LAHORE
(September 18 2008)

Senior Minister, Raja Riaz Ahmad has said that the government is spending an amount of Rs 30 billion, during the current fiscal year, for improving socio-industrial infrastructure in Punjab. The purpose is to provide good living conditions to the ordinary people.

He was talking to various delegations of people and the political workers who called on him at his residence here on Wednesday. Raja Riaz informed that developmental resources are being utilised for improving necessary infrastructure in the province in a most transparent manner. Raja Riaz told that government is spending Rs 17.50 billion on roads development, Rs 15.23 billion for construction of public buildings and another some of Rs 6.76 billion on urban development. These expenditures are 38 percent greater than previous ADP's allocations.

The government is also spending Rs 1 billion on improving environment, he told. The government is also giving importance to improvement of less developed areas and some of Rs 7.50 billion has been earmarked for the composite development of southern Punjab, he informed.

Business team to prepare points to discuss with President

KARACHI
(September 18 2008)

The business community has decided to establish a committee and prepare comprehensive suggestions on economic issues for discussing with President Asif Ali Zardari. The decision was made in a meeting held at the residence of Aquil Karim Dhady on Tuesday night in which prominent persons from FPCCI, KCCI, Kati, Site, KSE and other trade bodies participated.

The business community was of the opinion that the country is facing very serious economic crisis which needs government's immediate attention and taking up bold decision to revive economic and industrial activities. The announcement of names of the members of the committee expected to be made in the next few days. They demanded of the government to immediately reduce mark-up rate by 2 percent to revive industrial activity in the country.

They emphasised the need of unity in the business community of the country to start joint efforts for reviving industrial, trade and economic activities in the country. They were of the opinion that until and unless business community is united and started joint efforts problems would not be resolved. They criticised the State Bank's tight monitory policy.

Tariq Sayeed said that until and unless business community was united in the country their problems would not be resolved. He thanked Aquil Karim Dhady for inviting and uniting various fraction of business community at one platform after 40 years on economic issues.

He said that the country was passing through worst economic crises and in these conditions the business community must give well thought out workable suggestions to the government for its consideration and implementation.

He said that the cost of doing business had increased manifold and at this cost of production Pakistan would never succeed in marketing its products in world market. He said that due to the ever-increasing cost of doing business no investor is prepare to invest and establish new industrial units. Shopkeepers and traders are also facing multiple problems in sale of goods.

S M Munir expressed concern over continuous sliding down exports and said that due to high cost of production no one in world market is ready to purchase goods from Pakistan. He said that policy of increased mark-up has failed to reduce inflation. With the increase of mark-up inflation and prices of goods also increased, he added. He said that the President and Prime Minister must hold meeting with business community to discuss issues and make decision Zubair Motiwala said that the country does not need tight monitory police in the present circumstances.

What it needed is restoring business community's confidence. He said that Afghan transit trade has crippled Pakistan's economy. Involving IMF and World Bank in Pakistan's economic issues is not in the interest of the country, he claimed Mirza Ikhtiar Baig said that over 137 industries have already become defaulter and in these conditions monitory policy must be soft.

Zakaria Usman said that the country is facing serious law and order problems, and added that these problems need to be taken up on priority basis Aptma chairman Iqbal Ibrahim criticised government policies and said that dollar value increase was due to policy failure. The meeting was attended by Siraj Kassim Teli, Iftikhar Ahmed Shaikh, Haroon Agar, Zahid Hussain, Arshad Vohra, Ibrahim Panwala, Arif Habib and others.

Copyright Business Recorder, 2008

Rizwan Bhatti

KARACHI
(September 18 2008)

The country's current account deficit widened by 64 percent to 2.5 billion dollars during July-August of current fiscal year mainly due to slowdown in exports and rising trade deficit, besides slow foreign inflows.

Official statistics on Wednesday revealed that during July-August of FY09 the country faced a current account deficit of 2.572 billion dollars against 1.571 billion dollars during the corresponding period of last fiscal year, depicting an increase of some 1.001 billion dollars in first two months.

Economists expressed deep concern over the rising trend of current account deficit saying this would put more negative impact on the PKR and the country's economy, which is already facing a difficult situation for last one year. "With the current and continuously upward trend in the current account deficit, the government would also be compelled to get new foreign loans to meet the requirement of the increasing foreign payments," they said.

Increasing trade deficit followed by slow growth in exports and high imports coupled with rising oil and food import bill are the chief reasons for this raise in the C/A deficit, they observed. "Although, the government has taken some steps to curb the booming imports by imposing 100 percent cash margin and regulatory duty on the import of luxury items, however positive results are expected to be witnessed in next few months," they added.

The State Bank of Pakistan statistics indicate that principal factors responsible for the widening of current account deficit include a widening trade deficit, which surged by 67 percent. However, services deficit registered a negative growth of 2 percent in July-August of 2009.

The country's overall imports stood at 6.299 billion dollars and exports at 3.643 billion dollars registering a trade deficit of 2.657 billion dollars during first two months of current fiscal year. It earlier stood at 1.593 billion dollars during same period of FY08.

Services trade deficit stood at 1.068 billion dollars from 1.090 billion dollars, depicting a decline of 22 million dollars in first two months with 1.491 billion dollars import and 423 million dollars exports.

Similarly, income deficit also witnessed a slight increase of 44 million dollars to 683 million dollars from 638 million dollars. During the first two months, the country's overall income from abroad stood at 119 million dollars as compared to payments of 802 million dollars to overseas.

Overall deficit including trade, services and income stood at 4.408 billion dollars against the current account transfers of 1.854 billion dollars. Statistics show current account deficit without official transfers climbed to 2.633 billion dollars during the first two months of fiscal year 2009 as compared to some 1.575 billion dollars during FY08.

Copyright Business Recorder, 2008

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