Government urged to curtail non-development expenditures
LAHORE (December 03 2009)
The PML-N leaders urged the government to unfold a comprehensive and practical programme to improve economic lot of people by curtailing its expenditure on non-development work. They also asked the government to form an independent accountability commission to ensure good governance in the country as per provisions of Charter of Democracy (CoD).
They were of the view that manifold problems including terrorism confronted to the country are the result of long dictatorial regime. During dictatorship, institutions were destroyed and nepotism was promoted, they added. The PML-N leadership was sincerely striving for transforming Pakistan in accordance with the ideals of Quaid-e-Azam and Allama Iqbal where equal rights and opportunities are available to every citizen, they added.
Former Deputy Speaker National Assembly and PML-N senior leader Chaudhry Jaffar Iqbal said that Pakistan was facing a difficult situation, which could be tackled through unity. He urged the government to curtail its expenditures and provide relief to people.
He said that holding of mid-term elections was not solution to problems. The people had given mandate to democratic forces for a change, therefore, the government must bring real change by changing policies of Pervez Musharraf. In order to discourage corruption, the institution of accountability should be made more effective and functional while those who plundered national wealth should be punished.
Senior Political Assistant to Chief Minister Punjab Mohammad Pervez Malik has said the sacrifices of Sharif family for the nation and country could not be ignored. The government could not tackle the constitutional and financial crises without empowering the parliament.
The federal government during its 2-year rule had not taken any serious steps for restoring the confidence of local and foreign investors. The government had no agenda for making Pakistan a powerful economic state. The implementation of Charter of Democracy would help strengthen the economy and democracy in the country, he said.
Copyright Business Recorder, 2009
Industrialists reject increase in POL prices
KARACHI (December 03 2009)
The industrialists have sharply reacted on increase of petroleum products prices and fear that prices of all the goods produced locally will go up sharply in near future. They feared that it would have very negative impact on the purchasing power of general public, sale of goods will decline due to high prices with ultimately lead to closure of more industrial units.
Frequent increase in gas, power tariffs, transport fares and oil prices have already accelerated capital flight and discouraged local and foreign direct investment. They said that law and order is already a serious problem and feared day-to-day increase in oil prices, gas, power tariffs may further create unrest among general public. They rejected the increase in POL prices terming it unjust at the time when other countries in the region are extending price relief to their people.
Chairman, Korangi Association of Trade and Industry (KATI) Razzak Hashim Paracha, while showing his utter surprise over the government's decision said that India has recently reduced petroleum prices by Rs 2 per litre while Pakistan is increasing POL prices unjustifiably. "If the other countries in the region are providing relief to their consumers by reducing POL prices why Pakistan government is making people's lives miserable", Paracha said.
He said that as compared to India Pakistan is producing 20 to 25 oil indigenously besides getting oil from Gulf states on subsidised rates while India does not have any of this advantage. He said that the pathetic attitude towards industry and export sector, the industry would resort to cut down expenses and it would result in massive unemployment in the country.
The President, Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Husain while condemning the increase in POL prices, said that there was no reason for the government to resort such a cruel decision at this juncture when the people have almost buried under the skyrocketing prices of utilities and food items.
He said that is seems that the government has decided not to pay any heed to the hue and cry of the masses over frequent and unjustified increases in utilities' prices and keep on increasing financial burdens on them without realising that there is an end to it. Chairman F B Area Association of Trade and Industry Shahid Ismail said that a large numbers of small and medium sized units were closed in the last six months as they could not compete owing to surging cost of production.
He feared that more units would close down after recent power and gas tariff hike. He said the association had no plan to call a strike but a joint strategy will be adopted to take up the anti-industry decisions with the government.
He said that increase in petroleum products will not only increase SPI and poverty but the outcome for trade and industry will also be negative and direct impact causing hurdles in pace of industrial and commercial activities. He said that developed world providing unexpected and unconditional relief package to trade and industry to accelerate the pace of industrial activates but in Pakistan trade and industries facing multiple hurdles such as power loadshedding, extortion and harassment of ransom and international recession.
He said that the government must take business community into confidence before taking important decisions. He demanded withdrawal of increase in oil prices. The patron-in-chief, Korangi Association of Trade and Industry (KATI) S M Muneer, Vice Chairmen, Amjadullah Khan and Najmul Arfeen in a statement said that the frequent increases in utilities prices by the present government has caused massive increase of 14 percent in the cost of production rendering the industry incompetent not only in the international market but also in the region.
An emergency meeting was held at North Karachi Association of Trade and Industry (NKATI) and discussed increase in gas, power tariffs prices. The participants condemned government decision to increase oil prices. They were of the view that people already have been facing problems in purchasing essential goods to feed their family. Increase in oil, gas and power tariff further aggravates their living condition.
They noted that government has already allowed 18 percent increase in gas and 12 percent increase in power tariffs from January 1, 2010 and feared these increases will have negative impact on law and order condition and feared that the situation may get out of government control. The meeting was attended by Chairman Sadiq Muhammad, Syed Usman Ali, Syed Iqtadar Ali, Faraz, Noor Muhammad Khan and others.
Copyright Business Recorder, 2009
Activity at Karachi and Qasim ports
KARACHI (December 03 2009)
The Karachi Port handled 111,062 tonnes of cargo including 66,740 tonnes import and 44,322 tonnes export cargo including 3,361 empty and loaded containers during last 24 hours ending at 0700 hours on Wednesday. The cargo comprised of 81,562 tonnes dry cargo including 52,797 tonnes containerised and general cargo; 4,974 tonnes DAP; 6,616 tonnes urea powder; 7,022 tonnes coal; 7,778 tonnes cement and 29,500 tonnes oil/liquid cargo.
Five ships namely United Stars, Dina G, MOL Bravery, APL Dalian and Dandle sailed out to sea during the report period. Seven vessels viz Bunga Raya Tujuh, Sima Sahba, Jin Hua, Maharshtra, Al-Marwah, Al-Soor-II and HPMC P Fortune are currently at the berths. Two ships namely Sima Sahba and Bunga Raya Tujuh expected to sail on Wednesday, while another four vessels viz Palawan, Al-Soor-II, Al-Marwah and Yordan Lutibrodski are expected to sail on Thursday.
Five ships namely Andino Park, MT Swat, Hyundai Baron, Khairpur and Industrial Dawn due to arrive on Wednesday, while another five ships namely Bunga Raya Enam, APL Balboa, PAC Aries, Invicta and Bulk Chile are due to arrive on Thursday.
A total cargo volume of 36,518 tonnes comprising 29,698 tonnes import and 6,820 tonnes export inclusive of containerised cargo carried in 536 containers (TEUs) was handled during last 24 hours on Wednesday. The cargo comprised of 20,058 tonnes diesel oil; 4,120 tonnes chemicals; 811 tonnes rice; 3,993 tonnes cement and 7,536 tonnes containerised cargo.
Two ships namely Nedlloyed Oceania and Bunga Kantan Dua sailed out to sea during last 24 hours, while two more ships namely ACX Marguerite and Omega Queen are expected to sail on Wednesday. A total of ten vessels viz ACX Marguerite, Ville De Orion, Santa Catalina, Grigoroussai, Antarctic, Hiba Al-Nour-B, Vincanton, Wales-II, Dolphin-3 and Aqua Grace scheduled to load/offload containers, furnace oil, chemicals and cement are currently at the outer anchorage.
Seven ships namely CV Nedlloyed Oceania, MV Kom, Colina, MV Alexi-III, MV Sun rise-89, Omega Queen and MV Bunga Kantan Dua are currently occupying berths to load/offload containers, rice, cement, gas oil and chemicals respectively during last 24 hours. Six vessels viz Tong List, Donau Trader, Dubai Express, Al-Abdali, Maersk Novazzano and MSC Sierra carrying iron ore and containers are expected to arrive.
Copyright Business Recorder, 2009
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inayatali (Friday, January 29, 2010)
National Savings Bonds attract Rs3.6 billion
KARACHI, Jan 27: The National Savings Bonds (NSBs) launched by the Finance Minister Shaukat Tarin on Jan 12 secured subscription of Rs3.6 billion for the 15 days during the time the register was open for subscription till Tuesday.
National Savings Organisation (NSO) claims fame for the launch of Pakistan’s first ever scripless, tradable government security. The Bonds would seek entry into the stock exchanges on Feb 25.
Director General NSO, Zafar M. Shaikh, told Dawn on Wednesday that he thought the public response to the NSB offer was ‘great’, given the lacklustre market conditions and the liquidity crunch. He said that the Bonds had gone to create public awareness about savings and investments. “Though the subscription closed on Jan 26, the launch of more tradable bonds will be a regular feature”, said he, arguing that the failure of FIBs in 1991 was because of the government’s decision to plug supplies”.
The DG of NSO believed that the Bonds would deepen the domestic debt market, which currently offered investment opportunities in only TFCs and the PIBs.
Several market watchers rolled their eyes in disapproval of public enthusiasm over the Bonds. “The Bonds could secure pretty smaller amount, compared to other National Savings Securities”, said one.
Already managing over Rs1 trillion in various schemes, Zafar Shaikh informed that the target for the current year to seek investments into various NSS was set at Rs240 billion, of which Rs120 billion was already received in six months of the year to December.
He said that in the comparable period of last year, the schemes had fetched only Rs48 billion, but the aggregate for that year had climbed to Rs267 billion. The DG of NSO said that he was sanguine that the target would be surpassed this year as well, his reason being that historically, the flow of money into savings schemes picks up pace in the second half of the year. “Over 90 per cent of savers in NSS represent the lower and middle class population with each individual placing amounts of Rs10 million and lesser,” he said.
An investor sympathetic to the NSBs said that the amount of aggregate investment in Bonds looked smaller also because of a lot of paperwork that was required to be done by the subscribers. They had to have a duly verified bank account and to maintain an Investor account/sub-account with the Central Depository Company (CDC).
But at the bourses, equity dealers were showing little inclination for several of them consider a fixed income instrument to be a ‘de-motivating product’ for the equities. “Granted that the over-thecounter tradable PIBs with comparable rates of return are already available in the secondary market, those are the instruments in which banks and high-net-worth individuals deal”, he said, but what of TFCs? As little as Rs50 million worth of average daily turnover is recorded in TFCs, in the aggregate average daily turnover of Rs8 to 10 billion in all of the capital market.
NSS officials were, nonetheless, putting their trust in investors who they believed would be attracted by the high fixed interest rate starting 12.5 per cent for threeyear bonds. Analysts thought that it had to be seen if too many investors would prefer to shift cash from NSS schemes to bonds. “Promising a higher rate of return at 12.5 per cent, cash would be tied up for three years, unless Bonds are briskly traded at the Exchange”, said one and asked if investor would go for around one per cent higher rate offered by the 3-year Bond over the Special Savings Accounts (11.6 per cent) with the latter invested with the inherent advantage of over-thecounter liquidation into cash at any time.
karachi, jan 27: the national savings bonds (nsbs) launched by the finance minister shaukat tarin on jan 12 secured sub- scription of rs3.6 billion for the 15 days during the time the register was open for sub- scription till tuesday. national savings organisation (nso) claims fame for the launch of pakistan’s first ever scripless, tradable government security. the bonds would seek entry into the stock exchanges on feb 25. director general nso, zafar m. shaikh, told dawn on wednesday that he thought the public response to the nsb offer was ‘great’, given the lacklustre market conditions and the liquidity crunch. he said that the bonds had gone to create pub- lic awareness about savings and investments. “though the subscription closed on jan 26, the launch of more tradable bonds will be a regular fea- ture”, said he, arguing that the failure of fibs in 1991 was because of the government’s decision to plug supplies”. the dg of nso believed that the bonds would deepen the domestic debt market, which currently offered in- vestment opportunities in on- ly tfcs and the pibs. several market watchers rolled their eyes in disapprov- al of public enthusiasm over the bonds. “the bonds could secure pretty smaller amount, compared to other national savings securities”, said one. already managing over rs1 trillion in various schemes, zafar shaikh informed that the target for the current year to seek investments into vari- ous nss was set at rs240 bil- lion, of which rs120 billion was already received in six months of the year to december. he said that in the compa- rable period of last year, the schemes had fetched only rs48 billion, but the aggre- gate for that year had climbed to rs267 billion. the dg of nso said that he was san- guine that the target would be surpassed this year as well, his reason being that histori- cally, the flow of money into savings schemes picks up pace in the second half of the year. “over 90 per cent of sav- ers in nss represent the lower and middle class population with each individual placing amounts of rs10 million and lesser,” he said. an investor sympathetic to the nsbs said that the amount of aggregate invest- ment in bonds looked smaller also because of a lot of paper- work that was required to be done by the subscribers. they had to have a duly verified bank account and to maintain an investor account/sub-ac- count with the central depository company (cdc). but at the bourses, equity dealers were showing little in- clination for several of them consider a fixed income in- strument to be a ‘de-motivat- ing product’ for the equities. “granted that the over-the- counter tradable pibs with comparable rates of return are already available in the secondary market, those are the instruments in which banks and high-net-worth in- dividuals deal”, he said, but what of tfcs? as little as rs50 million worth of average daily turnover is recorded in tfcs, in the aggregate aver- age daily turnover of rs8 to 10 billion in all of the capital market. nss officials were, none- theless, putting their trust in investors who they believed would be attracted by the high fixed interest rate start- ing 12.5 per cent for three- year bonds. analysts thought that it had to be seen if too many investors would prefer to shift cash from nss schemes to bonds. “promising a higher rate of return at 12.5 per cent, cash would be tied up for three years, unless bonds are briskly traded at the exchange”, said one and asked if investor would go for around one per cent higher rate offered by the 3-year bond over the special savings accounts (11.6 per cent) with the latter invested with the in- herent advantage of over-the- counter liquidation into cash at any time.
One has to remember that every failure can be a stepping stone towards something better.
Economic development: EU agrees to step up dedicated dialogue
ISLAMABAD (February 19 2010)
European Union (EU) has agreed to step up a dedicated dialogue to enhance bilateral trade, including through a possible free trade agreement (FTA) in the long run. This was stated by the Jan DE KOK, Ambassador Head of Delegation EU in a joint press conference with Gonzalo Maria Quintero Saravia, Ambassador of Spain to Pakistan here on Thursday.
He said that Pakistan has a great political significance for European and trade is on top of our agenda. He further said that to support Pakistan's economic development, the EU has agreed to step up a dedicated dialogue to significantly enhance the bilateral trade relationship, including through a possible free trade agreement in the long term.
He said that EU is focusing on the measures that would help enhance trade relation with Pakistan. KOK said that there was a need to follow the rules defined by the World Trade Organisation (WTO). Jan DE KOK said that the GSP plus status would be taken away from the countries that will not follow the EU Convention of Human Rights.
To a question regarding the Pakistan and India, Foreign Secretary-level talks on February 25, he said that we urged both the countries to resume the Composite dialogue process. To a question regarding the issue of attending the upcoming EU Summit by the Prime Minister of Pakistan Syed Yusuf Raza Gillani, he said that EU summit was always being attended by the head of the countries.
It is imperative that the European Union joined hands with Pakistan in its fight against terrorism and allowed free access to Pakistani products to European markets, he added. Earlier addressing the media persons, the Ambassador of Spain said that his country would not leave Pakistan alone and would support it by all possible means. He said that currently the situation through which Pakistan is going through nowadays is the one Spain also faced some 40 years back.
He said that currently Spain assumed the rotating presidency of the European Union at the start of the year, promising to make the Lisbon treaty its top priority. Sharing the details he said that the treaty took effect in December, ushering in a host of changes to help the EU take decisions efficiently and play a prominent role in international affairs.
He said that the changes include revamping the six month rotating presidency to ensure close co-operation with two offices created by the treaty, the EU president and the foreign affairs chief. "As the first country to hold the presidency under the treaty, Spain has an opportunity to set the course", he added. He said presently Spain is facing a number of challenges of this economic and financial crisis is on top among others.
The Ambassador said that our priority is achieving economic recovery while promoting a model of sustainable growth, capable of creating more and better jobs, bringing European citizenship a step further in the 21st century, with particular consideration of equality between women and men. Driving Europe forward as a global actor, the defence of human rights and the eradication of poverty in the world and the effective application of the Lisbon Treaty and the corresponding political and institutional renewal.
Copyright Business Recorder, 2010
Punjab Privatisation Bill 2010 passedJALIL HASSAN AKHTAR
LAHORE (February 19 2010)
Punjab Assem-bly on Thursday deliberating on resumption of clause-by-clause consideration of Punjab Privatisation Board Bill 2010 passed it with two amendments. Under the bill provincial government shall establish Privatisation Board in the Province.
The Board shall consist of Chairman; Senior Member, Board of Revenue; Chairman Planning and Development Board; Member Colonies, Board of Revenue of the Government; Secretary to the Government Finance Department; Secretary to the Government Industries Department; Managing Director, Bank of Punjab; three persons from the private sector; Secretary of the Board. The Board shall recommend privatisation policy guidelines to the government.
In the House in a Call Attention Notice regarding deterioration of law & order in Gujrat, Law Minister Rana Sana Ullah assured the House of positive steps in this regard. He said CM Punjab had visited the area on murder of 15 persons. An MPA pointed that dera dari was rampant in the area in which criminals were present in abundance. He said many legislators had lost their lives due to these miscreants in the past.
During the session there was laying of Report on the observance and implementation of principles of policy for the year 2007; Laying of the Audit Report on the Accounts of the Government of the Punjab Civil Works, Communication & Works, Housing, Urban Development & Public Health Engineering, Irrigation & Power and Local Government and Community Development Departments for the Year 2006-07; Laying of the Audit Report on the Accounts of Revenue receipts Government of Punjab for the year 2006-07.
In an Adjournment Motion MPA Muhammad Mohsin Khan Laghari averred that only Rs 180 million had been released out of the total Rs five billion allocation of Southern Punjab under Annual Development Programme 2009-2010. In an another Adjournment Motion, Mohsin Laghari quoting December 4 ,2009, Indus River System Authority (Irsa) has asked Punjab to close down Thar Canal, Chashma Right Bank Canal, Muzaffar Garh and Dera Ghazi Canal. According to the news he added that Authority had already closed down Chashma-Jhelum Link Canal and substantially reduced supplies to Taunsa Panjnad Link Canal. The Chair told the mover to hear the water issue in the House on Friday (today).
In an another Adjournment Motion presented by Sheikh Allaudin, the legislator showed his dismay on the non-marriage of women in society due to various problems and demanded a respite for them by providing jobs for removing their economic burdens. He said there were 17 percent of these females in our society. In the debate on important issue many legislators demanded formation of a committee and one added that a proper bill should come for doing away with the menace of dowry.
Answering queries Minister Rana Tanvir -ul-Islam talked of measures regarding Shalamar Gardens and added that steps had already been taken in this regard. MPA Sajida Mir in a suggestion asked the Authorities to provide assistance to youngsters with sports career so that they could bring laurel to the Country. The House was later adjourned for Friday 90 am.
Copyright Business Recorder, 2010
'Muslim countries should join hands for economic development'RECORDER REPORT
LAHORE (February 19 2010)
Punjab Chief Minister, Muhammad Shahbaz Sharif has said that all Muslim countries should learn from their experiences and join hands for the economic development of their countries.
"If European countries can form European Union, a joint parliament and common currency for the progress and prosperity of their people then Pakistan, Iran, Turkey and other Muslim countries should also do the same," he said while addressing a reception in connection with 31st anniversary of Iranian revolution, here on Thursday.
The chief minister said that Pakistan and Iran were brotherly Islamic countries and were bound together in strong religious and cultural ties. "Iranian people have made remarkable progress in all sectors through their commitment and hard work despite difficult conditions and sanctions which is an example for other Muslim countries," he said.
Iran had always supported Pakistan in the time of need. Iran was the first country, which recognised Pakistan after its creation, however, it is lamentable that their trade relations do not reflect their close fraternal ties.
The chief minister congratulated Iranian people on behalf of Punjab government and the people of Punjab on the 31st anniversary of Iranian revolution. He said this historic event reflects the success of Iranian nation in the struggle against oppression and tyranny.
He said that Iranian women are taking an equal part with men in all sectors of life and Iran has practically proved that half of the country's population cannot be sidelined if the objective of development is to be achieved. He said that Iran has also proved that women can play an active role in the development process even while maintaining their religious traditions and social values. The chief minister also prayed for a long and eternal friendship between Pakistan and Iran.
The Iranian Ambassador in Pakistan, Mashallah Shakiri said that there were strong fraternal ties between Pakistan and Iran, which were strengthening with the passage of time. He said that people of the two countries were very close to each other. Iran had achieved remarkable successes during the last three decades despite a lot of difficulties and economic sanctions after the Iranian revolution.
Earlier, Iranian Ambassador met with the chief minister Punjab and exchanged views on co-operation in different sectors. The chief minister said that Iran and Pakistan could launch joint ventures in coal energy, dairy farming and other sectors.
Copyright Business Recorder, 2010
South Asian nations sign trade, environmental accords
THIMPHU (April 30 2010)
16th Saarc Summit concluded here on Thursday with adopting the joint declaration and Thimphu Statement on climate change for development in the region, improving inter-connectivity, promoting people-to-people contacts and evolve joint strategy for resolving the issues of water shortage, environment and food shortage.
A ceremony of flag hoisting of members' states of Saarc was held outside the Assembly Hall where this 16th Summit was held before the concluding session. All the eight leaders of the Saarc members and observers especially participated in the flag hoisting ceremony held outside the Hall where the weather was very pleasant.
All the leaders also witnessed the art and craft work of the Saarc Business Association of Home Based Workers (SABAH), which was especially arranged in the lobby of the Assembly Hall, the venue of the 16th Saarc Summit. Prime Minister Syed Yousuf Raza Gilani and his wife along with other leaders of the Saarc and their wives went around different sections of the exhibition and highly appreciated the art and craft work displayed in the exhibition.
All the leaders mixed up with each other on this occasion and appreciated the art work of each country displayed in the exhibition. Prime Minister Gilani and Indian Prime Minister Dr Manmohan Singh were together during this exhibition and even exchanged pleasantries, Artwork by Artists from Saarc members states, including Pakistan on the issue of Climate Change was also displayed in the exhibition, which was highly appreciated by all the leaders.
All the leaders took keen interest in the artwork displayed in the exhibition Later the leaders approved the "Thimphu Declaration" giving a new vision to the organisation to join hands for resolving poverty, improving development, finding solution to power and water shortage. The Foreign Ministers of all the Saarc members stated then signed the "Bilateral Trade and Services Agreement" and from Foreign Minister Shah Mahmood Qureshi signed it.
Later it was decided that next 17th Saarc would be held in Maldives. Then the leaders of the Saarc summit adopted Thimphu Statement of Climate Change and joint declaration of 16th Saarc Summit that has already been approved by the Ministerial Meeting of the member states. The Prime Minister of Bhutan Jigme Thinley thanked the leaders of the Saarc Summit for coming here to attend the summit.
AP adds: South Asian leaders unveiled a $300 million fund to reduce poverty in the region and signed agreements on trade and environmental protection as a two-day summit in this tiny Buddhist kingdom ended Thursday. The agreement on trade, signed by the nations' foreign ministers, covers services in health, hospitality, communications, computers and air transport services.
The environment convention, signed by the leaders, is aimed at exchanging knowledge and eco-friendly technology to combat climate change. The fund for fighting poverty, with contributions from each nation, will be used for projects that empower women and promote health care and for building infrastructure.
Copyright Business Recorder, 2010
Leaders for taking full advantage of Saarc Development Fund
THIMPHU (April 30 2010)
The South Asian Association of Regional Countries (Saarc) on Thursday issued a 37-point declaration on the conclusion of Sixteenth summit held from April 28-29 at Thimphu, which urged for full advantage of the Saarc Development Fund (SDF) to promote the welfare of the people of the Saarc region, to improve their quality of life and to accelerate economic growth, social progress and poverty alleviation in the region.
The leaders also showed concern over the rising energy shortage in the region and agreed that an Action Plan on Energy conservation would be prepared by the Saarc Energy Centre (SEC), Islamabad with inputs from the Member States and submit to the inter-governmental mechanism for consideration.
With a theme of Green and Happy South Asia, the declaration underlined the important role of the SDF for financing regional and sub-regional programmes and projects and emphasised the need for the Member States to take full advantage of the mechanism of the SDF through expeditious clearance and implementation of the projects and programmes.
According to declaration the Saarc leaders have recognised the need to enhance co-operation in the energy sector to facilitate energy trade, development of efficient conventional and renewable energy sources including hydropower. They emphasised the need to undertake studies to develop regional energy projects, promote regional power trade, efficiency, conservation and development of labelling and standardisation of appliances, and sharing of knowledge and technologies.
It also reiterated that South Asia Free Trade Agreement (SAFTA) to be implement in letter and spirit and emphasised the need to realise the full potential, through reduction of the size of the sensitive lists, acceleration of trade facilitation measures, and removal of non-tariff, para-tariff and other barriers and leaders directed the SAFTA Ministerial Council to work in earnest in these areas in a time-bound manner.
The declaration strongly condemned terrorism in all its forms and manifestations and expressed deep concern over the threat, which terrorism continues to pose to peace, security and economic stability of the South Asian region and reiterated their firm resolve to root out terrorism and recalled the Ministerial Declaration on co-operation in combating terrorism adopted by the Thirty-first session of the Council of Ministers in Colombo.
It emphasised that the linkages between the terrorism, illegal trafficking in drugs and psychotropic substance, illegal trafficking of persons and firearms all continue to remain a matter of serious concern and reiterated their commitment to address these problems in a comprehensive manner.
It needs to strengthen regional co-operation to fight terrorism and transitional organised crimes. They reaffirmed their commitment to implement the Saarc Regional Convention on Suppression of Terrorism and its Additional Protocol and Saarc Convention on Narcotic Drugs and Psychotropic Substances, the declaration re-emphasised the importance of co-ordinated and concerted response to combat terrorism.
The declaration expressed satisfaction that Saarc had achieved a number of important milestones with the completion of twenty-five years of its establishment. It also urged for a 'South Asia Forum' for the generation of debate, discussion and the exchange of ideas on South Asia and its future development.
"Its need to reach out to different sections of the South Asian community, particularly its students and youth, private media, private sector, think tanks, civil society, and institutions of economic development," the declaration said. According to that the scope and substance of co-operation had expanded to diverse fields, providing a firm basis for genuine partnership. However, a number of these had not translated into meaningful and tangible benefits to the people.
They resolved that the Silver Jubilee Year should be commemorated by making Saarc truly action oriented by fulfilling commitments, implementing declarations and decisions and operationalizing instruments and living up to the hopes and aspirations of one-fifth of humanity.
Evolved into multi-party democracies, underlined the challenges faced by them in ensuring effective, efficient, transparent and accountable governments, the declaration noted and said that in this regard, it emphasised the need for regional co-operation to strengthen good governance through sharing of experiences, best-practices and establishing institutional linkages.
The Saarc leaders emphasised on a greater focus to pursue people-centric development with due emphasis on socio-cultural progress and upholding traditions and values and in that regard, noted the concept of Gross National Happiness (GNH) pursued by Bhutan, inter alia, in ensuring people-centric development, culture, preservation of environment, better governance. They further noted that other Member States might consider Bhutan's experience with the concept and welcomed Bhutan's offer to host a Saarc Workshop on GNH in 2010.
They welcomed Climate Change, as the theme for the Summit and reaffirmed their commitment to address this challenge. In this context, they adopted the Thimphu Statement on Climate Change and directed that the recommendations contained therein be implemented in earnest.
According to declaration leaders also called for focus on water management and conservation and development of co-operative projects at regional level in terms of exchange of best practices and knowledge, capacity building and transfer of eco-friendly technology.
However, the deeply concerned by the extent of environmental degradation in the region, reiterated the importance of sustainably managing environment and development through adoption of eco-friendly approaches and technologies and that South Asia should become a world leader in low-carbon technology and renewable energies.
They also concerned by the increasing frequency and intensity of natural disasters, called for effective regional programmes in early warning, preparedness and management including response and rehabilitation, while remaining within their respective national laws and procedures.
The declaration noted with satisfaction the ongoing initiatives in promoting gender equality and women's empowerment through regional co-operation. It welcomed the signing of the Saarc Agreement on Trade in Services and expressed that this will open up new vistas of trade co-operation and further deepen the integration of the regional economies.
The Saarc leaders emphasised the need to strengthen the role of private sector in regional initiatives through appropriate mechanisms including through Public-Private Partnership as well as the need for greater intra-Saarc investment promotion efforts.
They underlined the need for taking concrete measures to improve trade facilitation. They also recognised the importance of development of communication system and transport infrastructure and transit facilities, specially for the landlocked countries to promote intra-Saarc trade.
The leaders emphasised the need to strengthen co-operation in education and directed greater interaction among the universities in the region towards undertaking of joint programmes on collaborative research and exchange programmes. Acknowledging the enormity of the challenges related to food insecurity and poverty, the leaders directed the Saarc Agriculture Ministers to vigorously pursue regional co-operation in agriculture covering all sub-sectors to enhance overall agricultural productivity.
They underscored the need for promotion of tourism to enhance greater people-to-people contacts in the region and called for the creation of tourism-friendly environment. They welcomed the offer of the Government of Nepal to host the Third Saarc Ministerial Meeting on Tourism in Kathmandu in 2011, which coincides with the Nepal Tourism Year 2011.
The leaders welcomed the observers from Australia, the People's Republic of China, the Islamic Republic of Iran, Japan, the Republic of Korea, Mauritius, the Union of Myanmar, the United States of America and the European Union and appreciated their participation in the Summit.
They acknowledged that Australia and Myanmar were attending the Summit for the first time. They appreciated the interest shown by the observers to work with Saarc. The leaders welcomed the offer of the Government of Maldives to host the Seventeenth Summit of the Heads of State or Government of the South Asian Association for Regional Co-operation (Saarc) in 2011.
Copyright Business Recorder, 2010
More industrial estates can be developed: MinisterRECORDER REPORT
KARACHI (April 30 2010)
More industrial estates can be developed on vast land available between Karachi and Hyderabad, Sindh Minister for Industries Sindh Rauf Siddiqui said here on Thursday. Speaking at a seminar on Financial Management and Financial Liquidity organised by Karachi Chamber of Commerce and Industry (KCCI) in collaboration with RAKZ Communication (Pvt) Ltd, he advised business community to bring investment projects and assured that the government will provide maximum facilities to the investors.
He said that Nooriabad, Hyderabad and Kotri industrial estates are well developed and investors should establish industrial units in these estates. He noted that water supply scheme for Nooriabad industrial estate is in advanced stage and hoped that it will be completed by March 2011.
Referring to information technology (IT), the minister said that India has taken a lead in this sector and doing lucrative business while Pakistan has wasted time and made little progress. Rauf Siddiqui appreciated holding 2nd Financial and IT Expo 2010 from August 3 to 5, 2010. President KCCI, Abdul Majid Haji Mohammad said that there has been significant development in the IT and telecommunication sector, but due to lack of recognition and platform they have drained.
Chairman KCCI Information Technology Sub-committee, Asif Baga said that transfer of technology involves external acquisition of technology. So, it does not require R&D. He said now information technology is involved in every field of life and this is ever growing.
Copyright Business Recorder, 2010
Unprecedented devastation By Khaleeq Kiani
THE devastation caused by recent floods has been unprecedented. Apart from the immediate losses of lives and public and private properties, the overall impact of the catastrophe may be enormous and far-reaching than can be currently estimated.
In the short-term, food shortage, crop inundation and emanating high food prices are likely to affect every consumer.
In the medium-term, the damage to major crops of current Kharif season – cotton, sugarcane and rice – could result in lower textile exports and higher sugar and rice prices. The good thing is that major industries like refineries, fertilisers, sugar and textile mills and power plants have remained safe except for limited losses to the power companies’ transformers, pylons and transmission lines.
In the long run, however, the recovery process would perhaps get a boost from higher needs for cement, steel and allied industries.
The initial damage assessment for relief and early recovery has been put at about $3.5 billion (about Rs300 billion). These losses are enormous when seen in the context of cumulative damages of about Rs385 billion in 14 floods since 1956.
The prices of essential food items – both perishable and non-perishable – have climbed substantially last week because of supply disruptions, inundation of fields and hoarding by stockists. As a result, potato has either disappeared from the market or is available at almost double the price.
Onion, ginger, garlic prices have also gone up significantly. So is the case with most of the fruit varieties.
Given the fact that food items have a cumulative weight of over 40 per cent in the consumer price indicator, the emerging pricing situation is anybody’s guess, more importantly because of approaching Ramazan.
According to Lt. Gen (retd) Nadeem Ahmad, the chief of National Disaster Management Authority the damage assessment reports pouring in from different agencies and ministries were being put together and would be handed over to the World Bank and the Asian Development Bank for need assessment to help them mobolise the international community for donations.
According to him, more than 50 bridges in Khyber Pakhtunkhwa on main highways had been washed away or damaged due to flash floods, in addition to hundreds of schools, hospitals and other basic service facilities. Four major bridges in Gilgit-Baltistan on the Karakoram Highway have been completely damaged while reports about damages to main roads and bridges in Azad Kashmir have just started to come in.
The major challenge would not only be to ensure food supplies in these areas but to put in place temporary and folding bridges to restore transportation networks as soon as possible. It would take a couple of years to construct new bridges, broken roads, damaged electricity pylons, etc.
Except for initial relief, the donations for longer term rehabilitation and reconstruction may not be easily forthcoming in view of ‘donor fatigue,’ said another government official.
The losses to agriculture and livestock would have a spillover effect on industry and commercial activities to a great extent. This is because agriculture continues to play a central role in the national economy. Accounting for over 21 per cent of GDP, agriculture remains by far the largest employer with 45 per cent of the country’s labour force.
Its damages on the one hand, are likely to affect raw material supplies to the downstream industry that contributes to the export sector and on the other hand, reduce the appetite for industrial products like fertilisers, tractors, pesticides and other agricultural implements. And all this comes at a time when the agricultural productivity has been falling over the years.
Since the flooding has been widespread, the damages to the cotton crop may not be verifiable at this stage. Cotton being a non-food cash crop contributes significantly to foreign exchange earning. It accounts for 8.6 of the value added in agriculture and about 1.8 per cent to GDP.
Likewise, sugarcane is a major crop which is an essential item for industries like sugarmils, chipboard and paper. Its share in value added of agriculture and GDP is 3.6 and 0.8 per cent, respectively.
Another cash crop, rice is one of the main export items. It accounts for 6.4 of value added in agriculture and 1.4 per cent in GDP. High quality rice meets both domestic demand and earns $2 billion in exports per year.
Contrary to initial estimates about Khyber Pakhtunkhwa, official data now suggest that cropping in Punjab – the country’s food basket – has been worst hit by the floods. The damages in Sindh are yet to be ascertained because of delayed flooding. As of Wednesday (August 4), about 1.11 million persons have been affected by the floods in Punjab, KP and Balochistan. The data from AJK, FATA and Sindh have yet to be compiled.
In Punjab, KP and Balochistan, a total of 1,369 villages have been affected, with Punjab on the top with 1,003 villages, followed by Balochistan at 280 and KP 86 villages. On top of that about 1.1 million acres of cropped areas has been affected in these three provinces. The flood affected cropping acreage includes 1.086 million acres in Punjab and 6,500 acres each in Balochistan and KP and 886 acres in GB. Also 5,432 cattle heads have perished.
A total of about 946 persons have died in floods while 23,500 houses have been fully destroyed and another 27,260 houses partially damaged. In terms of loss of lives and housing, Khyber Pakhtunkhwa stands out on top, with 16,576 damaged houses including 761 completely destroyed. This is followed by complete destruction of 15,197 houses in Balochistan and then 14,787 houses damaged houses in Punjab, 10,232 of them completely destroyed. About 1700 houses in AJK, 1100 in Gilgit Baltistan and 1311 houses in Gilgit Baltistan have so far been reportedly destroyed.
Of the total 946 human losses, 774 people have lost their lives in KP, followed by 56 in AJK, 52 in Punjab, 34 in Fata, 24 in Balochistan and six in GB.
Learning lessons from the 2005 earthquake rehabilitation requires that the government should put in place additional stringent rehabilitation mechanism to avoid fiduciary losses.
Five years down the road, the people affected by devastating earthquake in Azad Kashmir and Khyber Pakhtunkhwa are still struggling to return to a normal life.
Their slower recovery may not have significantly dented the national economy. But the current flooding devastation, being widespread across the country, may not be that easier for the economy to absorb. So is the need for more caution and quick action for rehabilitation and recovery.
“The greatest discovery of all time is that a person can change his future by merely changing his attitude.”
Impact of floods on exports: MoC yet to start assessment
ISLAMABAD (August 18 2010)
The Commerce Ministry is yet to start assessment of floods' impact on exports, which showed around 23 percent growth in July 2010. The Ministry is holding internal meetings to finalise the presentation on Trade Policy 2010-11 to be given to Prime Minister Yousaf Raza Gilani, probably next week.
"All we know is that the flash-floods have caused wide spread damage to the crops, wheat stocks, livestock and communication system besides export industry in some parts of the country. It is understood that floods will impact exports, but it is too early to tell the exact hit," sources said. They said that all agencies of the government, World Bank and Asian Development (ADB) are engaged in assessing the damage and, as soon as the report is finalised, the government would release the damage figures.
Analysts believe that textile-related exports would suffer a major setback as thousands of acres of cotton have been destroyed in southern Punjab and Sindh. According to the Minister for Textiles, 30-40 percent cotton crop has been damaged due to floods, which would imply cotton production of around 9 million bales instead of 12-13 million bales estimated earlier.
"If the government does not make alternative arrangements to meet the cotton deficit, it will hit the whole textile chain, as well as employment besides the hit on foreign exchange earnings," said Bilal Mulla, a former chairman of Pakistan Readymade Garments and Exporters Association (Prgmea). On the other hand, the government would have to import excessively for rehabilitation of the affected areas.
Copyright Business Recorder, 2010
Sindh government's Rs 2 billion Ramazan Package: poor masses still deprived of facility
KARACHI (August 18 2010): The Sindh government has so far failed to ensure provision of wheat flour 'atta' during Ramazan to the poor masses at a subsidised rate of Rs 20 per kilogram (kg) - a subsidy given on the commodity for the holy month, as the flour millers have not yet established the promised stalls, outside their mills, to ensure the sale of commodity at subsidized rate, sources in the food department apprised Business Recorder on Tuesday.
It is pertinent to mention that Chief Minister Sindh Qaim Ali Shah had announced a Ramazan Package, before the start of the holy month, giving Rs 2 billion subsidy on the wheat flour. Under this package, all the flour millers of the province were bound to ensure sale of wheat flour to the poor lot of people at a subsidised rate of Rs 20 per kg.
Sindh government is giving a subsidy of Rs 1,625 per 100 kg bag to the flourmills and therefore they are bound to ensure availability of atta at Rs 10 per kg. However, the masses are still deprived of this facility, as most of the millers have not yet established stalls in this regard, sources said. They said the representatives of flourmills association had assured authorities that they would sell atta at Rs 20 per kilogram, and added that a huge quantity of subsidised wheat had already been provided to the mills under the Ramazan Package.
So far, the food department of Sindh has provided 1.2 million bags of wheat to 70 flourmills of Karachi, while 1 million bags have been given to the 75 mills of 22 districts of the province at subsidised rates, sources said. Instead of the reducing the prices of the daily-use commodities during Ramzan, profiteers and hoarders have sharply increased the prices of all the items, they said and added that wheat flour is being sold in the local market at Rs 32 to 34 per kg.
Food inspectors in Karachi and other districts of the province have also complained about the non-provision of the commodity by the flourmills, they said. They also said all the millers have been warned to ensure the sale of wheat flour at Rs 20 per kg. Sources also apprised that licenses of all those flour millers would be cancelled who fail to comply with the directives of the Sindh government regarding the provision of atta at Rs 20 per kg during Ramazan.
Furthermore, the sources said committees comprising ministers, advisors and the district co-ordination officers had been formed to monitor the sale of wheat flour, however the monitoring process got disturbed as most of the officials were busy in flood relief works in the interior parts of the province.
Copyright Business Recorder, 2010
July current account deficit amounts to $635 million
KARACHI (August 18 2010)
The country registered current account deficit $635 million during July 2010, the first month of the current fiscal year. The State Bank of Pakistan on Tuesday said that the country's current account deficit had dipped by 1.5 percent or $10 million, to $635 million, during July 2010 as compared to $645 million during July 2009.
However, this figure was higher by 44 percent than $441 million recorded in June 2010. July 2010 current account deficit without official transfers was also higher than the same period of last fiscal year. Without official transfers, current account deficit had climbed to $765 million during July 2010 as compared $648 million in July 2009, depicting an increase of 18 percent or $117 million during July 2010.
With a deficit of $222 million, the country's altogether income from abroad in July 2010 stood at $57 million as compared to $279 million payments of income to the overseas. Services sector exports presented a healthy and better performance as the services imports declined, while exports posted some rise. Services exports reached $282 million in first month of current fiscal year as compared to export of $249 million in corresponding period of last fiscal year, depicting an increase of $33 million in July 2010. In addition, services imports declined to $556 million in July 2010 from $566 million in July 2009.
With $1.645 billion exports and $2.914 billion imports, goods trade deficit stood at $1.269 billion in the first month of current fiscal year. "Some decline in current account deficit has been contributed by increase in goods and services exports, besides huge payments home remittances during July," analysts said.
However, they said that month on month basis current account deficit posted some increase, which is a matter of concern and policy makers should take some steps to control it. It may be mentioned here that during fiscal year 2009-10, the country had posted current account deficit of $3.495 billion as compared to $9.261 billion in fiscal year 2008-09.
Copyright Business Recorder, 2010
Time is the longest distance between two places.
Sovereignty and taxation
Sovereignty and taxation
While parliament may pass several resolutions about Pakistan’s sovereignty being trampled upon, until it gets its income tax mechanism in shape, it will remain a non-sovereign country.
By S. Akbar Zaidi
THE biggest cheer which the new budget and what constitutes the government’s economic policy has brought is that there will be no new taxes in the next fiscal year.
One can understand why representatives in parliament and the elite and growing middle classes would welcome such an extraordinarily short-sighted and disastrous move: no one wants to tax themselves and voluntarily give up their income or wealth, howsoever it may have been accumulated and earned.
However, by ignoring Pakistan’s core and chronic development problem — a shortfall in revenue — our elected representatives have done a great disservice to us, and continue to compromise Pakistan’s developmental prospects, as well as that illdefined, increasingly sacred, though hollow, word so bandied about in parliament, ‘sovereignty’.
Sovereignty is not about foreign militaries transgressing borders arbitrarily drawn on a map, but the ability to identify and resolve issues and problems which affect the people of a country. In today’s world, unlike the 18th, 19th or even the 20th century, sovereign nations are not necessarily military powers; they are economic powers. Japan and Germany come to mind.
Both have US troops based there and are part of military alliances and pacts, but no one questions their claim as sovereign powers. Additionally, sovereignty is not simply about economic wealth — pace Saudi Arabia — but about the ability, desire and responsibility to take unpopular and difficult, though necessary, decisions. All aspirations to be a sovereign nation must at least be based on this premise, and the ability to meet one’s needs based on one’s own resources must be central to this understanding.
A few numbers about taxation will emphasise the point about the atrocious state of revenue collection. The tax-toGDP ratio fell from an already low 11.4 per cent in 2003, to 9.5 per cent in 2009 despite the fact that the economy grew by almost six per cent per annum, and has fallen further to 9.1 per cent this fiscal year.
The finance minister in his budget speech last week, stated that the target for next year would not be much higher than this based on the fact that only 1.5 million of Pakistan’s registered 2.8 million income-tax payers have filed their returns this year. This means that the proportion of those paying income tax this year is way less than one per cent of Pakistan’s population.
Since the taxable income level is a mere Rs25,000 this fiscal year, it is clear that many millions of Pakistan who can pay their taxes are not doing so. This is not simply because of tax evasion or ‘corruption’, but also because of parliamen tary legislation which exempts certain sectors. Rough estimates suggest that at least five to six million Pakistanis, if not more, earn more than Rs25,000 a month. Clearly, there is a major problem regarding the country’s revenue and taxation structure to which everyone, including the finance minister, agrees.
What is quite astonishing then is in his budget speech the finance minister decided to raise the taxable income to almost Rs30,000 per month which means that the number of registered incometax payers will fall further. Despite the inflationary adjustment, there is no sense in this extremely illogical and irrational move, especially when there is some recognition regarding the scale of the problem. Rather than get more people to pay their taxes, parliament made sure that fewer will do so — ‘many lakhs’ fewer, as the finance minister gleefully stated in his speech.
While attempts are being made to perennially reform the Federal Board of Revenue (FBR) and to address leakages in the existing tax system, the FBR acknowledges that 79 per cent of rev- enue goes uncollected, a figure which translates to around Rs1,200bn. Even within the existing taxation system, the entire debt repayment for this year (Rs700bn) could be met if all taxes were collected, with Rs500bn still left over. But clearly, this is not going to happen. Importantly, this means taking more money from some who are already paying their taxes. While attempts at reform are worth pursuing, it is more important to bring in many more among the rich and elite, those who ostentatiously flaunt their wealth because they do not have to (or opt not to) pay any taxes.
The easy, though shamefully discriminatory, manner to raise revenue is to raise it through any form of indirect taxation. The Reformed General Sales Tax is a regressive and unfair tax for as long as most of the rich avoid taxes. Once the number of taxpayers is doubled, one could consider raising revenue from indirect taxes. Until then, it is the less well-off who subsidise the rich by being further taxed on consumption and indirect taxes. Tax policy should be as simple as possible, and there can be nothing simpler than treating all income in the same light regardless of the nature of activity or source of income, and taxing all incomes in a manner where the more you earn, the more taxes you pay.
The full-page Government of Pakistan advertisements about the highlights of the 2011-12 budget in all newspapers is a shameful waste of already limited public resources. It celebrates the fact that the government has not imposed any new taxes. While parliament may pass any number of resolutions about its sovereignty being trampled upon, until it gets its direct/income tax mechanism in shape, it will remain a non-sovereign, subservient, inconsequential and puny actor, dependent on handouts and subject to conditionalities, making a lot of noise but signifying nothing. Before someone says ‘sovereignty’ again in parliament, someone should turn around and say: ‘taxation first’. ¦ The writer is a political economist.
A successful person is one who can lay a firm foundation with the bricks that other throw at him. (David Brinkley)
Sindh presents Rs882m surplus, tax-free budget
Sindh presents Rs882m surplus, tax-free budget
KARACHI: The Sindh government on Friday presented a Rs882 million surplus tax free budget for 2011/2012 with a total outlay of Rs457.5 billion and total receipts pitched at Rs458.4 billion.
Sindh Finance Minister Murad Ali Shah presented the budget in the Sindh Assembly with the total development outlay of the province for the next fiscal year at Rs161 billion, under which Rs111 billion will be provided through the provincial government’s own resources while another Rs20 billion will be provided through foreign projects.
The provincial government has prioritised to divert most of its fiscal resources during the next fiscal year to education and health, women empowerment, energy sector and agriculture.
The finance minister said that the priority being given to the education sector can be gauged from the fact that the total current budget for education, including technical education, has increased from Rs22.8 billion during the outgoing year to Rs26.2 billion for FY12, showing an increase of 15 percent. “We believe that education is the key to changing the mindsets that have hindered our development,” Murad Ali Shah added.
The minister announced that the government had succeeded in establishing new universities at Lyari and Benazirabad. “The classes at both the universities are expected to commence from September 2011,” he added.
The minister also highlighted the steps being taken for the empowerment of women in the province. “Under the “Women Economic Empowerment” initiative, 13,000 women are being trained in stitching-tailoring at 350 village-based training centres in all the districts of Sindh,” he said. “Likewise, 6,700 women are being trained as Lady Livestock Workers and women Haaris have been given tracts of agricultural land,” he added.
The Sindh government allocated Rs6.9 billion for schemes of health sector. The minister said that during the ongoing fiscal year, the government kept Rs6.3 billion in the ADP for the health sector, “but due to floods, the allocation was revised to Rs4.095 billion.” Regarding the future schemes in the health sector, the minister said that the number of maternity homes functional round the clock would be increased to 100 from 28.
In the energy sector, the provincial government intended to continue the ongoing work on the Thar coal-fired energy projects. The government has allocated Rs3.71 billion for the energy sector. The minister stressed the need to materialise electricity generation from Thar coal.
The minister stated that the joint venture project of Sindh government and Engro Group, being executed through SPV of Sindh Engro Coal Mining Company, was created to boost the potential in a record period of eight months.
The Sindh/federal governments have included this project in the list of projects to be taken up with the Pak-China Joint Energy Working Group (JEWG), which was formed during the last visit of prime minister of the Peoples Republic of China to Pakistan. Leading Chinese companies have shown interest in executing this project, he added.
On the condition of financial arrangements, the minister said, ìThe mining and power generation from this project is expected in 2015/2016 upon the financing arrangement for the project.î He said that around $1.2 billion was needed in the next five years to develop the required infrastructure for Thar.
In the agriculture sector, the provincial government has allocated an amount of Rs6.053 billion that is 3.9 percent of the overall development budget. The provincial government estimated crop yield at 4.22 million metric tonnes during the ongoing year as against the last yearís estimate of 3.7 million metric tonnes.
During the ongoing year, the provincial government provided 4,736 tractors to farmers at subsidised rates; distributed 48,806 metric tonnes of wheat seed and 31,527 bags of Urea fertiliser free of cost to farmers in the flood-affected areas during the Rabi season 2010/2011.
About the launch of the Sindh Bank on March 31, 2011, the minister said that it had posted Rs451 million net income as against expenses of Rs68.76 million, depicting a pre-tax profit of Rs382.47 million for just three months of operations. ìThe bank management is expecting a profit of Rs1.5 billion in its first year of operation,î he added.
The minister said that during the next fiscal year, the focus will be on rehabilitation of the flood-affected villages. ìA major scheme for rehabilitation of 200 flood-affected villages consisting of 40,000 houses has been included in the ADP and an allocation Rs2 billion kept for the purpose,î the minister said.
About the agriculture income tax, the minister said that the concept was widely misunderstood. He said it was imposed and collected under the Sindh Land Tax and Agriculture Income Tax. ìOver the past 10 years, lesser control over revenue officers has led to collections going down by 50 per cent,î he added. Under this head, this year the collection target of Rs300 million will be achieved, the minister said. ìFor the next financial year, the target is set at Rs500 million,î he added.
About devolution, he said that as a result of the 18th Amendment, the Concurrent Legislative List of the Constitution had been abolished and the functions of 18 divisions were being devolved to provincial governments. The Sindh government has kept an allocation of one billion rupees to meet the cost of current expenditure of the devolved institutions/departments from July 1, 2011.
For law and justice, the Sindh government has increased the allocation from Rs2.49 billion during the outgoing financial year to Rs3.38 billion for the next financial year; an increase of 35 percent. ìThe increased expenditure will be incurred on the creation of 190 new posts and purchase of physical assets and transport for judicial officers,î the minister said.
A successful person is one who can lay a firm foundation with the bricks that other throw at him. (David Brinkley)
The international bank for reconstruction and development was constructed on 1945 on the behalf of catalog of Bretton wood system under Uno establishment. This is the bank in which low person would gain more efficiency and money health as to improve their own task, by helping others. like developed nations developed and poor nations progressment, progressment of one nation signs the emergence of development of worth loss angle progress as” tu na da pas da tu nd” means “progress is progress but development is necessary”.” As you do as you gain”.
Ok now I am going to discuss the departments under it
The department of development which is IDA.
The department of association IAD international association department or development.
The department of trade DDR the department of development and rearrangement.
The department of checking little goods and banks IFA international financial association.
Also CIA is its department to see its security and catalog.
THE term ‘circular debt’ in the power sector is widely understood in the country as representing an issue whose solution has eluded policymakers for the last three years. This article attempts to explain the genesis of the problem and ways to resolve it. Circular debt arises when one party not having adequate cash flows to discharge its obligations to its suppliers withholds payments. When it does so, the problem affects other entities in the supply chain, each of which withholds its payments, resulting in operational difficulties for all service providers in the sector, none of whom are then able to function at full capacity, causing unnecessary loadshedding. The circular debt numbers that get reported in the press tend to be the sum of the receivables of each organisation which ends up exaggerating the amount, simply because of double counting. After all, one party’s payables are the other party’s receivables, and logically these should cancel out when we subtract one from the other. At worst the net amount should be much smaller.
In our case, however, even this net unadjusted amount on June 30, 2011 was in excess of Rs200bn, which this year is growing by Rs95 crore a day! Let’s refer to this outstanding amount as the issue of ‘stock’. To be able to understand what this stock represents and its daily buildup let’s look at a simplified and abridged version of the supply chain which results in electricity being provided in our homes. Refineries provide oil to oil marketing companies. Most of the crude oil is imported and suppliers abroad have to be paid for them to maintain supplies; in their case there can be no debt beyond the terms agreed for the supply of oil.
The oil marketing companies sell oil to the IPPs or the Wapda-owned electricity generation plants (called Gencos) which produce electricity and sell it to the government-run distribution companies referred to as DISCOs (for example Lesco, Pesco, etc) which provide power to our homes and factories and bill us for this service.
The tariff (price) at which the Gencos sell to the DISCOs and the tariff at which electricity is supplied to us consumers is determined by Nepra,after receiving government approval.
The first problem which results in the receivables not cancelling out payables is when the tariff is unable to meet the costs of its generation and distribution. For instance, if the price of oil goes up internationally and tariffs are not revised upwards to account for this increase, there is an element of subsidy whose cost the government has to pick up.
So one component of what constitutes circular debt is the lower rate at which electricity is being charged to the consumer than the cost of its generation and distribution. By failing to foot this subsidy bill the government builds up the circular debt. The bulk of the issue arising from the failure to revise tariffs upwards on a timely basis has been resolved; the remaining adjustment required on this account is Rs100bn for this year, which also includes the cost of poor governance.
Next, three components, and the most critical ones, which raise costs, and feed the circular debt, are the following:
— The inefficiencies of governmentowned generation and distribution companies, cosy deals struck with providers of rental power plants, overstaffing, free provision of electricity to Wapda employees (this costs other consumers Rs10 crore a day), poor maintenance of plant equipment, obsolete technologies (resulting in technical losses), corruption, all of which simply add to the cost of electricity that consumers are being constrained to bear with equanimity through tariff increases.
— The massive issue of electricity theft — the cases of DISCOs in Hyderabad, Peshawar, Quetta and Fata are now well known; with literally no one paying in Fata.
— Poor collection of electricity bills. Rs90bn alone is due from provincial governments. Powerful private individuals and companies are also defaulters as are those who in collusion with Wapda employees do not pay without being disconnected — Rs120bn is due from private consumers! To summarise, the issues are failures to revise electricity tariffs on a timely basis; prevent electricity theft; and ensure collection of billings speedily and disconnecting those not paying their bills; disconnections will actually also reduce the extent of outages/loadshedding. In other words, the principle issue is that of governance.
So what is the solution? The liabilities in the shape of the inherited ‘stock’ of Rs200bn can be cleared as a one-time effort — even, dare I say it, ‘through printing of money’ (the latter admittedly at the expense of a slightly higher rate of inflation) provided, and this would be the major caveat, we take firm and clear initiatives that will prevent the build-up of the circular debt again. I highlight this because the prevailing incentive structures enable those operating the sector to live with the comfortable feeling of business as usual (with the same level of incompetence and degree of poor governance), convinced that the government will simply step forward, yet again, a few months down the road to bail out them out.
From these arguments and facts, it should be fairly obvious that the recent decision of the government to privatise the management of the Gencos not just betrays a weak diagnosis of the problem of circular debt but also overlooks the urgency to ensure continued provision of reliable power so that the economy remains a growing concern — the inefficiencies of Gencos is a relatively minor issue. The principle issue is poor governance, reflected in the sheer failure to weaken the control of powerful lobbies who continue to ride this gravy train while the rest of the population wrings its hands helplessly.
It is difficult to fathom how privatising management of generation companies can solve the problem if electricity tariffs are not raised in a timely manner and government-managed DISCOs fail to prevent electricity theft or col lect their bills regularly and disconnect those not paying their bills i.e. take actions that will ensure cash flows to pay Gencos and suppliers of fuel regularly.
Moreover, with existing IPPs already issuing notices to the government that either their dues be paid or they will wind up their operation, it would not be a good advertisement for any entrepreneur seriously contemplating such an investment, unless he is foolhardy or knows something we don’t — the latter could be a situation in which he will get paid a minimum capacity payment without having to run the plant in the express knowledge that fuel, especially gas, would not be supplied.
In other words, we could just end up facilitating a scam, with a government liability being created in the shape of a capacity payment which never had to be discharged while the generation company was owned by Wapda.
So the correct solution is to either immediately privatise the management or ownership of DISCOs (under an appropriate regulatory framework) or hand them over to the provincial governments. The electricity can be supplied at the provincial borders for the provincial governments to purchase it from the Gencos and manage the DISCOs, thereby relieving Islamabad’s overstretched budget from the burden of this seemingly neverending electricity subsidy. ¦
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