister said the establishment of North, South Express Way/Motorway system and the development of links between National Trade Corridor and Gwadar port like projects have also been started to promote trade activities in a bid to alleviate poverty in the country. staff report

source: http://www.dailytimes.com.pk/default.asp?p...1-1-2009_pg5_14

RANA AAA

January 7th, 2009, 08:16 AM

CDWP approves three important uplift projects

RECORDER REPORT

ISLAMABAD ( 2008-12-30 04:27:26 ) :A special meeting of the Central Development Working Party (CDWP) held here on Monday to consider three important development projects costing Rs 173 billion, sources told Business Recorder. The three projects included Benazir Income Support Programme (BISP) Rs 34 billion and setting up two nuclear power plants CHASHNUP III and CHASHNUP IV at a cost of Rs 139 billion.

According to the sources, the three projects were cleared in principle. The Planning Commission (PC), however, gave some observations on BISP stating that the government must make special allocation for the pro-poor project as it cannot be included in the over all development plan for the current fiscal. The PC high ups gave no detail of the meeting. This was an in-camera meeting. We cannot give any detail to the media, said a high PC official when he was contacted.

Sources said that the three projects were important and the concerned ministries had requested for the special meeting of the CDWP to consider them on priority basis. Due to power shortage, there is a need to start projects in power generation sector to help government reduce the power demand and supply gap that reached over 3,300 MW even when the electricity demand is not that high due to winter.

source: http://www.aaj.tv/news/Business/125473_detail.html

RANA AAA

January 7th, 2009, 08:17 AM

Saleem Raza upbeat after tough steps

KARACHI ( 2008-12-31 03:27:02 ) :New State Bank of Pakistan governor is hopeful about economic prospects after tough measures were taken to avert an economic crisis, including agreeing to an International Monetary Fund lending programme. Saleem Raza, the former head of Citibank in Pakistan who now heads Pakistan Business Council will take over as governor of the State Bank on Friday, replacing Shamshad Akhtar who completed her three-year term.

"I am positive as we've taken the fiscal pain and we've taken the monetary pain," Raza told Reuters late on Monday, referring to cuts in government subsidies and rises in interest rates. Raza, who sits on the prime minister's economic advisory council, declined to say if he intended to maintain a tight monetary stance. He would be in a better position to answer the question after taking office, he said.

Pakistan saw years of healthy growth under former president Pervez Musharraf but surging oil and food prices earlier this year and more lately the global financial crisis hit the economy. Raza headed Citibank Pakistan for 5 years, from 1983 to 1987, and later worked as a banker internationally for many years.

He returned to Pakistan a few years ago and for the past two-and-a-half years has been chief executive of Pakistan Business Council, which aims to develop policy and co-ordination between the private and state sectors. Raza said he felt his experience was well-suited to taking over at the central bank and he was looking forward to his new post.

"As an international banker, you have to watch monetary and fiscal policy very closely because it affects exposure in all realms," he said. "After a point when you are looking at strategy and how you are going to grow the bank, fiscal and monetary policy are the most important things," he said.

source: http://www.aaj.tv/news/Business/125555_2detail.html

RANA AAA

January 7th, 2009, 08:17 AM

Pak’s economy the only beneficiary of int’l financial crisis

* Economy benefited by gaining over $6 billion in 2008-09

By Sajid Chaudhry

ISLAMABAD: Pakistan's economy has emerged as the unique one, which has been the net beneficiary of the world's financial crisis, with over $6 billion gains in the current fiscal year 2008-09, according to an analysis of the officials at Ministry of Finance on Wednesday.

Fiscal year 2008-09 that started with skyrocketing oil prices touching $147 per barrel the estimated oil import bill was projected at $14 billion. However, financial crisis in the United States and Europe along with other industrialised countries has reduced the oil demand resulting in continuous decline in world oil prices. The decline in world oil prices which started from $147 a barrel and reached to less than $50 a barrel helped developing countries especially Pakistan to lower its oil import bill projections at around $9 billion with net savings of $5 billion alone on oil import.

On the other hand, some $1 billion savings are being projected due to the decline in the prices of edible oil in this fiscal year. Similarly, declining wheat, sugar and fertiliser prices also helped Pakistan to import more wheat especially for arranging strategic reserves as well as meeting requirements of the deficit provinces with estimated savings in terms of millions of dollars.

Visible decline in oil and food prices especially wheat has been instrumental in reduction in pressure on country's foreign exchange reserves, as it has been faced with balance of payment problem. Pakistan has been able to get $7.6 billion Stand-By-Arrangement from the International Monetary Fund (IMF) to meet its balance of payment obligations. At present problems faced by the big industrialised countries are different and problems faced by Pakistan are totally different, owing to this Pakistan and big countries are pursuing policies that are totally different.

According to the officials, at a time when big countries like United States, European countries and other industrialised countries are pursuing easy fiscal and monetary policies with fiscal stimulus of billions of dollars, interest rates are being lowered to spur economic growth and financial help packages have been announced in United States and European Union to avoid further economic slowdown.

As compared to these countries, Pakistan is pursuing tight fiscal and monetary policies to cut demand and slow down the economy to tackle the balance of payment problem. In this regard, interest rates are being increased to counter inflation and demand in the economy and imports are being discouraged despite the fact that these are the main sources of revenue generation.

Pakistan may face some consequences of world financial crisis as it is adopting tight fiscal and monetary policies in the shape of reduced exports to European Union and United States. Less remittances from countries hit by the crisis and less job opportunities will lead it an increase in poverty. However, the officials are of the view that negative impact in terms of exports, remittances, reduced job opportunities and increase in number of poverty; Pakistan would still be the net beneficiary as compared to the gains of billions of dollars.

source: http://www.dailytimes.com.pk/default.asp?p..._1-1-2009_pg5_1

RANA AAA

January 7th, 2009, 08:18 AM

Pakistan makes biggest exposition of its products in Dhaka

DHAKA ( 2008-12-31 19:56:30 ) :Pakistan is set to make its biggest presence at the month-long international trade fair beginning in Dhaka tomorrow (Thursday) to showcase and promote quality products from home and abroad.

The Export Promotion Bureau (EPB) in cooperation with the Ministry of Commerce is organizing the 14th edition of Dhaka International Trade Fair (DITF) at Sher-e-Bangla Nagar.

This event especially aims at promoting and showcasing quality products offered by Bangladesh to the visitors from the region and abroad. At the same time, the business carnival will also serve as an opportunity for foreign participants to display their products and services as well establishing prospective business partnerships through networking. The exhibition will showcase a wide array of products such as machinery, industrial and agricultural equipments, electronics, consumer and home products and so. President Prof. Dr Iajuddin Ahmed would inaugurate the DITF at a function at the Bangladesh-China Conference Centre tomorrow (Thursday) at 11am.

Thirty-five companies and firms from Pakistan will take part in the DITF 2009, topping the list of 12 foreign countries already registered with the EPB.

Twenty two companies from Sri Lanka, one each from India, the United States, Germany, China, Turkey, the United Arab Emirates, and Malaysia, two from Singapore and 15 from Thailand will participate in the annual fair, the largest ever exposition of quality goods in Dhaka from abroad.

The leading Pakistani organisations and firms taking part in the DITF 2009 include Trade Development Authority of Pakistan, the Federation of Pakistan Chambers of Commerce and Industry, Star Enterprise, Techno International, Irfan Orient Crafts and Waah International.

"Pakistan has been given a pavilion free of cost as a token of goodwill from Bangladesh," EPB spokesman M Abdur Rahman told APP Wednesday.

Pakistan topped the list of foreign participants in DTIF 2008 also.

Bangladesh was given free space in Karachi trade fair last year, he informed.

Japan, China and South Korea have been named partner countries in the 2009 trade fair.

EPB Director (Policy) Abdur Rahman strongly pleaded for direct shipping lines and diversification of Bangladeshi products for a breakthrough in Pakistani market.

Currently, Bangladesh exports raw jute and jute products, chemical fertiliser, tea, cut flower and foliage, tobacco, pharmaceuticals to Pakistan while imports textile and textile articles, machinery and mechanical appliances etc from Pakistan.

source: http://www.aaj.tv/news/Business/125616_2detail.html

RANA AAA

January 7th, 2009, 08:19 AM

First CFC established at Takhtbhai

Friday, January 02, 2009
By our correspondent

PESHAWAR: Small and Medium Enterprises Development Authority (SMEDA) General Manager Syed Iqbal Kidwai inaugurated a Common Facility Centre (CFC) at Takhtbhai on Thursday.

This is the first CFC established by the private sector through Anjuman-i-Loharaan Takhtbhai with the support of SMEDA.

Amir Sani, President of the association, appreciated efforts of SMEDA team and said that CFC was formed with 100 per cent funding by members of the association but it was not possible without the help, support and guidance of SMEDA.

Congratulating members of the association on the landmark achievement, Kidwai said it would benefit SMEs of the region in a big way.

He urged the representatives of other industrial units to follow the model to benefit from joint purchases and utilisation of common facilities that would result in reduction in the cost of production.

Javed Khattak, the Provincial Chief of chief SME, informed that the project in its soft launch period of two years resulted in a monetary benefit of about Rs0.2 million. It was expected that monetary benefit of SMEs would go up to Rs2 million on monthly basis after full production of the CFC, he added.

source: http://thenews.jang.com.pk/daily_detail.asp?id=154994

RANA AAA

January 7th, 2009, 08:19 AM

Engineering Board delegation to visit Kuwait

Sunday, January 04, 2009
ISLAMABAD: The Engineering Development Board (EDB) has organised a high level engineering delegation comprising prominent companies from both public and private sector to visit Kuwait from January 5-8.

The aim of the visit is to explore possibilities of bilateral cooperation and business development opportunities in large developmental projects coming up in Kuwait in the oil and gas, energy and infrastructure sectors.

The delegation led by Chairman, State Engineering Corporation, Ministry of Industries and Production Maj Gen (Retd) Zaheer Ahmad Khan.

Leading engineering companies on the delegation are Pakistan Engineering Company, PEL, Huffaz Seamless Pipe Industries, Newage Cables, Descon Engineering Company, National Power Construction Corporation, Heavy Electrical Complex and Breeze Frost Industries.

The Pakistan delegation visit has been organised by EDB in coordination with the Pakistan Mission in Kuwait and Kuwait Chamber of Commerce and Industry (KCCI). During the visit, the delegation will have important engagements at the KCCI on January 5 where Pakistani companies will have the opportunity of making presentations about their products and capabilities to prominent Kuwaiti companies and hold one to one business matchmaking meetings with them.

The delegation will also hold important meetings with various government officials of Kuwaiti line ministries to discuss ways for promoting business cooperation between the two countries and engaging Pakistani companies in mega projects as subcontracting partners in the future.

Pakistani companies would be promoting engineering goods and services ranging from power equipment like power and distribution transformers, high voltage transmission towers, high and extra high transmission lines, electric cables and wires, EPC contracting, substations, engineering construction, power projects on turnkey basis, power generation plants and industrial electrification.

source: http://thenews.jang.com.pk/daily_detail.asp?id=155383

RANA AAA

January 7th, 2009, 08:20 AM

Interest rate will not be increased: all IMF targets met, says Tarin

AHMED MUKHTAR

ISLAMABAD ( 2009-01-06 04:23:10 ) :Finance Ministry has achieved all IMF targets, including 2 percent fiscal deficit by the end of December 2008, and tax collection likely to touch 10.5 percent of GDP as discussed and agreed, said Advisor to PM on Finance, Shaukat Tarin.

He also said that interest rate would not be increased now. "I am not in a mood to increase interest now as inflation rate would start falling now". He said that CPI inflation as of December is likely to fall by 1.5 percent and in the next two months it would reduce by 2 percent, as initial data is indicating. By end-June inflation would be below 20 percent.

Talking in Aaj TV program Islamabad on Monday night he said that Rs 700 billion was stuck in bank accounts of unspent development spending, which should first be used, then asking for new allocation, even which we are ready to do as government has more fiscal space.

IMF delegation is due in February, which would review end-December targets, where the government seems comfortable now, he said. Increase in defence expenditures has not put the spending under pressure, and these are manageable.

He said that circular debt is Rs 169.7 billion and is likely to be settled by end-January, and ministries have spent their last two days in resolving these issues. Initial payment of Rs 7.5 billion has gone and other payments would come in due course of time.

This would have cut electricity shortage from 4500 mw to 2000 mw and would reduce load shedding substantially. OMCs margins and dealers margins are being reviewed in the petroleum policy, to be taken up by ECC on January 9.

The government is also planning to review oil and gas payments on monthly basis. On expenditure side, Tarin said that he had asked the ministries to reduce their travelling, petrol, telephone and other spendings to match revenue capacity.

State Bank's profit with other government owned commercial organisations would provide some resources for managing fiscal deficit. He admitted that that poverty rate has increased in last two years and a World Bank-based survey with independent third-party evaluation was underway, which would be completed by end of this year. Overdraft of SBP has reduced by Rs 36 billion from Rs 258 billion to Rs 222 billion, which would also help reduce other monetary targets.

NFA (net foreign assets) and other targets are also on track. He also assured no bank failure and government is ready to issue any guarantee to any bank in case it shows any problem, say Tarin.

He said that falling trade deficit has helped in managing foreign exchange reserves. In next 18 months oil payments would be shifted from interbank rate market. "We have crossed problem time and now we are sailing through for a better future where I am seeing light at the end of the tunnel", Tarin remarked.

source: http://www.aaj.tv/news/Business/126028_detail.html

brightside.

January 7th, 2009, 10:15 PM

FBR misses first half year revenue target (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/fbr-misses-first-half-year-revenue-target--qs)
Mubarak Zeb Khan
Wednesday, 07 Jan, 2009 | 08:22 PM PST |

http://www.dawn.net/wps/wcm/connect/2a3f49804c942cdd914fffc7ff3460dd/pakrupee400x241.jpg?MOD=AJPERES
The FBR has missed the first half year revenue target of Rs580bn by a wide margin of Rs36.7bn. — File

ISLAMABAD: The Federal Board of Revenue (FBR) has missed the first half year revenue target of Rs580 billion by a wide margin of Rs36.7 billion raising fears of missing the International Monetary Fund (IMF) annual projected target of Rs1360 billion for the current fiscal year, Dawn has learnt.

The finance ministry in consultation with the tax authorities had revised upward the revenue collection target from the budgeted Rs1250 billion as one of the conditions of the IMF $7.6 billion bailout package for Pakistan under a 23 months stand by arrangement program to avert an economic meltdown.

Well-placed sources told Dawn that no doubt the tax authorities would try to make up for the shortfall in the coming months so that the original target was not revised downwards.

However, the ground realities were not so favourable to reach the target including the narrow tax base.

A source in the finance ministry said Pakistan is going to miss the annual revenue target set under the IMF program owing to slowing down in the economy largely because of sluggish growth in the large-scale manufacturing industries, which recorded more than five per cent negative growth in the July-October period of the current fiscal year.

The manufacturing and services sectors are the biggest contributors in revenue collection, which entered negative growth owing to global recession coupled with high cost of doing business and political instability in the country.

The source said the decline in revenue is also because of slowing down in the imports bill of oil sector this year due to falling oil prices in the international market. The government raised more than Rs154 billion revenue collection alone from the oil sector last year, which is 23 per cent of the total indirect taxes collection.

Other potential sectors, which could contribute to revenue collection, were also facing sluggish growth, such as the telecom, wholesale and retail sectors etc. while two sectors —agriculture and stock market — were exempted from taxes.

According to studies, alone the capital gains tax can yield more than Rs60 billion revenue to the government kitty. 'If these sectors are not performing well, then from where will the revenue be generated,' the source said.

The source said the FBR has also failed to widen the tax base by tapping revenue potential sectors and only relaying on voluntary collection of revenue due to suspension of audit of taxpayers.

Provisional figures compiled by the FBR showed that the direct taxes collection remained short of the target by Rs25.4 billion during the first half year as it reached to Rs203.6 billion as against the target of Rs229 billion set for the same period.

The payment under the head of voluntary payment of income tax has started a decline for the past two years owing to suspension of audit by tax authorities.

According to statistics, the corporate sector filed 11,000 tax returns with the FBR by end December 31, 2008 as against 21,008 companies registered with the tax department. Last year more than 13,000 corporate returns were filed leaving a wide shortfall of more than 2000 non-filers this year.

A tax official said this will be the biggest set back for the FBR as the companies listed with the Security and Exchange Commission of Pakistan (SECP) have crossed the figure of 50,000. The official said notices have been issued to the non-filers' companies.

The number of tax returns filed by the corporates has been stagnant between 9,000 and 13,000 for the past five years. No tangible result has been achieved in bringing more companies under the tax net as the gap between the filing and non-filing companies is widening.

Besides, almost half of those that file returns have declared business losses. For detecting firms and taxpayers evading taxes, there is a need for a strong audit, which has been suspended for the past few years.

Under the head of general sales tax (GST) the revenue collection reached to Rs214.7 billion in the first half year as against the target of Rs226 billion, leaving a shortfall of Rs11.3 billion during the period under review.

The federal excise collection stood at Rs52.2 billion during the July-December period of the current fiscal year as against the target of Rs53 billion, showing a decline of Rs0.8 billion. And the customs duty collection declined by Rs1.2 billion during the period under review as it stood at Rs72.8 billion against the target of Rs74 billion set for the same period.

This news scares me :(

sami231

January 10th, 2009, 12:55 AM

Forex reserves increase by $343 million

Staff Report

KARACHI: The country's liquid foreign exchange reserves rose by over $343 million during last week.

The State Bank of Pakistan's statistics show that overall foreign exchange reserves registered an increase of $343 millions during the week that ended on January 03, 2009.

With the current upsurge, the country's foreign exchange reserves have mounted to $10.004 billion on 03 January 2009 as compared to $9.661 billion a week earlier. The major increase has been witnessed in the reserves held by the central bank as it showed an increase of $232 million during last week. The central bank reserves reached $6.601 billion on 03 January as compared to $6.369 billion on December 27, 2008.

Reserves held by the banks (other than SBP) also showed an increase of $111 million to $3.403 billion during the last week from $3.292 billion a week earlier.

RANA AAA

January 10th, 2009, 07:09 AM

MoU signed for electronics sector’s revival

Thursday, January 08, 2009
By our correspondent

LAHORE: Technology Upgradation and Skill Development Company (TUSDEC) and National Institute of Electronics (NIE) have signed a Memorandum of Understanding (MoU) with the objective of working together for the revival of the electronics sector in Pakistan.

According to a spokesman of TUSDEC, the agreement would provide an institutional framework to both organisations to jointly move on a fast-track basis to jump-start the electronics industry through a number of initiatives.

Under the agreement, TUSDEC and NIE would set up Common Facility and Training Centres (CFTCs) based on the concept of Electronic Manufacturing Services (EMS) to uplift the local industry by importing contemporary technology, machinery, obtaining training and skill enhancement together with practical production training. The proposed Electronics Complex at Lahore would focus on mobile phones and the telecommunications sector, while in Karachi it would focus on home appliances and consumer electronics.

Currently Pakistan’s electronics imports exceeded US$2.3 billion in the financial year 2007-08 with negligible exports, while mobile phones alone cost $1 billion. He lamented that Pakistan’s industry neither made a conscious effort to reduce imports nor enter into exports, ignoring a $2.4 trillion world market.

Director General NIE, Tariq Matin, hoped that partnership between TUSDEC and NIE would pave a way for significant development of otherwise neglected consumer electronics market. He also dilated upon NIE’s current and future projects.

source: http://thenews.jang.com.pk/daily_detail.asp?id=156079

RANA AAA

January 10th, 2009, 07:10 AM

Inflation likely to ease off during ’09

Staff Report

KARACHI: The consumer price based inflation is likely to ease off during 2009 after touching 30-year high during the 1QFY09, triggering a cut in interest rate.

The high inflation syndrome has left a crippling effect on the economy in general and particularly the common man, who was the worst victim of record inflation.

This expected downward trend in the inflation may trigger interest rate cut – though not immediate in the monetary policy statement at the end of the current month – in the coming months, believe the analysts.

Albeit inflation will be receding a bit but it would be still much higher from the official target of 12 percent set at the time of the federal budget.

Analysts were predicting it to settle around 20 percent since the start of current financial year.

“Higher base effect, oil prices reduction and declining commodity prices will be reflecting the receding trend in the inflationary pressures during the coming months,” analyst Muhammad Imran at First Capital Equities Ltd (FCEL) said.

In this regard, first indication of softening in inflationary numbers has already been observed in November 2008 when CPI was 12 basis points down on MoM basis and settled at 24.7 percent, he said and added that In December 2008 the inflation woul decline by 130 basis points MoM basis. “Yearly growth is likely to be 22.3 percent.”

“A pleasant surprise may be witnessed in June or July 2009 when the CPI could plunge to single digit,” Imran said.

Nonetheless, the very next Monetary Policy Statement (to be announced at the end of January 2009) may skip any announcement for cut in interest rate. However, general interest rate scenario is expected to show a sign of reduction.

Moreover, an interim cut in key policy rate (between Jan-Jul 2009) cannot be ruled out, Imran added.

source: http://www.dailytimes.com.pk/default.asp?p...10-1-2009_pg5_4

RANA AAA

January 13th, 2009, 05:52 AM

sami231

January 14th, 2009, 11:07 AM

Touching new highs : $673.50 million record remittances received in Dec

By Saad Khan

KARACHI: Pakistan’s overseas workers sent the highest-ever amount of $673.50 million as remittances in December 2008, beating the previous record of $660.35 million received in September 2008.

The amount of $673.50 million received in December 2008 showed an increase of $194.24 million, or 40.53 percent, when compared with $479.26 million received during December 2007.

Overall, in the first half (July-December 2008) of current 2008-09 fiscal year, the country received an amount of $364 billion as workers’ remittances as against $306 billion during the same period of the last fiscal year showing an increase of 18.71 percent. The amount of $364 billion includes $0.37 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The monthly average of remittances in July 2008 to December 2008 period comes to $606.67 million, up $95.61 million or 18.71 percent when compared with the corresponding period last year.

The inflow of remittances in the Jul-Dec 2008 period from USA, Saudi Arabia, UAE, GCC countries including Bahrain, Kuwait, Qatar and Oman, UK and EU countries amounted to $903.49 million, $714.90 million, $699.43 million, $596.54 million, $239.82 million and $111.41 million respectively as compared to $874.21 million, $563.06 million, $500.33 million, $457.21 million, $227.23 million and $88.99 million respectively in the Jul-Dec 2007 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first half of the current fiscal year 2008-09 amounted to $374.05 million as against $354.18 million in the same period last year.

During December 2008 remittances from UAE, USA, Saudi Arabia, GCC countries including Bahrain, Kuwait, Qatar and Oman, UK and EU countries amounted to $165.18 million, $136.37 million, $114.65 million, $100.33 million, $50.87 million and $30.39 million, respectively as compared to $77.33 million, $140.45 million, $81.25 million, $77.21 million, $29.82 million and $12.90 million in December 2007. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during December 2008 amounted to $75.66 million, up from $60.15 million received in the same month last year.

Workers remittances are the second largest source of foreign inflows in Pakistan. Research has shown that there is a link between the development of financial sector and remittances in the long run. There are a host of other important development variables—poverty, inequality, growth, education and infant mortality—which are effected by the inflow of remittances. Improvement in these variables develops the country’s human capital thereby developing the economy in the long run. The major problem with the inflow of remittances is that they are being sent back home through informal channels—hundi and hawala. It is estimated that the amount sent by means of informal channels is at least equivalent to the amount sent by formal channels. Experts believe if the government can tap this huge potential by improving the mechanisms of formal channel, this alone can lead to the aversion of any balance of payment crisis. Some of the measures which can attract inflows through the formal channels can be: quotas may be reserved for overseas Pakistanis in all government schemes for setting up agro-based and small-scale industries in different parts of the country; the Overseas Pakistanis Foundation should be made to play a more active role in the development of industrial estates; the terms governing holding non-residency foreign currency accounts and investments in financial assets may be made more liberal.

brightside.

January 14th, 2009, 03:41 PM

Our currency better not depreciate any further :mad:

sami231

January 16th, 2009, 04:37 PM

FDI surged by 45 percent

RIZWAN BHATTI

KARACHI (January 16 2009): The Foreign Direct Investment (FDI) has witnessed a raise of some 45 percent during December despite the looming clouds of war between Pakistan and India. The central bank on Thursday revealed that FDI has also crossed the mark of 2 billion dollars during December 2008 with a highest investment of 724 million dollars in a single month during the current fiscal year 2008-09.

"The surged in the FDI is a positive indication and reflected that confidence of foreign investors on Pakistan economy is still retained despite the tensions on Eastern boarders after Mombai attacks," economists said. They said that increasing FDI reflects that country's economic fundamentals are still strong despite several internal and external shocks and have ability to attract foreign investors.

Other economic indicators like foreign reserves and exports are also improving and would attract more investment in the future, they said. "With the current trend we are expecting that country's FDI would be around four billion dollars by the end of current fiscal year 2009", they added.

With an increase of some 260.95 million dollars, FDI has reached 2.2327 billion dollars during the first half of current fiscal year 2008-09 (July-December), as compared to 2.0663 billion dollars during the same period of last fiscal year 2008. Month-on-month basis the country has witnessed highest FDI in December as compared to other first five months of the current fiscal year, as foreign investors have invested some 724.28 million dollars in December 2008.

FDI has surged by some 45.18 percent to 2.32 billion dollars in December 2008, previously was stood at 1.603 billion dollars end of November 2008. Previously some 340.7 million dollars FDI registered in July 2008, 413.36 million dollars in August, 356 million dollars in September, 211 million dollars in October and some 282 million dollars in November 2008.

Although the FDI has presented a positive growth, however the portfolio investment has declined by 282 percent during the first half of 2009. Therefore, net foreign investment including FDI and portfolio investment (PI) depicting a slight decline of 1.43 percent.

Net foreign investment stood at 2.138 billion dollars during the July-December of the current fiscal year over the investment of some 2.1699 billion dollars at the same period of last fiscal year, depicting a dip of some 3.1 million dollars.

In addition, portfolio investment has declined to negative position of some 188.31 million dollars during the first half as against 103.66 million dollars in corresponding period of last fiscal year 2008. "The political uncertainty and instability in the country and negative reports regarding world stock markets are the major reasons of declining trend in the portfolio investment", economists said. They also hoped that after the end of tension between Pakistan and India foreign investors would further invest in Pakistan especially in equity market.

siamu maharaj

January 17th, 2009, 07:29 AM

sami231

January 17th, 2009, 01:20 PM

Pakistan's current account deficit narrows to $6.053 billion

KARACHI: Pakistan's current account deficit narrowed in the six months from July-December to $6.053 billion, compared to $7.269 billion in the same period last year, the central bank said on Friday. Analysts said it was mainly due to the decrease in international oil prices. Oil was trading at $36 a barrel on Friday compared to a record high of $147 in July last year. Analysts said this would ease pressure on the central bank to raise the discount rate in the near term. A six-month monetary policy meeting is due to be announced on January 31, the central bank said on Friday. The consumer price index in December was down 0.50 percent from November. The index, a key indicator of inflation, rose to 23.4 percent in December from previous levels, and was down from a 24.68 percent year-on-year rise in November.

spyk

January 18th, 2009, 04:46 AM

I've some lovely news for you guys. The price for CNG has been increased and there would be no reduction in petrol prices (which is wayyyy overdue). This was done coz the CNG association went to the gov. saying they would go out of biz. What a farce of a country this is. I have no words to describe what I feel right now. So now I'm paying for their bad biz decisions. Yes, it's my fucking fault coz everyone turned their houses into CNG stations, with 10 of them in a row. So now I can't have cheap petrol NOR cheap CNG. Way to go. I hope they all die in a CNG fire. Fuck them all. I hope their children rot in hell and get cancer.

This is good.

Petrol prices should be kept up. This will reduce our imports and improve our current account balance. It will also improve govts revenue collection and improve tax to GDP ratio. These are two of our biggest economic problems.

It will also encourage alternative energy use and less use of cars.

High CNG prices will reduce demand for gas, and, this is good because our gas reserves are depleting.

siamu maharaj

January 18th, 2009, 07:39 AM

This is good.

Petrol prices should be kept up. This will reduce our imports and improve our current account balance. It will also improve govts revenue collection and improve tax to GDP ratio. These are two of our biggest economic problems.

It will also encourage alternative energy use and less use of cars.

High CNG prices will reduce demand for gas, and, this is good because our gas reserves are depleting.
What a retarded post.

January 18th, 2009, 07:43 AM

HAHAHA! I was waiting for Siamu's reply to this.
Though I was expecting something much more harsher

January 18th, 2009, 08:07 AM

I've some lovely news for you guys. The price for CNG has been increased and there would be no reduction in petrol prices (which is wayyyy overdue). This was done coz the CNG association went to the gov. saying they would go out of biz. What a farce of a country this is. I have no words to describe what I feel right now. So now I'm paying for their bad biz decisions. Yes, it's my fucking fault coz everyone turned their houses into CNG stations, with 10 of them in a row. So now I can't have cheap petrol NOR cheap CNG. Way to go. I hope they all die in a CNG fire. Fuck them all. I hope their children rot in hell and get cancer.

We've pretty much ended our gas reserves by leaving our stoves lit and using those retarded gas geysers.

siamu maharaj

January 18th, 2009, 09:49 AM

That I know. I think I've on several occassions talked about us using gas like we have the biggest reserves in the world or soemthing. It's unbelievably cheap for no reason. And this is why we are the CNG cars capital. I've never understood why gas is so cheap in Pakistan. Most possibly coz there's no-one who knows how the prices should be set.

brightside.

January 18th, 2009, 06:24 PM

Gasoline/Petroleum prices should be kept where they are, this is a golden chance to reduce the current account deficit, why not take it? I'd much rather have the Dollar at 79-80 and pay the current price for gasoline rather than pay Rs. 35 at the pump and have the dollar at Rs. 150

siamu maharaj

January 18th, 2009, 06:51 PM

spyk

January 19th, 2009, 07:13 AM

I think everyone has seemed to miss the point where I said that the decision was taken solely to protect the CNG owners who went bitching to the government coz everyone thought it was a brilliant idea to convert 10 houses in a row to CNG stations. Also, oil is dirt cheap right now, so importing a lot of it won't make much difference. We'll have to import 5 times as much to have the same impact. Anyway, that wasn't the point of my post.

The effect of the price raise of CNG will be the same, regardless of what the motivation for it was. Our gas reserves are depleting rapidly and this could help slightly as it will reduce consumption.

So what if oil is below $40 a barrel? Even at $40 a barrel, we still have a massive current account deficit. You make it seem like there is no problem and we could lower the price and import 5 times more oil before running into trouble. That is not the case.

Secondly, think long term. It takes time to change society's habits. Our roads are overcrowded with cars. We consume more oil than we can afford. What about when global recovery starts and oil jumps up again to $100? You cant turn on a switch and magically expect things to change in an instant.

Also, I mentioned the thing about our low tax base. We need to jack up revenue collection big time.

Its like cigarettes. The real cost of a packet is probably only just a dollar. But the govt. charges 9 dollars, they collect a lot of revenue, people cut down smoking and their health improves and public money spent on health care is reduced. Everyone benefits!

RANA AAA

January 20th, 2009, 09:04 AM

Secy MoF hints at reduction in interest rate

ISLAMABAD: The interest rate may be reduced if the core inflation— currently 18 percent—drops to 15 percent, this was hinted by Dr Waqar Masood Khan, Secretary Ministry of Finance (MoF). During the meeting of National Assembly’s Standing Committee on Finance and Revenues, chaired by Fauzia Wahab, Dr Waqar said at present core inflation, which is inflation minus food and energy inflation, stands at 18 percent and if it comes down to 15 to 16 percent, the interest rate may be revised downwards. Inflation rate based on Sensitive Price Indicator is on decline and it is hoped the inflation based on Consumer Price Index (CPI) is also expected to come down. He said that decrease in money supply has been observed, aggregate demand in the economy is on decline and the government wants to bring down the interest rate for healthy economic activity. Responding to a question, he informed the members that loans based on Karachi Inter Bank Offered Rate (KIBOR) plus interest rates or KIBOR dominated are also witnessing increase in mark-up and when the KIBOR would come down the mark-up on such loans would automatically follow suit. “Decrease in inflation is a must for decrease in interest rates.” sajid chaudhry

source: http://www.dailytimes.com.pk/default.asp?p...10-1-2009_pg5_3

RANA AAA

January 20th, 2009, 09:06 AM

RANA AAA

January 20th, 2009, 09:06 AM

Ukraine offers technology transfer

Staff Report

ISLAMABAD: Ukraine has offered technology transfer in the fields of mineral, gas and health diagnostic system to Pakistan.

Ambassador of Ukraine Igor Pasco called on the Federal Minister for Commerce Makhdoom Amin Fahim in his office on Tuesday. The federal minister said, Ukraine is a big market for semi-finished goods and asked for strengthened trade relations with them.

There exists a big scope of cooperation, because both the countries are members of WTO. Pasco wished of technology transfer in the fields of mineral, gas and health diagnostic system.

The health diagnostic system could be used in backward areas of the country where hospitals are short. The health diagnostic system could overcome the dearth of dispensaries in the far-flung areas of the country up to a larger extent. Ukraine could use the Gwadar Port via Tajikistan for an easy access to the Gulf countries, the federal minister said.

Makhdoom Amin Fahim asked Trade Development Authority of Pakistan to start level playing field with Ukraine government for better trade links and commercial ties by starting initial meetings.

source: http://www.dailytimes.com.pk/default.asp?p...4-1-2009_pg5_11

RANA AAA

January 20th, 2009, 09:07 AM

Job plan for victims of recession urged

By Our Staff Reporter

KARACHI, Jan 13: The Small and Medium Enterprises Development Authority has been urged to come up with a plan for profitable self-employment occupations for overseas Pakistanis who are losing jobs due to recession and are planning to come back to Pakistan with their life-time savings.

Zulfikar Thaver, President, Union of Small and Medium Enterprises, invited the attention of the authority to the fact that many Pakistanis are losing their jobs due to downsizing by foreign financial and commercial institutions and are returning home with hopes that they could do their own small businesses.

He disclosed that the union has received many enquiries from prospective investors who are asking about the functions of the authority and what it was doing for newcomers and whether it was aware of the fact that those who have lost their jobs are desperately looking out for income-generation occupations.

He said that the authority should organise training programmes for small investors and provide vocational guidance in the different fields of services, trading and industry to accommodate victims of recession.

He said there are many avenues in services, trade and industry and the authority should identify profitable ventures in agro-based industries, energy, foodstuffs, leather and synthetics, especially value-addition items.

He said that there was room for value-addition in many commodities, such as spices, wheat, rice, pulses, vegetables, fruits and flowers and the Authority can play an important role in guiding prospective investors.

source: http://www.dawn.com/2009/01/14/ebr7.htm

RANA AAA

January 20th, 2009, 09:07 AM

Pak engineers’ team back from Kuwait with success

ISLAMABAD: The 10-member high-level Pakistan’s engineering sector delegation that visited Kuwait from January 5-8, 2009 was back home with strong business leads to work upon and convert these into exports within the next three to six months.

The first ever engineering sector delegation visit to Kuwait, organised by Engineering Development Board (EDB) in coordination with the Pakistan’s Mission in Kuwait, opened up many business development opportunities for the visiting companies in mega developmental projects coming up in Kuwait in the oil and gas, energy and infrastructure sectors. The delegation held a one-day seminar at the Kuwait Chamber of Commerce and Industry (KCCI) on the first day and held important meetings at the ministerial level including meetings at Ministry of Public-Works, Ministry of Housing, Ministry of Electricity and Water and Ministry of Communication during the visit. The seminar at the KCCI provided the much-needed platform to promote Pakistani engineering goods and capabilities to Kuwaiti companies.

Meetings at various ministries proved instrumental in getting information about upcoming projects, understanding requirements of participating in various projects and conditions for supply of products. The delegation also met members of Association of Pakistani Engineers in Kuwait (APEK), a strong platform of Pakistani engineers holding important positions in various organisations. The APEK termed the visit of the engineering sector delegation as first ever initiative in 30 years and assured of their all out support in Pakistan’s export development efforts in Kuwait.

The delegation was led by Chairman, State Engineering Corporation Maj Gen ® Zaheer Ahmad Khan and comprised prominent engineering companies from both public and private sector namely Pakistan Engineering Company (PECO), Huffaz Seamless Pipe, Descon Engineering, Newage Cables, PEL, National Power Construction Corporation (NPCC), Breeze Frost Industries and State Engineering Corporation representing its holding units like Heavy Electrical Complex. Most of these companies are now in the process of signing agreements with Kuwaiti partner companies, as per Kuwaiti law, to undertake engineering jobs in Kuwait.

Owing to encouraging response received from line ministries and private Kuwaiti companies, Pakistani companies were eyeing a good number of business enquiries to flow in during the month of January. The engineering goods and services that were in demand and Pakistani companies could offer in Kuwait’s market were pipes (seamless and ductile iron), valves, electrical cables, power and other electrical items. staff report

source: http://www.dailytimes.com.pk/default.asp?p...5-1-2009_pg5_14

RANA AAA

January 21st, 2009, 05:31 AM

what abt the petroleum prices in pak did they lowered the prices or not.

it a bit off topic question but i was searching for it but couldne found any news on it.

brightside.

January 21st, 2009, 06:26 AM

^^ Don't you go to fuel pumps regularly? No, they haven't cut the price and it doesn't look like they will for at least a month or two.

--------------------

World Bank blocks assistance on low Pakistan's ratings (http://www.brecorder.com/index.php?id=867088&currPageNo=1&query=&search=&term=&supDate=)

AHMED MUKHTAR

ISLAMABAD (January 21 2009): The World Bank has blocked lending for two key loans, of at least $834 million, market-based loans due to the country's low credit ratings, an official said. "This project will be placed on hold until further notice", says a WB document about the national expressway project.

And, about $200 million National Trade Corridor (NTC) Improvement Program, the Bank document says: "Pending improvement of the macro-economic situation, this project will be put on hold until further notice". The WB is processing 12 loans of $1258 million for Pakistan, of which, most are of IBRD (WB) or market based, and only around $200 million is concessional credit from IDA--a subsidiary of WB.

"After Pakistan's rating went too low, there was no option with the bank to block its aid, which is based on costly market based IBRD loans, and these two loans suffered it directly", said the official. Another $300 million IDA facility of Poverty Reduction Strategy Credit (PRSC) is under process, which is likely to be approved before June 2009. Advisor to PM on Finance Shaukat Tarin is hopeful to get this credit during the current quarter.

Standard & Poor's had fixed Pakistan's sovereign rating at CCC-plus in December 2008, and Moody's set B2 negative rating in September 2008. The two direct loans, hit by this low ratings, are National Expressway $634 million IBRD loan, and NTC program loan.

The list of World Bank's projects in pipeline for Pakistan includes $100 million IBRD Higher Education Support Program; $50 IDA million Mineral Sector Technical Assistance; $26 million IDA Thar Coal and Power Technical Assistance; $124 million IBRD Rural Telecommunications and e-Service; $100 million IDA Second Sindh Structural Adjustment; $50 million IDA Support to Safety Nets; $634 million IBRD National Expressways; $25 million IDA Trade and Transport Facilitation II; $200 million IBRD National Trade Corridor Improvement Program; $100 million Punjab Large Cities Development Policy; $120 million Second Punjab Barrages Rehabilitation and Modernisation.

brightside.

January 21st, 2009, 06:28 AM

Services sector faces deficit of $2.3 billion (http://www.brecorder.com/index.php?id=867122&currPageNo=1&query=&search=&term=&supDate=)
RIZWAN BHATTI

KARACHI (January 21 2009): The country has faced a deficit of 2.3 billion dollars in services sector mainly due to high payments of transportation, travel and finance during the first half of the current fiscal year 2009. Although, the deficit is some 30 percent less than the deficit faced in same period of last fiscal year 2008, in which services sector deficit stood at 3.29 billion dollars.

Central bank statistics revealed that overall Pakistan has earned 1.847 billion dollars on account of services sector exports against the imports of some 4.15 billion dollars during the first half of the current fiscal year, depicting a deficit of 2.303 billion dollars.

The imports went down whereas exports registered a positive growth during the first half. Imports of services sector have declined by 11 percent to 4.15 billion dollars in July-December of the current fiscal year as compared to imports of 4.687 billion dollars during the corresponding period of last fiscal year 2008.

Services sector exports have surged by 33 percent to 1.847 billion dollars in the first half of 2009 over the exports of 1.391 billion dollars in the same period of fiscal year 2008. Major contributor in services trade deficit was witnessed by transportation, travel, and financial services, as only transportation sector has contributed around 50 percent share in overall deficit faced by services sector during the first half.

Transportation sector has witnessed a deficit of some 1.3 billion dollars with import of 1.927 billion dollars and exports of some 590 million dollars during the July-December of fiscal year 2009. Similarly, some 633 million dollars deficit has been recorded in the travel services, as its imports stood at 745 million dollars against the export of 112 million dollars during the period.

Economists said that with government's efforts the services sector deficit is on the decline, which would also help to reduce the current account deficit. The declining trend in services sector deficit would also save the country's foreign reserves, they added. Economists said the country does not have any shipping line except the one flag carrier Pakistan National Shipping Corporation (PNSC).

Therefore exporters and importers are compelled to hire and pay to the international shipping lines, which resulted in the transportation deficit increasing gradually. However, they hoped that during current fiscal country's services deficit might be lower than last fiscal due to decline in imports and increase in exports.

brightside.

January 21st, 2009, 07:19 AM

http://epaper.dawn.com/Web/Article/2009/01/21/003/21_01_2009_003_009.jpg

brightside.

January 21st, 2009, 07:33 AM

http://epaper.dawn.com/Web/Article/2009/01/21/009/21_01_2009_009_010.jpg

brightside.

January 21st, 2009, 07:40 AM

The effect of the price raise of CNG will be the same, regardless of what the motivation for it was. Our gas reserves are depleting rapidly and this could help slightly as it will reduce consumption.

So what if oil is below $40 a barrel? Even at $40 a barrel, we still have a massive current account deficit. You make it seem like there is no problem and we could lower the price and import 5 times more oil before running into trouble. That is not the case.

Secondly, think long term. It takes time to change society's habits. Our roads are overcrowded with cars. We consume more oil than we can afford. What about when global recovery starts and oil jumps up again to $100? You cant turn on a switch and magically expect things to change in an instant.

Also, I mentioned the thing about our low tax base. We need to jack up revenue collection big time.

Its like cigarettes. The real cost of a packet is probably only just a dollar. But the govt. charges 9 dollars, they collect a lot of revenue, people cut down smoking and their health improves and public money spent on health care is reduced. Everyone benefits!

As is mentioned in the article a couple of posts above this one, due to the massive depreciation in the Pakistani Rupee, our country has not really benefited from the drop in oil prices, so it makes sense to keep the fuel prices where they are right now.

As for the jampacked roads, I think it's high time the government somehow finds a way to construct a comprehensive metro network across Karachi at the very least. It would probably make the government a profit and save lots of unnecessary fuel burnt by people in daily traffic jams during their commutes.

January 21st, 2009, 01:00 PM

http://epaper.dawn.com/Web/Article/2009/01/21/009/21_01_2009_009_010.jpg

On the one hand they are saying that load-shedding problem has hit the country so hard, exports are declining, industries are being closed, and on the other hand exports are increasing and that quite significantly?

Or were the exports down before 6 months that now it seems the rise is significant

Indus

January 21st, 2009, 03:00 PM

It seems like Pakistan's economy is recovering. And the current government isn't responsible for it. Although they will say they are.

taseer121

January 23rd, 2009, 06:28 PM

ISLAMABAD: In a major policy shift, Pakistan has decided to seek $50 to $60 billion assistance from the Friends of Pakistan (FOP) forum for four major areas including economic and financial issues, terrorism-related matters, energy sector and mega development projects, it is learnt.

Instead of asking the FOP forum to provide funds only for 71 development projects, Islamabad has now decided to broaden its strategy to include all kinds of areas liked by donors in its wish list rather than restricting them to investment in mega development projects.

A stumbling block in attracting investment as well as financial assistance from the donors is confusion in Islamabad whether to pursue donors from the FOP forum or Pakistan Development Forum (PDF) or donors’ conference because all multilateral as well as bilateral donors on these three forums are similar. It does not seem feasible to approach all these forums simultaneously, added the sources.

When Adviser to Prime Minister on Finance Shaukat Tarin was contacted for comments on Thursday, he said that the government has identified four areas for seeking assistance from the FOP forum. “These four areas are economic and financial assistance, security-related assistance, energy cooperation and undertaking of development projects,” he added.

The finance adviser also said that a technical-level meeting of the FOP forum would be held by the end of January or early Feb in Islamabad. “But the ministerial level meeting of the FOP will be held by March probably in Tokyo,” he added.

Earlier, Pakistan had tabled 71 development projects before the Friends of Pakistan forum meeting held in Dubai but the donors’ response was lukewarm as they termed it a ‘wish list’ or a ‘long shopping list’. Keeping in view the response, Islamabad has transformed its strategy to give an opportunity to various donors to help Pakistan in areas where they desire to invest in years ahead.

However, the sources admitted that it was not a right approach to table 71 development projects before the donors on which huge investment in terms of money as well as time is required. It was the decision of the Planning Commission to seek assistance for 71 projects but now the input of finance ministry was also taken, resulting in expansion of Islamabad’s strategy for the FOP forum.

A detailed feedback obtained by Pakistan’s Foreign Office as well as Economic Ministries in the aftermath of last FOP meeting held on November 17, 2008 at Abu Dhabi spells out in details about the prevailing thinking of developed world, which clearly states that if Islamabad did not prioritise its list, the member countries would remain non-committal to come forward to undertake these projects owing to worldwide financial crisis, whose brunt was feeling by all the developed countries.

The donors are also suggesting Pakistan to formulate short-term, medium-term and long-term strategies in accordance with importance of the projects.

The best way should be to adopt an incremental approach because it would not be possible for the member countries to commit everything on the long demand list immediately.

Official documents state that the donor countries appreciated the initiative to meet two major challenges Pakistan is confronting namely security issues and economic crisis.

The donor countries also raised objections on duplication of work, saying that the Friends of Pakistan and Pakistan Development Forum (PDF) are more or less the same. The donor countries in PDF are also similar so either these two forums are merged together or existing PDF may be reactivated.

“The PDF meetings are an annual event but no such meetings have taken place for the last two years,” the donors’ response further stated.

It was pointed out that since Pakistan needs long term development assistance, it is necessary to highlight economic, political and administrative constraints for devising strategies. “There are no credible data available on necessary facts sheet is available to the international community on Pakistan’s economic situation,” they added.

The donors’ countries during the meeting were not briefed about the possible impact of the IMF program on the economy and its impact on the general masses of Pakistan.

“Pakistan may request the IMF to circulate all concerned countries, along with necessary data and fact sheet about Pakistan, highlighting the likely impact of IMF package on overall economy of Pakistan as well as the report may also recommend an additional funding to Pakistan,” it concluded.

siamu maharaj

January 23rd, 2009, 08:22 PM

That's like half the size of our economy.

laurus

January 23rd, 2009, 11:56 PM

Some economic figures for 2008, according to the CIA World Factbook:

Pakistan

GDP (purchasing power parity):
$454.2 billion (2008 est.)
GDP (official exchange rate):
$160.9 billion (2008 est.)
GDP - real growth rate:
4.7% (2008 est.)
GDP - per capita (PPP):
$2,600 (2008 est.)

https://www.cia.gov/library/publications/the-world-factbook/geos/pk.html#Econ

brightside.

January 25th, 2009, 08:22 AM

Industrial output down 5pc July-Nov 2008 (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/industrial-output-down-5pc-july-nov-2008-szh)
By Mubarak Zeb Khan
Thursday, 22 Jan, 2009 | 11:08 PM PST |

http://www.dawn.net/wps/wcm/connect/66ceee004cc29091964e9f3a485aecc8/factories_400.jpg?MOD=AJPERES

ISLAMABAD: Pakistan’s industrial output declined by over five per cent in the first five months of the current fiscal year in the wake of international financial crisis, sparking fears of massive layoffs, particularly in the electronic and textile industries, officials told Dawn on Friday.

The fall out of the global crisis coupled with the home-grown policies - including highest-ever interest rates and lack of energy availability - slowed down the manufacturing in the current fiscal year which may also ultimately affect the economic growth.

Due to the slump in the industrial sector, particularly in the large-scale manufacturing (LSM), the government has already witnessed decline in revenue collection and slowing down in exports proceeds, which registered negative growth in the month of December 2008.

Many sub-sectors of the LSM did not perform well during July-Nov, particularly electronic goods, textile related goods indicating that the 6.1 per cent LSM growth target set for 2008-09 is unlikely to be achieved.

The World Bank and IMF have already said that Pakistan’s economy is facing difficulties which will be aggravated by the global crisis. Massive layoffs in textile and electronic industries are feared in the next few months.

Statistics showed that textile exports already dropped by around two per cent during the first half year of the current fiscal year over last year. Any drop in production or exports is signaling massive layoffs, particularly those people who are working on daily wages to feed the families.

Data compiled by the federal bureau of statistics showed that production of cotton yarn declined by 0.31 pc, cotton cloth 0.49 pc and power-looms 48.03 per cent during the first five months of the current fiscal year over last year.

All major electrical production witnessed negative growth as refrigerators recorded a negative growth of 0.23 pc, deep-freezers 26.02pc, air-conditioners 10.52pc, electric bulbs 22.91pc, electric tubes 16.68 pc, electric fans 2.63 pc, electric motors 24 pc, electric meters 19.93 pc, switch gears 3.59pc, electric transformers 0.14pc, TV sets 30.53pc and bicycles 12.25 pc during the period under review.

An official in the industry ministry said industrial production has been adversely affected by the crisis through both price effects that increase the cost of production and income effects that decrease the demand for products in the markets.

The severe power shortage and highest-ever increase in energy prices also further fuel the crisis, which led to cuts in production, particularly in the textile based industries resulting into lower exports.

Federal Minister for Industries Mian Manzoor Wattoo on Thursday informed the Senate standing committee that his government was committed to revive the industrial sector by addressing the core issues plaguing the industry.

However, he did not mention the measures to arrest the decline in the manufacturing sector and a possibility of coming up with an industrial policy in the near future.

Secretary industries Shahab Khawaja meanwhile attributed the fall in the industrial output to highest ever interest rates, high input cost, power and gas outages.

In the food group, the production of vegetable ghee dipped by 13.83 per cent during the first five months of the current fiscal year followed by cooking oil 4.05 pc, wheat and grilling 11.19 per cent during the period under review.

It is feared that as a result of decline in industrial output, the import bill of consumer and electronic goods swelled during the period under review, which would also put pressure on the balance of payment.

The industrial growth had been shrinking for the last three years as it grew by 5.4 per cent in the year 2007-08 down from 19.9 pc growth recorded in the year 2004-05 owing to capacity constraints and high cost of doing business that resulted into closure of many units.

brightside.

January 25th, 2009, 08:25 AM

Services exports posts impressive growth (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/services-exports-posts-impressive-growth-szh)

Thursday, 22 Jan, 2009 | 11:05 PM PST |

http://www.dawn.net/wps/wcm/connect/cc8886004cc29a52ad79ff538a22f381/chundrigar_400.jpg?MOD=AJPERES

ISLAMABAD: Services sector export up by 42.01 per cent in the first five months (July-Nov) of the current fiscal year over the same months last year.

Federal Bureau of Statistics data issued here on Thursday showed that proceeds from services export totaled $1.533 billion against $1.079 billion over last year.

The upward trend in the services exports has followed greater market access for financial, telecom and tourism etc.

The import of services, meanwhile, recorded a decline by 8.40 per cent to $3.935 billion during July-Nov against $3.923 billion last year.

However, the services imports witnessed a deeper cut of more than 40 per cent in the month of November 2008 over last year month. But the exports of services recorded a marginal growth of 6.07 per cent over the same month last year.

brightside.

January 25th, 2009, 08:29 AM

New plan to increase farm tax collection (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/new-plan-to-increase-farm-tax-collection--il)
By Sajid Gondal
Saturday, 24 Jan, 2009 | 01:25 PM PST |

ISLAMABAD: The Federal Board of Revenue (FBR) has finalised a framework for improving the mechanism of tax collection from the agriculture sector from the next fiscal year, officials told Dawn on Friday.

Tax collection from the agriculture sector is proposed to be raised to around Rs70 billion in the first year of implementation from the current collection of Rs2 billion.

A senior official in the FBR said that the actual potential of tax collection from the sector is estimated at Rs200 billion.

Though the agriculture tax is a provincial subject, the FBR would extend its technical assistance to provincial land revenue departments in the collection of the levy.

Statistics showed that collection of agriculture income tax by provinces stood at Rs2 billion last year while contribution of the agriculture sector in the GDP was about 22 per cent.

According to the official, low taxes from the agriculture sector indicated that the entire value-added chain in the agriculture sector was nearly exempted from taxes.

The FBR official said that the Fiscal Research and Statistics Wing of FBR has prepared a framework according to which agriculture income tax would be collected on the basis of income generated from the sale of agriculture produce.

He said that the advisor to Prime Minister on Finance Shaukat Tarin in a meeting with the FBR chairman Waqar Ahmed has discussed the framework, and the advisor agreed to take up the issue with the prime minister for approval.

The official said the framework laid down the mechanism and percentage of taxes on different crops. FBR would appoint its officials in the land revenue departments under the proposed framework, added the official.

Presently, the provincial governments are collecting tax but not on the income earned through the crops sale.

As per land revenue act, the non-irrigated area up to 25 acres was exempted from income tax and the irrigated area up to 12.5 acres was exempted from the tax.

Provincial governments charge Rs150 per acre from the irrigated area and Rs100 per acre from non-irrigated land. Therefore, the FBR estimates that it could generate Rs70 to Rs80 billion additionally through collection of tax on the basis of income as compared to the ‘land basis’ formula.

According to FBR official, the agriculture income tax would be collected at the stage when farmers would bring crops for sale at various points, for instance dealers, mills and Trading Corporation of Pakistan.

The laid down framework also analyzes the expenditure that will occur on collection of agriculture income tax, the official said and added that the tax collection cost would be lesser than the provincial land revenue departments currently spending on the collection of agriculture tax.

spyk

January 25th, 2009, 08:55 AM

Services exports posts impressive growth (http://www.dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/news/business/services-exports-posts-impressive-growth-szh)

Wow. Our service sector seems to be much better than our good for nothing valueless textile sector which has taken in billions of subsidies yet has not offered anything.

I wonder what the breakdown of our service sector imports are, and, which are the biggest sectors.

Financial services?

IT?

Naresh

January 25th, 2009, 11:34 AM

Wow. Our service sector seems to be much better than our good for nothing valueless textile sector which has taken in billions of subsidies yet has not offered anything.

I wonder what the breakdown of our service sector imports are, and, which are the biggest sectors.

Financial services?

IT?

secularpakistan Ji :

Aap Ki Seva Mein :

EXPORTS AND IMPORTS OF GOODS & SERVICES – As published on 22 January 2009 (http://www.sbp.org.pk/ecodata/ExportsImports-Goods.pdf)

Cheers:cheers:

siamu maharaj

January 26th, 2009, 06:45 AM

secularpakistan Ji :

Aap Ki Seva Mein :

EXPORTS AND IMPORTS OF GOODS & SERVICES – As published on 22 January 2009 (http://www.sbp.org.pk/ecodata/ExportsImports-Goods.pdf)

Cheers:cheers:
Are you a spy or what? You scare me!

Naresh

January 26th, 2009, 11:32 AM

Are you a spy or what? You scare me!

siamu maharaj Ji :

No, not at all Distinguished Interlocutor Ji. I am a keen observer of the shenanigans of the Leadership of the Indian Sub-Continent wherein the Leaders of our Individual Countries try to outdo the Leaders of the neighbouring countries for their Individual Glory, Luxury, Pomp and Wealth etc.

Try and go through the Indian Government Web Sites and you will come to know of the Humongous Financial Burden being imposed on the "Aam Janta" i.e. Common Man and of course Woman and Children of India by way of a Huge National & Provincial Debt and an Uncontrollable Spiralling Negative Balance of Trade.

Meantime some Financial-Economical Information :

Foreign debt to swell to $51.5 bn (http://www.thenews.com.pk/top_story_detail.asp?Id=19893)

Khalid Mustafa

ISLAMABAD : Pakistan’s external debt is to alarmingly swell to $51.5 billion by the end of the ongoing fiscal year 2008-09 with rise in debt of 16 per cent if compared with foreign debt of $46.5 billion in the last fiscal year.

The public debt of the country will climb by 20.5 per cent to Rs1.3 trillion in toto that includes Rs900 billion foreign debt and Rs400 billion domestic debt, a senior official in the Ministry of Finance told The News.

The county headed by President Asif Ali Zardari will witness the 16 per cent rise in external debt only in fiscal year 2008-09, which the country experienced in the last eight years. The major factor in 16 per cent rise in foreign debt is moving the International Monetary Fund (IMF) for a bailout package of $7.6 billion. “This has virtually reversed the declining trend in debt to GDP ratio,” the official said. During this fiscal year, the country will get $4.6 billion from the IMF in three instalments by June 2009, $1 billion and $500 million from the World Bank and $500 million from the Asian Development Bank, and $400 from other IFIs, meaning Pakistan will get $7 billion in the current financial year. Pakistan will have to pay $3.1 billion as debt servicing this year, which will increase to $3.5 billion in the next fiscal year.

Prior to moving the IMF, the sharp downslide of rupee against the US dollar has made an alarmingly whopping addition of around Rs900 billion to public debts without any additional borrowing of even a single penny.

“Depreciation of the currency by just one rupee against US dollar enhances the public debt by Rs46 billion,” the official said. In Musharraf regime dollar-rupee parity was at 1:60, but when the PPP took the driving seat, rupee started sliding down because of the poor foreign exchange reserves and at one time dollar-rupee parity reached at 1:84. Owing to this factor the government’s national debt swelled by Rs900 billion.

To a question the official said that the GDP growth is expected to be at 2 per cent keeping in view the bumper crop of wheat and in case agriculture does not perform for any reason, the country’s GDP would be in negative zone.

This will hurt the capacity of the country to retire the huge debt. With high discount rates in the country, most of the businesses have gone into the red zone. With 2 per cent GDP performance, FBR will not be able to increase the tax to GDP ratio, which right now stands at 10 percent. It means that the country’s revenue would not be able to maintain the debt servicing. “This may lead to an embarrassing situation in the years to come for the country,” the official opined.

Note : This is “being” Economical with the truth as is evident from the following Link :

International Investment Position – net : Stock as on 31-12-2007 (R) - USD (50.883) Billion (http://www.sbp.org.pk/ecodata/Invest_pk.pdf)

In the Calendar Year 2007 the Direct Investment in Pakistan Increased by USD 11.939 Billion and the Portfolio Investment Increased by USD 2.655 Billion.

It would be interesting to know as to where this USD 14.594 Billion was Invested-Utilized

In addition it is to be noted that the Rise of External Debt from USD 46.5 Billion to 51.5 Billion is only 10.75 Per Cent and not 16 Per Cent as claimed in the first Paragraph of the Article.

Cheers:cheers:

taseer121

January 26th, 2009, 07:19 PM

^^ Naresh there is nothing to be cheering about!!

taseer121

January 26th, 2009, 10:23 PM

Recovery phase continued on the interbank market at the week-end as the rupee looked ahead versus dollar, gaining 30 paisa for buying at 79.00 and it also rose by 35 paisa for selling at 79.05, dealers said. As a result of dollars' selling, supply was improved and helped the rupee to re-gain its value, they said adding that exporters' dollar selling was also a positive factor behind the rupee firmness versus the US currency.

Commenting on the future direction, some currency viewers were of the opinion that the rupee may face modest devaluation in terms of dollar. In fact, textile exports fell by 14 percent in the month of December, which is the source of earning 60 percent of foreign exchange, they observed.

Besides, the banks will start oil payments from the next month, all these factors are indicating that the dollar demand will rise in the coming days, they said. At the weekend the US dollar touched a 23-year high against sterling and a six-week high versus euro as weak UK and eurozone data led investors to take refuge in the greenback. The dollar pared gains in late trading in New York as US stocks rebounded and crude prices surged, easing some risk aversion.

OPEN MARKET RATES: The rupee held its overnight firmness, gaining 30 paisa against dollar for buying at 79.20 and it also rose by 10 paisa for selling at 79.60, they said. The rupee, however, failed to perform the same in relation to euro, falling down by 20 paisa for selling at Rs 103.00 and also dipped by Re. one for selling at Rs 105.00, they said.

:cheers:

RANA AAA

January 27th, 2009, 09:06 AM

^^ Naresh there is nothing to be cheering about!!

U should be saying Naresh Ji :)

oogabooga

January 27th, 2009, 04:02 PM

^^ Naresh there is nothing to be cheering about!!

Relax Dude! Naresh Bhai puts that smiley at the end of all his posts. He is a respected member of this forum with valuable contributions, so chill. :yes:

Naresh

January 27th, 2009, 08:01 PM

U should be saying Naresh Ji :)

RANA AAA Ji :

:hug:

Relax Dude! Naresh Bhai puts that smiley at the end of all his posts. He is a respected member of this forum with valuable contributions, so chill. :yes:

oogabooga Ji :

Thank you for the Flattery but a "Bit" of Bribe - in today's "Credit Crunch" Conditions - would be gratefully received and faithfully applied!

Pakistan receives $601m from China, US (http://www.dawn.com/2009/text/ebr3.htm)

Shahid Iqbal

KARACHI, Jan 26 : The foreign exchange reserves have climbed above $10 billion after inflow of $500 million from China and $101 million logistic disbursement from the US for ongoing war on terror, better placing the country to achieve exchange rate stability and meet current account deficit.

“The State Bank of Pakistan received $500 million soft loan from China on Friday,” SBP Spokesman Syed Wasimuddin told Dawn on Monday. It has pushed up the reserves much above the $10 billion mark, a sign of moderate strength for exchange rate market.

Currency experts said the reserves would rise further amid falling demand for the US dollars. “We have supplied $900 million during the last three months to the inter-bank market,” said Malik Bostan, President of Forex Association of Pakistan.

He said the drying demand for the US currency had allowed the currency dealers to supply their surplus to the inter-bank market.

The rupee, which has lost around 23 per cent of its value, has been hovering around Rs79-80 to a dollar for the last couple of months.

Official sources confirmed that $101 million had also been received, but the SBP spokesman declined to confirm it. The amount was reimbursed by the United States in return of logistics provided by the country.

The sources hoped the reserves would mount to Rs10.5 billion after the International Monetary Fund releases second tranche of $750 million in March.

The country had to take bitter pills for securing $7.6 billion stand-by loan facility from the IMF to build its reserves to avoid default on foreign payment obligations. The first tranche of $3.1 billion had been received in the mid of November 2008.

Analysts said despite reasonable strength of the foreign exchange reserves, the country was still under pressure of current account deficit.

The trade and current account deficits however shrank during the first six months (July-December) 2008-09. The current account deficit declined by 16.7 per cent in the first half, while it dropped by 42 per cent in December 2008 compared to the corresponding period of last year.

They said that fall in oil and other commodity prices and global economic slowdown were the major reasons which impacted the country’s external trade resulting in drop in current account deficit.

“Bumper wheat crop this season, falling international oil prices and sharp fall in import of auto-parts and accessories for assembling vehicles by the auto makers will further reduce the import bill of the country,” said an analyst.

“Besides the remittances have improved by 20 per cent during the last six months that is highly encouraging for the government which is striving hard to deal with the twin deficits,” the analyst added.

Cheers:cheers:

sami231

January 28th, 2009, 01:45 AM

Naresh

January 29th, 2009, 12:24 PM

]Islamabad to propose $30 billion projects to Friends of Pakistan (http://www.dailytimes.com.pk/default.asp?page=2009/01/29/story_29-1-2009_pg7_36)

* Planning Commission deputy chief says Pakistan expecting grants worth $600 million in next few years

Sajid Chaudhry

ISLAMABAD : The Planning Commission (PC) has shortened its proposed project list for the Friends of Pakistan forum from $46 billion to $30 billion, Sardar Assef Ahmed Ali, deputy chairman of the PC told Daily Times on Wednesday.

An expert-level meeting of the forum is scheduled in Islamabad on February 21-22 and a ministerial meeting of the Friends of Pakistan is likely to be held in Tokyo in March. Explaining a three-pronged-startegy, adopted for ensuring financing from donor countries, Assef said Pakistan would prefer grants for social sector development projects, foreign direct investment (FDI) under public-private partnership for mega projects, and soft loans for projects where the first two options are found unfeasible.

He said that the government had decided to go ahead with the Bhasha-Diamir Dam, and it would be completed through financing from the Public Sector Development Programme, as well as foreign investments. The government would provide finances for the dam’s civil works and foreign investors would be invited to invest in setting up power generation facilities at the facility.

Grants : Briefing on other key social sector projects, the deputy chairman said Pakistan was expecting grants worth $600 million in the next few years, as the Friends of Pakistan were interested in investing in the social sector development.

He said a key project regarding human resource development was being finalised, which would aim at establishing technical training centres in several districts of the country. He said around 250,000 youth would be trained in 10 areas in six-month sessions. Nursing colleges would also be established at each divisional centre, which would award a Bachelors degree to the students.

For improvements in the agriculture sector, the government would initiate seed hybridisation and drip irrigation and efficient water usage technologies, Assef said, adding the government had also planned to add 1 million tonnes to the storage capacity to curtail crop losses. To save $4 billion in freight charges, the government would develop the maritime sector and around 100 ships would be added to the existing shipping fleet in the next five years.

Cheers:cheers:

Indus

January 29th, 2009, 02:28 PM

Pakistan signs $500m loan pact with WB

Daily Times Monitor

LAHORE: Pakistan has signed a $500 million loan agreement with the World Bank (WB) in a bid to stabilise the country and alleviate poverty.

The signing ceremony was held at the Economic Affairs Division in Islamabad, a private TV channel reported on Tuesday.

According to the channel, the International Development Association (IDA) of the World Bank – which provides soft loans to developing countries – has lent the sum on ‘nominal service charges’.

According to the agreement, the maturity period of the loan is 35 years, with a grace period of 10 years, said the channel.

The loan will be transferred to Pakistan in a single tranche after the approval of the WB board, which is scheduled to meet on February 15, it added. Prime Minister’s Adviser on Finance Shaukat Tareen attended the signing ceremony.

Pakistan is getting loans from everywhere. They keep on creating debts. This means that Pakistan will never get out of their debts unless they start recording economic growth of 10+% the next decades.
I don't see that happening because we don't have a system that supports this kind of growth. We have a lot of illiterate people, no masterplans, no reliable politicians and thus no reliable people and so on and on.

Naresh

January 29th, 2009, 11:55 PM

Reserves mount to 5-month imports bill (http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/30-Jan-2009/Reserves-mount-to-5month-imports-bill)

JAVED MAHMOOD

KARACHI - The foreign exchange reserves of Pakistan have increased almost equal to five months imports bill.

At present, the total foreign exchange reserves of Pakistan are slightly higher than 10 billion dollars while in October last year, the reserves fell below the two months requirement of imports.

In October, the foreign exchange reserves fell around 6.50 billion dollars out of which the reserves available with the State Bank of Pakistan at that time were at 3.1 billion dollars against the monthly imports of 3.25 billion dollars (in September 2008).

Official sources said that from November last year (after the approval of IMF loan), on the one hand the foreign exchange reserves of Pakistan have improved while on the other the quantum of the monthly imports bill has declined sharply.

For example in September last year the imports surged to 3.25 billion dollars while in December 2008 the imports squeezed to 2.12 billion dollars.

Official sources said that in January the imports are expected to squeeze further because of fiscal measures taken by the government to restrict the penetration of imports of non-essential items and to alleviate the imports bill.

Official sources said that the current national foreign exchange reserves are higher much than the anticipation of the International Monetary Fund officials. The IMF gave target to the government to raise foreign exchange reserves to 8.6 billion dollars by June 2009, but the reserves have inflated to over 10 billion dollars.

Sources said that the adviser to prime minister on finance Shaukat Tarin and his team are making efforts to build the forex reserves to above 12 billion dollars by June 2009. They said that before June 2009 the economic team of the government was in a bid to raise foreign exchange from the donors agencies and major donor countries. In the meeting of the Friends of Pakistan, the government would present billions of dollars worth different development projects, said sources, adding the adviser has asked the authorities concerned to right-size the list of development projects that would be presented before the Friends of Pakistan to obtain financial assistance.

In September 2008 the trade deficit once again reflected 62.13 per cent alarming growth while the imports marked 39.20 per cent growth, dashing the government’s hopes of trimming these two indicators. In August last year the government raised customs duty to decelerate growth of non-essential items import while the State Bank of Pakistan ordered the 100 per cent cash margin requirement for opening the letter of credit for the imports of unnecessary items, classified by the government as non-essential items. Finally this strategy has yielded positive results and the imports and trade deficit have started shrinking, leading to a pleasant relief to government in stabilizing the reserves.

In six months of this fiscal the trade deficit has reflected 15.27 per cent growth and amounted to 9.55 billion dollars, from 8.292 billion dollars in the corresponding period of last fiscal.

However, in the second half of this fiscal the trade deficit and imports are set to nosedive sharply that would support the reserves.

Worth noting is that in last two and a half financial years the country had lost a hefty amount of over 42 billion dollars in the shape of trade deficit, 13.20 billion dollars in FY07, 20 billion dollars in FY08 and 9.559 billion dollars in six months of this fiscal

Cheers:cheers:

Naresh

January 30th, 2009, 01:08 AM

Forex reserves cross $10bn mark again (http://www.thenews.com.pk/daily_detail.asp?id=159853)

KARACHI : The country’s foreign exchange reserves have once again crossed the mark of $10 billion, State Bank of Pakistan (SBP) announced in its weekly forex report on Thursday. Forex reserves rose by $259.2 million or 2.6 per cent to $10,207.9 million on Jan 24 compared to $9,948.7 million on Jan 17, the SBP notified. Farhan Rizvi at JS Research said that the country’s reserves improved beyond $10 billion owing to $500 million soft loan from China and $101 million logistic disbursement from the US for the war on terror. Break-up shows foreign reserves held by the SBP increased to $6,872.9 million during the week ended on Jan 24 as compared to $6,584.6 million last week. Net foreign reserves held by banks (other than SBP) reduced to $3,335 million against $3,364.1 million last week.

Cheers:cheers:

HereWeGo

January 30th, 2009, 04:11 AM

Indus

January 30th, 2009, 11:34 AM

i don see the point of celebrating an increase in foreign reserves as a result of increased loan...

Economic progress can only be possible if the governement can fix the crisis otherwise known as "suicide bombings"... Foreign Investor confidence is a must...
Power is another area that requires immediate attention....

btw i am not a pakistani...this is just what i think Pakistan should be doing and may be i am just stating the obvious.... however as a well wisher of The entire Indian Subcontinent it gives me immense pain when i see nothing concrete being done to fight these probems..

Yeah that is what I think too. But where are you from?

spyk

January 30th, 2009, 06:46 PM

i don see the point of celebrating an increase in foreign reserves as a result of increased loan...

Economic progress can only be possible if the governement can fix the crisis otherwise known as "suicide bombings"... Foreign Investor confidence is a must...
Power is another area that requires immediate attention....

btw i am not a pakistani...this is just what i think Pakistan should be doing and may be i am just stating the obvious.... however as a well wisher of The entire Indian Subcontinent it gives me immense pain when i see nothing concrete being done to fight these probems..

Foreign investor? What foreign investors. There are no foreign investors in the emerging economies at the moment. This situation will remain unchanged for quite some time.

So, emerging economies cannot wait for FDI to prop up their economies.

Expect Pakistans economy to start recovering in Q4 of 2009.

abidi2009

January 30th, 2009, 08:31 PM

And what about foreign debt??

abidi2009

January 30th, 2009, 08:33 PM

Very sad to say that, as pak govt is borrowing money, a time will come when the debt will reach to 50% of our GDP!!

abidi2009

January 30th, 2009, 08:37 PM

And foreign debt was not increased in Musharraf's tenure!! And rupee was also not depreciated in 8 years of Musharraf's rule, and i am telling u Mushi has future in pak politics!!

Indus

January 30th, 2009, 09:49 PM

And foreign debt was not increased in Musharraf's tenure!! And rupee was also not depreciated in 8 years of Musharraf's rule, and i am telling u Mushi has future in pak politics!!

Musharraf will not return to politics.

Naresh

January 30th, 2009, 10:52 PM

International Investment Position – net : Stock as on 31-12-2007 (R) - USD (50.883) Billion (http://www.sbp.org.pk/ecodata/Invest_pk.pdf)

abidi2009 Ji :

From the above Link you will notice :

International Investment Position - net - in U S Dollar Billions

Stock as on 31-12-2003 (R) : (27.197)

Stock as on 31-12-2004 (R) : (28.264)

Stock as on 31-12-2005 (R) : (29.525)

Stock as on 31-12-2006 (R) : (35.619)

Stock as on 31-12-2007 (R) : (50.883)

Thus the “Real” External Debt (all Foreign Investment Inwards are “Debt”) "Increased" in the Calendar Year 2006 by US Dollars 6.094 Billion and by USD 15.264 Billion in the Calendar Year 2007.

Cheers:cheers:

calyps

January 31st, 2009, 12:43 AM

Foreign investor? What foreign investors. There are no foreign investors in the emerging economies at the moment. This situation will remain unchanged for quite some time.

So, emerging economies cannot wait for FDI to prop up their economies.

Expect Pakistans economy to start recovering in Q4 of 2009.

big economies don't have money to invest these days!!!

Intoxication

January 31st, 2009, 06:03 AM

abidi2009 Ji :

From the above Link you will notice :

International Investment Position - net - in U S Dollar Billions

Stock as on 31-12-2003 (R) : (27.197)

Stock as on 31-12-2004 (R) : (28.264)

Stock as on 31-12-2005 (R) : (29.525)

Stock as on 31-12-2006 (R) : (35.619)

Stock as on 31-12-2007 (R) : (50.883)

Thus the “Real” External Debt (all Foreign Investment Inwards are “Debt”) "Increased" in the Calendar Year 2006 by US Dollars 6.094 Billion and by USD 15.264 Billion in the Calendar Year 2007.

Cheers:cheers:

He was talking about External Debt as a percentage of GDP, which did decrease during the time Musharraf was in charge. It doesn't matter if the External Debt/Foreign Debt rose in absolute Dollar terms, thats not important, whats important is whether it rose or declined as a percentage of GDP.

In a moment I'll provide you with some figures.

Pakistan's external debt and liabilities increased by 1.4 percent to $35.8 billion in FY2005, but as a percentage of GDP, they declined from 36.7 to 32.5.

Last line, under "Current Account" :http://www.adb.org/Documents/News/PRM/2005/prm-200508.asp

External Debt: Pakistan’s external debt stood at US $ 38.6999 billion on 30th June 2007. The debt burden for the previous two years i.e as on 30th June 2005 and 30th June 2006 was US $ 34.037 billion on and 35.655 billion respectively. There is an increase of 3.044 billion which represents a 8.5 percent increase in external debt over the stock at the end of FY 2006. Majority of the EDLs are in the form of medium and long term borrowing from multilateral and bilateral lenders which accounts for 80 percent of outstanding debt. The share of short-term debt is extremely low at 0.1 percent.

During the financial year 2005-06 external debt and liabilities declined from 32.7 percent of GDP in FY 2004-05 to 29.4 percent of GDP in 2005-06. Pakistan has succeeded in reducing the rising trend in external debt and foreign exchange liabilities. The external debt and liabilities as percentage of foreign exchange earning declined from 120.6 at the end of June 2006 to 119.7 at the end of March 2007.

Under "Fiscal Policy": http://www.ecosecretariat.org/Countries/Pakistan/tab_text_report.htm

The growth of EDLs that had slowed earlier in the decade has started to pick-up pace again partly on account of borrowing for earthquake-related spending. EDLs grew by 4 percent in FY06 while they grew by 7.8 percent in FY07. But because of faster growth in GDP the EDLs as a percentage of GDP have been on a decline. EDLs as percentage of GDP have declined from 29.4 percent in FY06 to 28.0 percent in FY07. During the first quarter of FY08, the EDLs have further declined to 25.7 percent of the projected GDP for the year.

7th Paragraph of: http://www.dailytimes.com.pk/default.asp?page=2008\02\07\story_7-2-2008_pg5_1

siamu maharaj

January 31st, 2009, 08:28 AM

And foreign debt was not increased in Musharraf's tenure!! And rupee was also not depreciated in 8 years of Musharraf's rule, and i am telling u Mushi has future in pak politics!!
I think we did borrow money, but the debt dropped as a ratio of GDP. Trappy may have figures on that.

brightside.

January 31st, 2009, 08:38 AM

During Mushy's time, debts were written off by Western governments, thats why it went down as a ratio of GDP, and this was in between 2001-2004, which is why the economy was kick started.

Naresh

January 31st, 2009, 02:22 PM

Pakistan can become regional hub of trade, says Soomro (http://www.dailytimes.com.pk/default.asp?page=2009/01/31/story_31-1-2009_pg7_40)

ISLAMABAD : Pakistan has the potential to emerge as a regional hub of trade and manufacturing, Senate Chairman Muhammadmian Soomro said on Friday, adding that Pakistan is an investor-friendly country because of inexpensive and hardworking labour, and easy availability of credit. He was talking to Canadian High Commissioner Randolph Mank and Ambassador of Japan to Pakistan Chihiro Atsumi, who called on him separately at the Parliament House and discussed various issues, particularly investment opportunities in Pakistan. Meanwhile, the Senate chairman also met with a business delegation from the UAE headed by Sheikh Talal Najibi, chairman of Coastal Groups of Dubai, and the ambassadors of Germany and the UAE at his residence and discussed investment opportunities in the country. “Power generation, infrastructure development, oil and gas exploration, minerals and gemstone, and housing and real estate are some of the sectors, which hold great potential for any prospective investor,” Soomro said. He added that foreign investors should take advantage of the conducive climate of investment in the country. During the meeting with the Canadian high commissioner, the scope of power generation projects was also discussed. The high commissioner said Pakistan could benefit from his country’s expertise in hydel power generation. The Canadian and Japanese high commissioners commended Pakistan’s role in the war on terror and assured of their support for it. staff report

Cheers:cheers:

spyk

January 31st, 2009, 06:41 PM

spyk

January 31st, 2009, 06:42 PM

During Mushy's time, debts were written off by Western governments, thats why it went down as a ratio of GDP, and this was in between 2001-2004, which is why the economy was kick started.

Which debts were written off under Mushi? Can you provide more details.

Pakistan ended its IMF programmer in 2002, after which, no additional debts were accumulated.

The debt to GDP ratio improved because the economy almost doubled, from $70 billion, to about $150 billion, but, the debt did not increase as much.

And, the economy was kick started due to reforms, in particular the liberalization of the financial sector.

PakFan

January 31st, 2009, 10:53 PM

Which debts were written off under Mushi? Can you provide more details.

I don't have the time to dig out details but can confidently state that a whole program of debt write-off, not just rescheduling, was carried out with Western nations post 9/11.

Intoxication

February 1st, 2009, 08:22 PM

Just for everyone's general knowledge:

Economic Reforms of the Year 2000 (http://www.londonstockexchange.com/NR/rdonlyres/9876F63B-54DB-46FC-B636-DB877A379C1B/0/Privatisationminister.pdf)

Naresh

February 1st, 2009, 09:07 PM

Intoxication Ji :

Could you please check with your “Mine of Economic Data” and confirm when the Pakistani GDP Calculations were “Upgraded”.

This “Upgrading” was done by adding a number of Sectors to the “Calculations” and if I am not mistaken “Courier Services” was one of those “Added Sectors”,

This might be during the period 2001-2003 as the GDP rose from about USD 67 Billion in the Year before “Upgrading” to USD 85 Billion (or more) in the “Upgraded Calculations” Year.

Many thanks in advance

Cheers:cheers:

spyk

February 1st, 2009, 10:35 PM

I don't have the time to dig out details but can confidently state that a whole program of debt write-off, not just rescheduling, was carried out with Western nations post 9/11.

I know about rescheduling, but, I dont think there were any writedowns.

brightside.

February 2nd, 2009, 06:17 PM

I know about rescheduling, but, I dont think there were any writedowns.

http://www.dailytimes.com.pk/default.asp?page=story_6-4-2003_pg5_1

http://www.rediff.com/money/2004/jul/16us.htm

http://www.monstersandcritics.com/news/southasia/news/article_1157257.php/Canada_writes_off_Pakistans_392-million-dollar_debt

Thats just a couple of instances, many more occurred during those years.

Naresh

February 3rd, 2009, 01:28 PM

Debt seen rising by Rs2trn this year (http://www.dawn.com/2009/02/03/top3.htm)

Mubarak Zeb Khan

ISLAMABAD, Feb 2 : Pakistan’s public debt is expected to go up by over Rs2 trillion by the end of 2008-09, the highest ever increase in a single year.

The public debt is estimated to rise by 34 per cent to Rs7,931 billion by June 30 from Rs5,901 billion in 2007-08 because of massive depreciation in the value of the rupee and external loans obtained for budgeting the balance of payments.

According to figures compiled by the ministry of finance, the foreign currency debt will reach Rs4,811 billion and domestic currency debt will stand at Rs3,120 billion by the end of June 2009.

The public debt share as percentage of the GDP will rise to 59 per cent from 56.3 per cent in the last financial year. It will be a violation of the Fiscal Responsibility and Debt Limitation Act, 2005, which asks for a gradual reduction in public debt.

Talking to Dawn, Adviser to the Prime Minister on Finance Shaukat Tarin confirmed that the public debt would go up mainly because of deficit financing, which stood at around Rs500 billion. He, however, said it would start declining as percentage of the GDP from the next year.

He said Pakistan would receive $8.5 billion to $9 billion by June 2009. After repayment, the net external loan was expected to remain at $7 billion by the end of the current fiscal year, he added.

The external debt is estimated to reach $51.315 billion in 2008-09 from $44.467 billion in the last financial year. It is projected to edge up to $56.820 billion in 2009-10, $59.628 billion in 2010-11, $61.799 billion in 2011-12 and $62.303 billion in 2012-13.

The total public debt amounted to Rs6,572 billion at the end of the first quarter (July-Sept) of the current fiscal year, showing a massive increase of Rs671 billion in just three months.

The rupee depreciation in the first quarter had an impact of Rs447 billion on the stock of public debt. The significance of this effect is highlighted by the fact that even though the stock of foreign currency debt has gone down in dollar terms by $400 million in the first quarter, there has been an increase in rupee terms of Rs414 billion or 62 per cent.

According to a report on debt policy 2008-09 submitted to the National Assembly, the rupee depreciation has been responsible for approximately 66 per cent increase in public debt.

Cheers:cheers:

Intoxication

February 3rd, 2009, 01:48 PM

rahim.katchi

February 3rd, 2009, 02:18 PM

Pakistan-Jordan agree to sign Free Trade Agreement

ISLAMABAD, Feb. 3 (APP): Pakistan and Jordan have agreed to sign Free Trade Agreement (FTA) to deepen their existing economic and trade relations. A Pakistan delegation will visit Jordan in March this year to formally start negotiation to this effect. This reflects the strong desire of their respective governments, bringing their economic ties at par with excellent diplomatic partnership.

The two countries are moving ahead on a fast track to broaden their multi-dimensional strategic partnership, particularly in defence production and business sectors, said Ambassador of Jordan Dr. Saleh Ahmad Al-Jawarneh who called on President Asif Ali Zardari here.

He told APP that President Zardari has accepted the invitation for participating in the meeting of World Economic Forum (WEF), scheduled to take place in Jordan from May 15 to 17, and expressed his desire to bringing their ties to a new height, meeting the common aspirations of their people.

The invitation was extended to him on behalf of King Abdullah bin Al-Hussain. The Ambassador said that WEF moot will offer a fresh outlook at new economic opportunities and on the evolving political challenges in the region.

Terming, his meeting with President Zardari as highly productive and cordial, the Ambassador said there is a strong will on the level of the present government to consolidate its country’s interaction with the Muslim world.

During the meeting, he said he conveyed good wishes of the King of Jordan to the President, the government and the people of Pakistan.

President Asif Ali Zardari thanked the Jordanian King for inviting him to the WEF. He also conveyed his good wishes and of the people of Pakistan to the Jordanian King and the people. He said he found President Zardari very keen in cementing their bilateral ties.

To a question, Dr. Saleh Ahmad Al-Jawarneh said he was highly confident that their relationship will get further boost in the years to come in all fields, including defence production, science and technology, agriculture and textile.

The Kingdom of Jordan attaches great importance to its socio-economic partnership with Pakistan. “We welcome the Pakistani side to seek profitable business and investment opportunities in Jordan”.

It is most fortunate for the countries that such conditions exist and continue to be strengthened as the two nations maintain their historical friendship and association, a testament to the superb leadership of King Abdullah II Ibn Al-Hussein and his Pakistani leaders, President Asif Ali Zardari and Prime Minister Yusuf Raza Gilani.

Recalling his close personal attachment with Pakistan, Dr. Saleh Ahmed Al-Jawarneh said he had the distinction, completing his Graduation and Master’s Degree qualifications from Karachi University. Then from 1987 to 1992, he had the honour to serve as a Junior Diplomat and Deputy Head of Mission (DHM) of the Hashemite Kingdom of Jordan in Islamabad.