[CENTER][B][SIZE="4"]Businessmen urged to set up new industrial units [/SIZE][/B][/CENTER]
[B]RECORDER REPORT

LAHORE
(November 16 2008)[/B]

The anti-industry regulatory framework has kept the potential investors away who could have established new industry in the country but they opted investment in real estate, capital market or other sort of businesses for short-term gains.

"Unfortunately our economic managers have not right approach to accelerate industrialisation without which Pakistan can not survive in the longer run", said Engineering Consultant and Founding Chairman of the Pak-China Economic Relations Standing Committee of the Lahore Chamber of Commerce and Industry Siddiq ur Rehman Rana.

Rana, who was the key player in preparing 5-year Pak-China Economic Co-operation Plan to enhance balance trade between the two countries to $15 billion, said, "I am contesting the LCCI election from corporate class with the objective to execute plan through public-private partnership without further delay.

To a question, he said that under Free Trade Agreement, Pakistan has real potential and can export about 1700 non-traditional items. Fortunately, about 350 commercial value herbs including 56 high value herbs can be exported to China, which is currently importing these herbs from other countries, he added.

Talking to Business Recorder, he said our businessmen need to change their investment priority because the real estate or capital market are no more viable and profitable in the long-run rather they should set up new industrial units to make the country economically strong.

"It is right time to take rational and prudent decisions to ensure conducive industrialisation environment because growth of industry and Greenfield investment is the solution to present economic crises" he maintained.

Interestingly, no province, except NWFP, has department of Science and Technology that reflects the government priority, he said. He suggested that the government should immediately set up Real Economy Development Boards at district level, which could provide guidance and help setting up of new industrial units in different sectors.


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[CENTER][B][SIZE="4"]
Restoration of investor confidence vital to economy [/SIZE][/B][/CENTER]
[B]RECORDER REPORT

KARACHI
(November 16 2008)[/B]

Speakers at an investment forum said that the nation would come out of depression and successfully put the economy at right track. However, they said, restoration of investors and general public confidence is necessary for economic revival. The one day investment forum on "Investing in Change: Pakistan and World" was organised by BMA Funds at a local hotel here on Saturday.

Speaking on this occasion, former Governor of State Bank of Pakistan (SBP) and Director of Institute of Business Administration (IBA) Dr Ishrat Hussain said that Pakistan should go to IMF without wasting time. He said that Pakistan had a growth rate of 1.8 per cent in 2000, when it entered into IMF programme. After entering into IMF program the country achieved an average GDP growth of seven per cent.

The IMF programme helped country back on track and Pakistan established access to international markets. Pakistan also launched European Bond and Islamic Sukuk. According to him the poverty reduced to 25 per cent from 33 per cent and the unemployment rate slashed to 6.2 per cent from 8.5 in the same period after entering into the IMF programme.

He said that increase in discount rate is one of the measure to control inflation. He was of the view that government should not borrow from the central bank. S. Ali Raza, President, National Bank of Pakistan (NBP), said that the banking system in the country is standing on strong footing.

Tariq Iqbal Khan, Chairman NIT, said that the investment are always made on expectations of good returns. Waqar A. Malik, President, OICCI; Farrukh H. Khan, CEO, BMA Capital; Muddassar Malik, CEO, BMA Fund; Tawfiq A. Hussain, President, Samba Bank and others also spoke on this occasion.


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[B][CENTER][SIZE="3"]China gives $500 million to Pakistan: envoy [/SIZE][/CENTER][/B]

[B]ISLAMABAD
(November 22 2008)[/B]

China has handed over $500 million to Pakistan, a private TV channel reported on Friday. Talking to a private TV channel, Chinese Ambassador in Pakistan said $500 million have been handed over to Pakistan to stabilise its foreign exchange reserves.

He said Pakistan and China enjoys deep and friendly relations and China would take more steps in future to maintain the same relations. He said China has provided $1.5 billion to Pakistan since 1998.


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[B][CENTER][SIZE="4"]Foreign investors withdraw $4.434 million [/SIZE][/CENTER][/B]

[B]AHMED MALIK
KARACHI
(November 22 2008)[/B]

The outflow of portfolio investment from the country's equity market continued as the foreign investors withdrew another $4.434 million during the outgoing week ended November 21. "The offshore investors remained cautious over the deteriorating economic condition and uncertainty over removal of price floor mechanism and opted to offload their holdings", analysts said.

Due to unavailability of buyers at current levels, off-market trading also continued with an average discount of around 25 per cent during the week. According to the National Clearing Company of Pakistan data, the cumulative outflow of portfolio investment has increased to $8.761 million in the current month from November 01 to November 21.

The cumulative figure of this mod of investment was recorded at negative $354.220 million in the period from January 01, 2008 to November 21, 2008. The week started on a negative note and an outflow of $272,471 was witnessed on the first day of the week. This trend continued as the foreign investors withdrew another $2,018,232 on Tuesday. An inflow of only $60 was witnessed on Wednesday. The foreign investors once again opted to offload their holdings and an outflow of $1,565,989 was witnessed on Thursday and $550,606 on Friday.


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[CENTER][B][SIZE="4"]Inflation surges by 29.02 percent [/SIZE][/B][/CENTER]
[B]
ZAHEER ABBASI
ISLAMABAD
(November 22 2008)[/B]


The Inflation measured through SPI has surged by 29.02 per cent on week ending November 20 over the same period of last years on the back of rising prices of 17 essential commodities, according to Federal Bureau of Statistics. The data released on Friday showed that combined SPI has surged from 27.91 per cent from last week to 29.02 per cent on November 21, showing 0.92 per cent increased during the week.

With this increase in the SPI, the dearness for the low income group of Rs 3000 monthly income was recorded 29.33 per cent, followed by 29.74 per cent for families of Rs 3001-5000 monthly income. The dearness was 30.06 per cent for monthly income of Rs 5001-12000 and 28.56 per cent for above Rs 12000 income group.

The data on SPI released by the FBS showed an increase in the prices of 17essential commodities, decline in 18 whereas prices of 18 commodities remained stable during the period under review. The price of kilogram tomatoes have increased during the week to Rs 35.71 from Rs 31.57, onions per kilogram to Rs 25.02 from Rs 22.34, chicken (Farm) Kg. to Rs 98.22 from Rs 92.33.

Electric charges 1-100 unit to Rs 3.22 from Rs 3.07, telephone local call to Rs 2.42 from Rs 2.31, egg hen (Farm) doz. to Rs 65.83 from Rs 64.22, tea packet 250 gram. to Rs 106.47 from Rs 104.71, Electric bulb 60wats each to Rs 13.91 from Rs 13.74, bread plain mid size each to Rs 23.97 from Rs 23.68, potatoes kg to Rs 27.53 from Rs 27.22, firewood 40 kg to Rs 265.06 from Rs 263.98, mash pulse washed kg to Rs 74.82 from Rs 74.59, bananas doz. to Rs 31.86 from Rs 31.78.

Shirting meter to Rs 79.06 from Rs 78.91, mutton kg to Rs 256.51 from Rs 256.20, beef kg to Rs 142.20 from Rs 142.13, Masoor Pulse Washed kg to Rs 129.28 from Rs 129.26. According to the FBS, the prices of 18 essential commodities remained stable during the week. However, a comparison with the same period of last years showed that majority of them increased in double digit.

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[CENTER][B][SIZE="4"]Inter-corporate debt rises to over Rs 300 billion [/SIZE][/CENTER]

ZAHEER ABBASI [/B]

ISLAMABAD (December 31 2008)

The inter-corporate circular debt has risen to over Rs 300 billion in November against Rs 175 billion in June, State Bank quarterly report based on data available till end December 2008 revealed. This, argue experts in the Ministry of Finance on condition of anonymity, will severely compromise the government's ability to formulate a plan that envisages elimination of the debt by the end of 2009.

The Letter of Intent submitted to the International Monetary Fund, agrees to formulate a plan with a timeframe by March 2009 to eliminate inter-corporate circular debt. Inter-corporate debt has risen by over 71 percent in spite of the decline in the international price of oil. The circular debt is a three-edged phenomenon that has led to severe energy shortages even during the winter months when demand is considerably lower.

The SBP said that the issue of inter-corporate debt, which emerged in financial year 2008, became large and more complex during the initial months of the current fiscal because the information collected from selected corporate entities showed that it sharply increased during the first five months of current fiscal and rose to over Rs 300 billion.

The issue of inter-corporate debt, according to the SBP rose mainly as the government was providing subsidy on fuel prices to domestic consumers and power utilities faced losses. The oil prices have come down sharply during the last few months while subsidy on electricity is restricted to the life line consumers. The resolution of inter-corporate debt is critical otherwise the energy crisis will remain.

The delays in the settlement of oil price differential claims by the government and the utilities forced a few OMCs to borrow from banking system against the government guarantee in 2008. During the initial months of FY09, circular debt situation worsened despite the fact the government has phased out subsidy on fuel prices.


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[B][SIZE="4"]Non payment of trade license fee: shopkeepers, traders being issued arrest warrants [/SIZE][/CENTER]

RECORDER REPORT [/B]
KARACHI (December 31 2008)

Shopkeepers and traders of 17 towns of the city continue to receive summons and arrest warrants from judicial magistrates for not paying the trade license fee for the last three years. According to a Karachi Chamber of Commerce and Industry (KCCI) report, the City District Government of Karachi (CDGK) had introduced trade license fee three year back.

Depending on the category of business the government had fixed the amount a minimum Rs 100 to Rs 2000 as maximum as license fee. The government justified the fee would be impose on those businesses which fell in the category of dangerous trade like cloth, paper, wool, chemicals, plastic, furniture, electronic items, rubber, toys, shows, leather, paints tents etc, as these items may lead to fire or fatal accidents. Prior to introducing the fee the CDGK issued advertisement in newspapers seeking suggestions from the trade bodies about the move, but the traders gave a very poor response while other trade associations totally rejected the fee.


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[SIZE="4"]LTIA industrialists to close down their units [/SIZE][/CENTER]

RECORDER REPORT [/B]
LAHORE (December 31 2008)

The industrialists of Lahore Township Industrial Area (LTIA) have decided to close down their industrial units to protest against the anti-industry behaviour of Lesco authorities. The decision to this effect was taken at an emergent meeting of Lahore Township Industrial Association held under the chairmanship of LTIA chairman Baber Mehmood Chaudhry.

Among others, LTIA vice-chairmen Chaudhry Zaheer Bhutta and Wasimuddin Chughtai also attended the meeting. Addressing the meeting, Baber said that despite an agreement with the Lesco authorities that they would ensure continuous supply of electricity to the industrial units during day timings, long duration unscheduled power outages have become order of the day in the industrial estate.

He said that there are a number of industrial processes that require continuous supply of power but it seems that the Lesco authorities are least concerned to realise the gravity of situation. He appealed to the Federal Minister for Water and Power Raja Pervaiz Ashraf to look into the matter and direct Lesco authorities for continuous supply of electricity to he industrial area.


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[FONT="Comic Sans MS"][SIZE="5"][COLOR="Black"]The Economy Is in a Depression[/COLOR][/SIZE][/FONT]
[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]Prof. Peter Morici
1/11/2009
The Labor Department reported on Jan. 9 that the economy lost 524,000 payroll jobs in December, and average employment was 1.3 million lower in the fourth quarter than in the third quarter. I believe the economy is already in the jaws of a depression.

Companies have shed 2.6 million jobs since December 2007 as the full weight of the banking crisis, trade deficit with China and burdens imposed by high-priced imported oil are bearing down on manufacturing, construction and the broader economy with unrelenting pressure.

Unemployment increased to 7.2% in December. However, factoring in discouraged workers, unemployment is closer to 9.4%. Add workers in part time positions that cannot find full time employment and the hidden unemployment rate is 14.5%.

Recession or Depression?

The economy contracted at about a 5% annual rate in the fourth quarter. This looks worse than a recession to me.

Recessions are like stock market corrections -- after a time, equity prices rebound without government intervention. Federal Reserve interest rate cuts and stimulus tax rebates and spending have shortened the lives and eased the impact of post-World War II recessions, but those policies did not end them. The economy self-corrected.

A depression is not self-correcting. Roosevelt administration stimulus packages -- huge deficit spending -- eased the pain but failed to end the Great Depression. Roosevelt’s policies did not put the U.S. economy on a sustainable growth path because New Deal policies worsened structural problems that pulled the economy down in the first place. For example, the New Deal proliferated monopoly pricing, extended the life of undersized farms, raised structural savings rates, and created a system of home lending too dependent on federally sponsored banks.

The challenges facing President-elect Barack Obama could not be clearer. The current economic slowdown has two structural causes -- bad management practices at the large money center banks and the huge foreign trade deficit. These problems are not self-correcting.

The economy will not recover without fundamental changes in banking and trade policy. A large stimulus package, though necessary, will only give the economy a temporary lift. Then unemployment will rise again and continue at unacceptable levels indefinitely without successively larger stimulus packages and huge federal budget deficits. The economy is in a depression, not a recession

Obama must ensure that the banks use the trillions of dollars in federal bailout assistance to renegotiate mortgages and make new loans to worthy homebuyers and businesses. Obama must make certain that banks do not continue to squander federal largess by padding executive bonuses, acquiring other banks and pursuing new high-return, high-risk lines of businesses in merger activity, carbon trading and complex derivatives.

Industry leaders like Citigroup have announced plans to move in those directions. Many of these bankers enjoyed influence in and contributed generously to the Obama campaign. Now it remains to be seen if a President Obama can stand up to these same bankers and persuade or compel them to act responsibly.

In addition, Obama must address the huge cost of imported oil and the trade deficit with China. Otherwise any effort to resurrect the economy is doomed to create massive foreign borrowing, another round of excessive consumer borrowing, and a second banking crisis that the Treasury and Federal Reserve will not be able to reverse.

Ultimately, reducing the oil import bill will require higher mileage standards for automobiles and assistance to automakers to accelerate the build-out of alternative, high-mileage vehicles. Fixing trade with China will require a tax on dollar-yuan transactions if China continues to refuse to stop subsidizing dollar purchases of yuan to prop up its exports and shift Chinese unemployment to the U.S. manufacturing sector.

Near term, a stimulus package focused on infrastructure is critical for resuscitating growth. The recent round of tax rebate checks ended up in savings accounts or spent at the Wal-Mart on Chinese goods, and did little to create jobs or accelerate growth. Whereas projects to repair roads, rehabilitate schools and refurbish public buildings would create high-paying jobs at home and provide a legacy in capital improvements that assist growth now and in the future.

But without fixing the banks, energy and trade with China, the lift provided by the stimulus package will be temporary and unemployment will rise again. The economy would then require progressively larger stimulus packages -- and foreign borrowing to finance them -- to keep Americans employed. Eventually, the foreign line of credit would run out, and widespread unemployment, depression and economic decline would follow.

Politically correct promises to create millions of new jobs producing alternative fuels makes effective presidential campaign slogans, but realistic policies for governing require aggressive development of more conventional oil and gas, as well as non-conventional energy sources, and efforts to improve the energy efficiency of personal transportation. If the Democrats are not willing to drill for more oil off shore and take on the automobile industry’s resistance to significantly higher mileage vehicles, the U.S. economy will be even more indentured to Persian Gulf oil exporters at the end of President-elect Obama’s first term than it is today.

Finally, the dollar is too strong against the Chinese yuan, Japanese yen and other Asian currencies. The Chinese government intervenes in foreign exchange markets to suppress the value of the yuan to gain competitive advantages for Chinese exports, and the yuan sets the pattern for other Asian currencies. Similarly, Beijing subsidizes fuel prices and increasingly requires U.S. manufacturers to make products in China to sell there.

Ending Chinese currency market manipulation and other mercantilist practices are critical to reducing the non-oil U.S. trade deficit, and instigating a recovery in U.S. employment in manufacturing and technology-intensive services that compete in trade. Yet neither President Bush nor congressional leaders like House Ways and Means Chairman Charles Rangel and New York Sen. Chuck Schumer have been willing to seriously challenge China on this issue, and Sens. John McCain and Obama appeared comfortable with continuing their approaches during the campaign.

Now Obama must alter his position and get behind a policy to reverse the trade imbalance with China, or preside over the wholesale destruction of many more U.S. manufacturing jobs.

In the end, without assertive steps to fix trade with China, as well as fix the banks and curtail oil imports, the Bush years will seem like a walk through the park compared to the real income losses Americans will suffer during the Obama years.

The choices for the incoming president are simple. It’s either recovery or depression. Fix the banks, energy policy and the trade situation with China or become America’s Nero[/COLOR][/SIZE][/FONT]
[URL="http://www.globalpolitician.com/25390-economics"]http://www.globalpolitician.com/25390-economics[/URL]

[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]
[SIZE="4"]Bush Auto Plan Will Test Obama's Union Loyalties [/SIZE]
Prof. Peter Morici
1/8/2009

President Bush has agreed to lend GM and Chrysler $17.4 billion on the condition these firms complete a plan to accomplish financial viability.

The agreements set goals for automakers: converting two-thirds of their debt into equity; paying company stock to fund one half of the Voluntary Employee Benefits Associations, which fund retiree health care benefits and remove these costs from future liabilities; aligning wages, benefits and work rules with U.S. Nissan, Toyota or Honda operations.

These goals are generally consistent with the conditions I outlined as necessary for the Detroit Three to achieve viability when I testified before the Senate Banking Committee on November 18. For example, laid off workers could no longer sit in the Jobs Banks collecting 90 percent of pay and benefits indefinitely and engaging in productive activities like pinochle.

Financial viability requires projecting a positive net present value, taking into account all current and future costs. It does not require a positive cash flow by March 31. In fact, wage and benefit cuts only need be accomplished by December 31, 2009.

Given the depressed auto market, a positive cash flow cannot be accomplished soon, and GM and Chrysler will be asking for more federal loans when they table their plans by March 31. If the auto market stays depressed into 2010, Ford will likely seek assistance. Given the likely duration of the recession, loans of well over $100 billion will be needed. Much of those could prove gifts, with the loans never truly repaid.

Unless the automakers significantly reduce their debt, jettison retiree legacy liabilities, and align wages, benefits, work rules with those of Japanese transplants, they simply cannot hope to be consistently profitable.

Yet, the agreement permits the automakers to vary from those conditions if they can still demonstrate a net positive present value. Enter the accounting magicians

UAW contracts are exceedingly complex. GM and UAW leaders have mastered obfuscating the consequences of their pay structure and work rules. Calculations of net present value will importantly hinge on forecasts of future car sales and wages paid by Toyota, Nissan and Honda. A few quick pen strokes and a lousy business plan can be made a winner, with costs to taxpayers in unpaid loans only becoming apparent years later.

Barack Obama owes organized labor a huge debt for his November victory. UAW President Ron Gettelfinger can be expected to try to sell Obama labor agreements that appear to create more concessions than are real and leave the Detroit Three in the red going forward.

Fooling Obama would create loans the Detroit Three never can really repay. The government could force payment at the expense of the next creditors in line—the large U.S. banks—but the federal government is already subsidizing their losses.

One way or the other ordinary citizens who don’t earn nearly the pay and benefits autoworkers receive would be paying taxes to subsidize their rather generous lifestyles, much as taxpayers are financing the bloated bonuses at large New York banks requiring federal dole to stay afloat.

President Bush has punted the auto mess to his successor, and one of three outcomes is possible.

President Obama can require the automakers and UAW to come up with a contract ordinary mortals can understand, eliminate all the foolish job classifications and work rules, and establish pay rates that make the Detroit Three competitive.

Obama can push the automakers into a prepackaged Chapter 11, perhaps by providing some financing to ensure suppliers are paid and companies can continue to operate, and let a bankruptcy judge impose the essential conditions of the Bush agreement.

He can let the Detroit Three continue their profligate behavior, providing subsidies masquerading as loans.

Obama faces the same kind of tough choice Bush did when he lavished generous subsidies on agriculture at the beginning of his presidency. If Obama caves to union pressures and chooses to subsidize the automakers, other unionized industries will line up. Market discipline will not apply to the eight percent of private workforce represented by unions, and damn the majority that really elected him.[/COLOR][/SIZE][/FONT]

U.S. Economy Records Huge Trade Deficit
 

[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]Prof. Peter Morici
1/18/2009
Tuesday, the Commerce Department reported the November trade deficit was $40.4 billion. This was down from $56.7 billion in October, largely because oil prices fell and the recession is curbing demand for imported consumer goods and petroleum.

To the extent stimulus packages expected to be enacted in the United States, Europe and China lift the global economy, the reduction in the trade deficit will reverse. Oil prices will rise again, and with China increasing subsidies on exports, U.S. imports of consumer goods will soar. The trade deficit will emerge as a major drag on the demand for U.S. made goods and services, and pull the U.S. economy back into recession as the effects of stimulus spending wear off.

At 3.4 percent of GDP, the huge trade deficit indicates Americans continue to consume much more than they produce and borrow too much from the rest of the world, especially China and the Middle East oil exporters.

The huge trade deficit is nearly entirely by trade with China, imports and automobiles and parts. These are caused by a combination of an overvalued dollar against the Chinese yuan and Chinese protectionism, a dysfunctional national energy policy that increases U.S. dependence on foreign oil, and the competitive woes of the three domestic automakers. Together, the trade deficit with China and on petroleum and automotive products account for virtually the entire deficit on trade in goods and services.

To finance the trade deficit, Americans are borrowing and selling assets at a pace of about $400 billion a year. U.S. foreign debt exceeds $6.5 trillion, and the debt service comes to nearly $2,000 a year for every working American.

The trade deficit will make the recession longer and deeper, and lessen the positive benefits of President-elect Obama’s proposed stimulus package. If Obama does not fix the banks and significantly reduce the trade deficit, stimulus spending will not permanently pull the economy out of recession, and the economy will slip into a prolonged malaise or depression.

Simply, money spent on Middle East oil, Chinese televisions and coffee markers, Japanese and Korean cars can’t be spent on U.S. made goods and services, unless offset by a comparable amount of exports. Since U.S. imports exceed exports by 3.4 percent of GDP, the trade deficit creates an enormous drag on demand for U.S.-made goods and services. Along with the credit crisis and resulting slowdown in new housing and commercial construction, the banking crisis and trade deficit could push unemployment above 10 percent for a long time.

The trade deficit imposes a significant tax on GDP growth by moving workers from export and import-competing industries to other sectors of the economy. This reduces labor productivity, research and development (R&D) spending, and important investments in human capital. In 2009 the trade deficit is slicing $400 billion to $600 billion off GDP, and longer term, it reduces potential annual GDP growth to 3 percent from 4 percent.

Cutting the trade deficit in half would pull the country out of recession and get the economy on a stable growth path. A fiscal stimulus package, increasing the federal budget deficit by two or three percent of GDP, will make things much better for a period of time; however, successive stimulus spending and permanently larger federal budget deficits will be needed to sustain the GDP and employment gains. Whereas, cutting the trade deficit in half would yield lasting benefits for U.S. GDP and employment growth, far transcending any fiscal stimulus in its permanent effects. Cutting the trade deficit would substantially increase tax revenues and reduce the federal budget deficit.

Each dollar spent on imports that is not matched by a dollar of exports reduces domestic demand and employment, and shifts workers into activities where productivity is lower. Productivity is at least 50 percent higher in industries that export and compete with imports, and reducing the trade deficit and moving workers into these industries would increase GDP.

Were the trade deficit cut in half, the movement of workers and capital into more productive export and import-competing industries would increase by at least $400 billion or about $2500 for every working American. Workers’ wages would not be lagging inflation, and ordinary working Americans would more easily find jobs paying higher wages and offering decent benefits.

Manufacturers are particularly hard hit by this subsidized competition. Through recession and recovery, the manufacturing sector has lost more than 4 million jobs since 2000. Following the pattern of past economic recoveries, the manufacturing sector should have regained at least 2 million of those jobs, especially given the very strong productivity growth accomplished in durable goods and throughout manufacturing.

Longer-term, persistent U.S. trade deficits are a substantial drag on productivity growth. U.S. import-competing and export industries spend three-times the national average on industrial R&D, and encourage more investments in skills and education than other sectors of the economy. By shifting employment away from trade-competing industries, the trade deficit reduces U.S. investments in new methods and products, and skilled labor.

Cutting the trade deficit in half would boost U.S. GDP growth by one percentage point a year, and the trade deficits of the last two decades have reduced U.S. growth by one percentage point a year.

Lost growth is cumulative. Thanks to the record trade deficits accumulated over the last 10 years, the U.S. economy is about $1.5 trillion smaller. This comes to about $10000 per worker.

Had the Administration and the Congress acted responsibly to reduce the deficit, American workers would be much better off, tax revenues would be much larger, and the federal deficit could be eliminated without cutting spending.

The damage grows larger each month, as the Administration and Congress dally and ignore the corrosive consequences of the trade deficit. [/COLOR][/SIZE][/FONT]

[B][SIZE="4"][CENTER]Netherlands to reinforce trade ties with Pakistan[/CENTER][/SIZE]

RECORDER REPORT
SIALKOT (January 20 2009)[/B]

Strenuous efforts would be made for reinforcement of bilateral trade between Netherlands and Pakistan as both are enjoying very friendly and cordial relations since long and with the passage of time these ties would be further cemented.'

The Ambassador of the Kingdom of Netherlands to Pakistan, T Jeerd De Zwaan said. Addressing the members of Sialkot Chamber of Commerce and Industry (SCCI) on Monday, he said that Netherlands under the Co-operation Plan 2008-2011, would invest in the fields of education, water, sanitation and environment in Pakistan. The Netherlands was the third largest investor after the United Kingdom and United States of America in Pakistan, he revealed.

The Netherlands Ambassador further stated that buyers had become more conscious about the quality control and issues pertaining to labour and it is high time that business community of Pakistan should concentrate on these issues and ensure hurdle free exports to their foreign buyers.

The President SCCI, Hassan Ali Bhatti in his welcome address urged the need of further strengthening the bilateral trade ties between the two friendly countries. He also invited Dutch business tycoons to invest in the second biggest Export Processing Zone of Pakistan adding that the zone provides extraordinary facilities and benefits to both foreign and local investors.

Bhatti pointed out that there was unlimited scope of expanding trade ties between Pakistan and Netherlands and suggested active involvement of Netherlands Chambers, which could serve as resource for exchanging information about trade. He also viewed that exchange of trade delegations and holding of joint trade exhibitions would further help in promoting bilateral trade.

The SCCI Chief proposed that Centre for the Promotion of Import (CBI) should hold training course on export marketing at SCCI for providing tailorised training for the exporters. 'The SCCI would provide all necessary help and support for holding the training course,' he added. Earlier, the Ambassador visited surgical and sports industrial units of Sialkot.


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[B][SIZE="4"][CENTER]Italian envoy praises potential of local business community [/CENTER][/SIZE]
RECORDER REPORT
ISLAMABAD (January 20 2009)[/B]

Italian Ambassador to Pakistan, Vincenzo Pratis expressed his confidence on the potential of Pakistani entrepreneurs to bail out the country from current economic crisis, saying business community of Pakistan has the capacity to earn more space in international market and bring the country out of crisis.

The trade volume of Pakistan and Italy reached at $700 million per annum and there are possibilities to take it to new heights with mutual co-operation, the Italian envoy said while talking to President Rawalpindi Chamber of Commerce and Industry (RCCI), Syed Asad Mashhadi and other senior executives of the chamber on Monday.

The envoy visited RCCI and exchanged views with business leaders of the region for increasing the bilateral trade between the two countries. He said that Italian investors take keen interest in investing in different sectors in Pakistan and they found the atmosphere cordial for their investment. There are many sectors of economy in Pakistan where foreign investors want to invest, he said. "There are more than 90,000 Pakistani expatriates working in Italy, who are playing a good role in economic development of Italy, besides sending a huge amount of foreign exchange to Pakistan as remittances", he said.

Italian envoy said that after construction of Gwadar Port, Rawalpindi region has emerged as gateway to Central Asia, Afghanistan and China and the business community of Rawalpindi has a great role in economic stability of Pakistan. "Italy is producing best machinery to be used in different sectors and Pakistan manufacturers must get benefits by using this machinery", he added.

Earlier, in his welcome address Syed Asad Mashhadi said that besides Germany, France, Netherlands and China, Italy is one of the biggest business partners of Pakistan. "We have a huge potential to increase the trade volume between Italy and Pakistan and it is the responsibility of private sector of two sides to explore these vistas", he added.

He said that the exports of Italy to Pakistan during last fiscal year were 3.76 per cent of total exports while the import was 1.78 per cent of the total. Italian investors will find infrastructure, agriculture, transport, leather, textile and marble attractive sectors to invest and they will get good profit in these sectors here, he added.


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[B]
[SIZE="4"][CENTER] Rs 20 billion uplift projects for Islamabad planned: Babar[/CENTER][/SIZE]

RECORDER REPORT
ISLAMABAD (January 20 2009)[/B]

Federal Government has planned mega development projects costing Rs 20 billion for infrastructure development in capital and its rural areas, said Baber Awan, Federal Minister for Parliamentary Affairs, here on Monday. The objectives of the projects are to facilitate people of Islamabad and adjacent rural areas by providing them high standard health, education, water, sanitation and other recreational facilities, he added.

He was addressing a public rally after inaugurating a bridge at Golra Sharif, a sub-urban area of the federal capital. He said that the government is ready to execute these mega projects this year and people will get benefits of these soon. He said that mega projects including hospitals and schools would start this year to facilitate the people of Islamabad and of the adjacent urban areas. He said that Golrra Sharif is an historic place and to maintain its glory, more developmental projects for health and education would be started very soon.

He said that there is full harmony and unanimity of views between President Asif Ali Zardari and Prime Minister Yusuf Raza Gillani on all matters. "People talking about any differences between these two top leaders are living in fools' paradise", he added. Regarding repealing 17th amendment, he said PPP is committed to uphold supremacy of constitution and rule of law and it will support the bills moved in Parliament to repeal the 17th Amendment.


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[B][CENTER][SIZE="4"]Economy suffers over $35 billion loss due to Afghan turmoil [/SIZE][/CENTER][/B]

[B]LAHORE (February 12 2009)[/B]

Business community on Wednesday urged Obama's special representative, Richard Holbrooke who is currently visiting Pakistan, to help provide direct access to Pak products in US markets as Pak economy has so far suffered irreparable huge loss of $35 billion direct and indirect due to turmoil in Afghanistan.

Founder chairman Pak-US Business Council and VP Saarc Chamber of Commerce and Industry, Iftikhar Ali Malik while talking to APP here, said that "we entire business community welcome Richard on exploratory visit to Pakistan". He said it is on record that Pakistan is the only country in the world which has not only suffered tremendous economic loss but also huge human loss in war against terror.

Iftikhar said that more than three million Afghan refugees in Pakistan were also posing security risk. He said that entire Pakistani nation including business community, all political parties under the dynamic leadership of President Asif Ali Zardari and guidance of Prime Minister Syed Yousuf Raza Gilani, people from all strata of the society stand united against the menace of terror and fully committed to defeat it as Pakistan has always been an active US associate against the menace of terror.

He said due to war on terror, Pakistan's national economy is exclusively suffering a net loss of $6 billion annually as a fallout of the war against terror, which has displaced thousands of people and endangered security in the country.

In the prevailing scenario, United States must provide direct market access to Pak products on zero rate duty to help stabilise the country's bleak economy in the wake of the war against terror.

Iftikhar who is also co-chairman businessman panel, the largest alliance of chambers in the country and ruling group in FPCCI on behalf of entire business community again urged for US assistance to Pakistan to help overcome the economic crisis, by restoring the quota for Pakistan at par with all other under developed countries.

"The US should buy back products from industrial zones in Pakistan and help strengthen the existing industrial zones with the provision of modern infrastructure", he said, adding that proper and timely American assistance will help ensure durable peace and stamp out terrorism, besides strengthening the democratic government in Pakistan.

Observing that due to the unrest and turmoil in a neighbouring country, he said a major chunk of Pak food stock is smuggled to Afghanistan, which ultimately leads to acute foodgrain scarcity within Pakistan. The current economic crisis looming world-wide has especially impacted the poor countries, he added.

He said there is vast scope for US private sector investors in every sphere of life, particularly in the agro power and IT sectors, adding that the US Chamber of Commerce (USCC) can play a pivotal role in promoting bilateral trade relations.

"Pakistan is an emerging market rich in opportunities for American investment, while the US is already an important trading partner" he said. Malik urged the need to restore relations to the pre-9/11 level, adding that good relations between the US and Pakistan, and the Muslim ummah will help restore confidence and attain world peace. "With South Asia becoming the hub of international economic activity, restoration of peace in the region is all the more necessary," he observed.


[B][CENTER]Copyright Associated Press of Pakistan, 2009[/CENTER][/B]



[B][CENTER][SIZE="4"]Most of industries in Site stopped working due to low gas pressure [/SIZE][/CENTER]
RECORDER REPORT

KARACHI (February 12 2009)[/B]

Most industries in the Sindh Industrial Trading Estate (Site), Karachi, largest industrial area in Pakistan, have come to a grinding halt due to low pressure of gas. Engr M.A.Jabbar, Chairman, Site Association of Industry (SAI) has expressed grave concern over this development which would result in production and exports losses running into millions of rupees.

He told Business Recorder: "It is regrettable that despite hectic calls, none of the officials are responding to explain the situation. The industry is at a standstill but I cannot be connected to the SSGC Managing Director as his secretariat's usual reply is that he is busy in a meeting."

In a letter sent to Umair Khan, Managing Director, Sui Southern Gas Co Ltd (SSGC) on February 11, his attention has been drawn to the prevailing situation of depression and fluctuation of gas pressure supply in whole Site industrial estate for the last few days. "Site is the biggest industrial area of Pakistan providing sizeable contribution to GDP and exports and as such it is the biggest purchaser of utilities, including gas, from your esteemed company," he said.

The SAI Chairman expressed surprise that the situation that affected industrial output has remained non-notified to the Association. "In the industrial area we are confronted with daily explanations sought by our members as to what is happening in SSGC, vis-à-vis low gas pressure supply. De-stability of your system should have been brought to your notice prior or immediately upon development of the adverse situation for member industries to adjust to its economics of working in the absence of proper gas supply," he said.

Textile processing units which are export oriented, committed to meeting export targets are suffering badly, he said, adding that some of SAI's valued members, consuming a considerable quantity of gas have complained of losses that can not be retrieved due to interruption of process.

There was need for developing better relationship and apprising "us as to what was going on with gas load management. How many more days it will take to restore the gas supply to normal contracted values and how do you defend the company as having not put the industry to notice prior to development of present situation."

Copy of the letter has also been sent to Secretary, Ministry of Petroleum & Natural Resources, Islamabad, and Chairman of Oil and Gas Regulatory Authority, (Ogra), Islamabad.

Jabbar said that the industry is cheated on recurring basis by SSGC through overcharged bills. In major industries the metering is based on no pressure correction recording and as such the low pressure registers over-billing. "We have repeatedly drawn SSGC's attention to refunding the amount charged to customers on account of low gas pressure supply. They keep silent on this issue because the 17 percent return on the assets give them all the luxury of enjoying the price and perks of theirs, which do not change or are reduced even if the industry is closed or is subject to heavy losses on account of low gas pressure supply," he said.

[B][CENTER]
Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]PEW stresses need for plan to control inflation [/SIZE][/CENTER]

RECORDER REPORT

ISLAMABAD (February 12 2009)[/B]

The Pakistan Economy Watch (PEW) has stressed the need of a systematic plan of action to bring inflation under control as it is threatening some most critical sectors of the economy, said Dr Murtaza Mughal, President of PEW, here on Wednesday.

Talking to a delegation of industrialists, he said that the State Bank of Pakistan seems very concerned about inflation, as everything has become more "valuable", except rupee, and it seems that efforts to bring down inflation are increasing unemployment as industrial, manufacturing, exports and other sectors are making downsizing.

"The survival of manufacturers, exporters and millions of employees is at stake due to cost of credit," he said, adding that industrial units are closing down in large numbers, which is sending wrong signals.

He said that many industrial units are not viable anymore, but the owners are running them to remain in business, keep presence in international market or preserve family honour. "There must be some missing links in the monetary policy; everything cannot be compromised just because some policymakers feel strongly about progressive price increase", he added.

"Suppressing inflation is not the only obligation of the regulators", he said. "Who will frame policies to boost or at least maintain domestic production which is sliding at a fast pace threatening whole system?" Dr Mughal asked. He said: "We have developed the habit of obeying every demand of the international lenders, except for taxing the sacred cows," he said, adding that the tendency was an obstacle in achieving the tax-to-GDP ratio.

He stressed the need for concrete plans to revive the ailing economy, saying that one of the highest interest rates, widening trust deficit and uncertainty touching skies, "we should have a strategy to bail out the country". Inflation, he said, "is not the only threat to economy; we should also take sliding savings and revenue collections into account. Consumer finance conditions or banks needs to be made stringent to block unplanned expansion and avoid any crisis".


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]Japan pledges $27 million aid to overcome economic woes [/SIZE][/CENTER]
RECORDER REPORT
ISLAMABAD (February 14 2009)[/B]

The government of Japan on Friday pledged grant of around 27 million dollars (Japanese yen 2.5 billion) to assist Pakistan through non-project grant aid (NPGA). Japanese Ambassador Chihiro Atsumi on behalf of the government of Japan and Economic Affairs Division Secretary Farrakh Qayyum on behalf of the Islamic Republic of Pakistan signed the official exchange of notes (EoN).

The grant aid aims at support and contribution to the promotion of the economic structural adjustment efforts by the government of Pakistan as well as mitigation of Pakistan's economic difficulties. The grant will be used for the purchase of products from the eligible source countries to be mutually agreed upon between the authorities of the two governments and services incidental to such products.

Pakistan and Japan will consult each other about the detail of the utilisation of the funds. The grant will be used to purchase commodities and machineries for contributing to economic and social activities such as oil, medicine, fertiliser and tractors, which are listed in the signed agreed minutes.

The Pakistan government will then deposit all the proceeds from sales and lease of purchased commodities and machineries in Pakistani currency called "Counter Value Fund". The money in the Counter Value Fund is expected to be utilised from economic and social development in the border region of Pakistan. The Counter Value Fund has already accumulated about Rs 2.8 billion in the accounts of National Bank of Pakistan.

NPGA is an important assistance that can be delivered quickly and is representing the long-term commitment of the Japanese government for the development of Pakistan as well as the stability of the region. Economic Affairs Division (EAD) Secretary Farrakh Qayyum said that Pakistan and Japan had long history of co-operation and Japan had supported Pakistan in different sectors, including social sector, education and health to improve the living standards of the people.

He said that the grant extended by Japan would help improve the social sector and overcome the energy crisis in Pakistan. He said that it would also improve the living situation of the people and reduce the poverty in the country. He thanked the Japanese government for extending the grant to Pakistan.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]Economic indicators showing positive trend: Prime Minister [/SIZE][/CENTER]

RECORDER REPORT
ISLAMABAD (February 14 2009)[/B]

Prime Minister Yousuf Raza Gilani has said that economic indicators are showing positive trend, and pledge to provide relief to the masses. He was talking to newsmen after taking a briefing from the Planning Commission (PC) about its strategy towards overall development in the country. He said that the financial meltdown had hit the entire globe and not only Pakistan.

About reduction in petroleum products prices, he said that the government for the first time in Pakistan's history had reduced the prices. About Swat situation he said that military action alone was not the solution to the problem. Pakistan has met International Monetary Fund (IMF) targets, he added. Meanwhile, a statement said that the Prime Minister underlined the need for all-out efforts to ensure merit and transparency in every area of national development.

He said that no country could make progress without good governance as this is the key to success and without observing these norms it is not possible to achieve the desired results. He said the people have given the party the mandate for change and there is huge responsibility lying on it to come up to their expectations.

The Prime Minister said this while chairing a meeting to review the performance of the Planning Commission and progress of various projects at the planning commission. The Prime Minister directed the Planning Commission to incorporate nine-point economic agenda in the planning fold which had already been approved by the Cabinet taking all the stakeholders on board for ensuring better co-ordination and implementation.

He said that he would hold a quarterly meeting to review the status of the projects. He also directed that all future planning should focus on areas which could bring about positive change in the lives of the people through socio-economic development. The Prime Minister also directed the Planning Commission to adopt proactive approach while envisaging various projects for securing more FDIs for infrastructure development with a view to alleviating poverty from the country.

He further directed for close co-ordination with all ministries while monitoring of the GOP projects and underscored the need to avoid duplication and overlapping of work as it would not only prove counter-productive but would also cause waste of public money.

He directed the Planning Commission to induct a woman as member in the task force to ensure representation of this important segment comprising over 50 percent of the population. The Prime Minister said that foremost priority areas before the government are to address law and order situation and the economic crisis as both are interrelated.

He said that more funding was being earmarked for infrastructural development and poverty alleviation in the country. He also asked the Planning Commission that it should formulate policies which have the capacity to absorb both internal and external shocks at the time of crisis. He said despite global economic recession, Pakistan's economy has now started showing positive results. He said that not only the inflation has reduced but other economic indicators were also showing improvement. He said that this became possible only due to prudent economic policies introduced by the present government.

Adviser to PM on Finance Shaukat Tareen told the media that the government had taken some tough decisions for betterment of the economic situation. These measures would take some time to bring about improvement in the economy, he added.

Deputy Chairman of Planning Commission Assef Ahmed Ali later told reporters that the Prime Minister was briefed about the Rs 600 million National Human Resource Development program aiming at training around 0.25 million highly skilled technicians annually. He replied in the negative about any cut in the Public Sector Development Program and said that projects worth Rs 100 billion would be thrown forward under the rationalisation program.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]


[B][CENTER][SIZE="4"]Health ministry allows increase in drug prices [/SIZE][/CENTER]

SEHRISH WASIF
ISLAMABAD (February 14 2009)[/B]

The Ministry of Health has allowed increase in the prices of some drugs from 15 to 45 percent adding to the miseries of the poor people who are already depressed with high food inflation. Talking to Business Recorder, the officials of the Ministry of Health on Friday said that the increase in the cost of the manufacturing of drugs has pushed the prices of medicines.

"The increase came into affect after persistence appeal by some of the pharmaceutical companies as they warned of a severe shortage of medicines including life saving drugs," officials added. The manufacturers were finding it difficult to bear the massive increase in raw and packaging material rates, majority of which was imported, therefore they demanded of the government to take this initiative. The survey conducted by the Business Recorder reveals that there has been a substantial increase in the prices of various medicines.

It includes, Augmentin 625 mg (06 tablets), price has increased from Rs 99 to Rs 120, Evion Capsules (10), price increased from Rs 26 to Rs 44, Xavor (10 tablets) for the cure of blood pressure, prices has increased from Rs 120 to Rs 140, Risek (14 tablets) for ulcer patients, price has increased from Rs 140 to Rs 180, Phenergan anti-allergy syrup, price has increased from Rs 16 to Rs 27, Calpol syrup, Rs 19 to Rs 25, Nivaquine syrup, price has increased from Rs 14 to Rs 20, CAC (10 tablets), Rs 48 to Rs 55, Folic acid (100 tablets), Rs 12 to Rs 20 and Xynosine (nasal drops), Rs 18 to Rs 23, etc.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

[B]
[CENTER][SIZE="4"]Railways plan to launch 13 new cargo trains [/SIZE][/CENTER]

GHULAM ABBAS
KARACHI (February 14 2009)[/B]

Pakistan Railways (PR) plans to launch 13 new cargo trains soon for upcountry to improve its financial condition. At present, there were only three cargo trains running between Karachi and Peshawar with a recent addition of one more train, Peer Muhammad Khaskhaili, Divisional Superintendent (DS) PR Karachi told Business Recorder on Friday.

"As PR track has the capacity to accommodate 13 more trains for upcountry and this is our target to start the service soon to boost the income. This is the only way to minimise the economic crisis of the railways," he said.

He said that all cargo trains, to be added to the already existing cargo service, would be made locally through repairing the old engines and bogies, and there was no plan to import spare parts. In reply to a query, Khaskhaili said that private firms were given only some bogies in different trains and for this service these companies were paying railways handsome.

According to sources Pakistan Railways (PR) has for the first time earned record additional revenue of Rs 3.402 billion during the current financial year - July 1, 2008 to January 31, 2009. The railways had earned a revenue of Rs 10.4 billion during this period last year and it rose to Rs 13.805 billion during the period under review.

They said the increased revenue was achieved due to its commitment to the clients for safe delivery and control on ticket less travelling. On the freight side, the railways loaded 6000 additional wagons as compared to last year's number. Last year railways had loaded 176,989 wagons and this number stood at 182,839 wagons in the current financial year.

However, some other sources said that railways had never taken its cargo service sector serious. They said only three stations currently covered by PR like Faisalabad, Peshawar, and Multan were not enough to improve the cargo service as most of the small stations were being covered by private companies.

Chenab Express and Super Parcel Express (SPE), the mail trains of 10 bogies, were being used for forwarding goods by private companies, they added. Despite depriving itself from freight fares, as the sources said, PR had also stopped the "To-pay" (the fare to be paid by the parcel receiver) facility in which ultimately caused economic loss to the railways.

There were also many other issues like unwillingness by railway staff to improve their customer service. "Though the government had promised to improve the cargo sector of PR, but so far nothing tangible the crisis has been done," they added. In Pakistan 70 percent earnings of PR come from passenger and only 30 percent from the mail or cargo service.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

Exports grow by 35.7 per cent
 

[B][SIZE="3"]Exports grow by 35.7 per cent[/SIZE][/B]
submitted 1 day 22 hours ago
[SIZE="2"][COLOR="Blue"]ISLAMABAD (APP) - Exports during July-January, 2008-2009 totalled Rs.837,430 million as against Rs.617,129 million during the corresponding period of last year, showing an increase of 35.70 percent.
Exports from Pakistan during January, 2009 amounted to Rs.107,609 million as against Rs.103,468 million in December, 2008 and Rs.91,320 million during January, 2008 showing an increase of 4 percent over December, 2008 and of 17.84 percent over January, 2008, according to Federal Bureau of Statistics data..
Main commodities of exports during January, 2009 were Bedwear (Rs.11,104 million), Knitwear (Rs.11,039 million), Cotton cloth (Rs.9,812 million), Readymade garments (Rs.8,341 million), Cotton yarn (Rs.6,131 million), Rice others (Rs.5,701 million), Rice basmati (Rs.4,183 million), Towels (Rs.3,997 million), Made up articles (excl towels, bedwear) (Rs.3,573 million) and Cement (Rs.3,080 million).
Imports during July-January, 2008-2009 totalled Rs.1,665,093 million as against Rs.1,249,566 million during the corresponding period of last year showing an increase of 33.25 percent.
Imports into Pakistan during January, 2009 amounted to Rs.199,965 million as against Rs.167,864 million in December, 2008 and Rs.220,097 million during January, 2008 showing an increase of 19.12 percent over December, 2008 but a decrease of 9.15 percent over January, 2008.
Main commodities of imports during January, 2009 were Petroleum products (Rs.23,476 million), Petroleum crude (Rs.20,474 million), Power generating machinery (Rs.10,931 million), Iron & steel (Rs.10,106 million), Plastic materials (Rs.7,425 million), Palm oil (Rs.7,314 million), Electrical machinery and apparatus (Rs.6,239 million), Other apparatus (Telecom) Rs.5,193 million),Iron and Steel Scrap ( Rs.4,864 million) and Aircrafts, ships & boats (Rs.4,481 million).[/COLOR][/SIZE]
[B]Sources...... THE NATION[/B]

'Day of Reckoning'
 

[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]
By Michael D. Shear and Anne E. Kornblut
Washington Post
Wednesday, February 25, 2009

President Obama offered a grim portrait of America's plight in an address to a joint session of Congress last night, but he promised to lead an economic renewal that would lift the country out of its current crisis without bankrupting its future.
Striking an optimistic tone that has been absent from his speeches in recent weeks, the president said his stimulus plan, bank bailout proposal, housing programs and health-care overhaul would work in concert to turn around the nation's struggling economy. And while he bluntly described a country beset by historic economic challenges and continued threats abroad, he said the solution lies in directly confronting -- not ignoring -- those problems.

"The weight of this crisis will not determine the destiny of this nation," he said. "The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth."

In an address that largely shunned foreign policy to focus on the economy, Obama added: "Now is the time to jump-start job creation, restart lending, and invest in areas like energy, health care and education that will grow our economy, even as we make hard choices to bring our deficit down."

The 52-minute speech was greeted with sustained applause in the House chamber, which he had helped populate with more members of his party. Republican and Democratic lawmakers alike rose repeatedly to offer their approval of the president's rhetoric and his promise of recovery.

Obama received a standing ovation when he vowed that corporate chief executives would no longer travel on private jets at the same time they laid off thousands of workers. "Those days are over," he said. Lawmakers leapt to their feet again when he declared that "health-care reform cannot wait, it must not wait, and it will not wait another year."


While he largely avoided partisan rhetoric and did not directly point the finger of blame at his predecessor, George W. Bush, Obama did describe an "era" of greed and short-term profit that he said the nation is now leaving behind, and he stressed that he had not created but rather "inherited" the $1 trillion deficit, along with what he called "a financial crisis and a costly recession."

The "day of reckoning has arrived," he declared, warning members of both parties in Congress that they will be forced to sacrifice "worthy priorities" as the crisis continues.

But he made it clear that he is not prepared to retreat from his own ambitious agenda. The president called on Congress to pass a market-based cap on carbon pollution. He vowed a renewed effort to provide health care to all Americans. And he called on Americans to attend at least one year of college or vocational training, pledging that by 2020, the country will again lead the world in the proportion of college graduates.

Obama did seek to temper expectations in his address, acknowledging that he cannot "solve every problem or address every issue." But he promised to deliver a budget tomorrow that will serve as a new "vision for America -- as a blueprint for our future."

He avoided in-depth discussion of his Iraq policy, saying only that in the coming days he will "announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war." That announcement could come as early as Friday, during a trip to North Carolina. Advisers said he is considering a plan to withdraw all U.S. combat troops from Iraq as soon as August 2010, three months later than promised during the campaign.

After weeks of persistent questions about whether he had grown too downcast and pessimistic in describing the economic crisis to the American people, White House officials said Obama was seeking to strike an appropriate balance between hope -- the mantra of his campaign -- and realism in an era of serious problems. He sought to juxtapose those ideas repeatedly, saying at one point: "While our economy may be weakened and our confidence shaken, though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before."

Like his predecessors, Obama cited the stories of guests invited to the speech by the White House to reflect "the spirit of the people who sent us here." One of those, a South Carolina high school student named Ty'Sheoma Bethea, sought help for her crumbling school by writing a letter to members of Congress, Obama said. "We are not quitters," he said, quoting her letter. "That's what she said. We are not quitters."

Obama's speech was his first major address since he was inaugurated five weeks ago, as well as his first opportunity to offer a coherent narrative for the early weeks of his presidency, during which the economy has shown no signs of stabilizing.

Last week, former president Bill Clinton chided Obama for not offering the kind of uplifting rhetoric that was a staple of his campaign.

"I like trying to educate the American people about the dimensions and scope of this economic crisis," Clinton said on ABC's "Good Morning America." "I just would like him to end by saying that he is hopeful and completely convinced we're going to come through this."

That has been difficult amid signs that the economic meltdown that began in late September has only deepened and broadened.

The nation's biggest banks are on the verge of collapsing without government investment that could lead to a nationalization of the industry. Foreclosures continue to chase Americans from their homes in record numbers, and the auto industry is failing despite the infusion of billions from the federal Treasury.

Under pressure to explain the necessity of a bank bailout program that many see as a reward for Wall Street, Obama made a detailed case for continuing to pour government money into the financial sector.


"There will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system," he said.

The president sought to calm jittery investors by assuring that bank deposits are safe. But, he said, the assistance to the banking industry is not an abstract idea with distant consequences, but rather an immediate concern for average citizens.

"If we do not restart lending in this country, our recovery will be choked off before it even begins," he said. "You see, the flow of credit is the lifeblood of our economy. . . . When there is no lending, families can't afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further."

Advisers have warned that Obama will make "hard choices" in his first budget blueprint, which he is set to deliver tomorrow. The president has pledged to cut the nation's deficit in half by the end of 2012, allowing tax cuts for the wealthy to expire and reducing war spending as the U.S. military draws down troops from Iraq over the next year and a half.

That puts him on a collision course with many Republican lawmakers, who have already begun to question the wisdom of Obama's proposed spending cuts and tax increases.

Even before Obama began speaking, the GOP made clear its unwillingness to bend to the president's will. In excerpts from his official Republican response, Louisiana Gov. Bobby Jindal derided Obama's legislative agenda as full of big-government ideas that will not succeed in repairing the nation's economy.

"What it will do is grow the government, increase our taxes down the line and saddle future generations with debt," said Jindal, who is running for reelection and is considered a potential contender for the presidency in 2012. "Who among us would ask our children for a loan, so we could spend money we do not have, on things we do not need? That is precisely what the Democrats in Congress just did. It's irresponsible."[/COLOR][/SIZE][/FONT]

[CENTER][B][CENTER][SIZE="4"]Six-month consolidated budget deficit rises to Rs 250.5 billion [/SIZE][/CENTER][/B][/CENTER]
[B]RECORDER REPORT

ISLAMABAD (March 03 2009)[/B]

The consolidated budget deficit of the federal and four provincial governments has accumulated to Rs 250.5 billion during first half (July-December) of 2008-09 fiscal year. According to a Fiscal Operations Report of Finance Ministry issued here on Monday?, total revenues of the government stood at Rs 834.47 billion and expenditures at Rs 1.085 trillion during first half of 2008-09.

Breakup of current expenditure shows that Defence expenditures stood at Rs 147.78 billion during the period under review. The federal government transferred Rs 250.58 billion to Punjab, Sindh, NWFP and Balochistan as provincial share in federal revenues under interim National Finance Commission (NFC) Award, during this period.

The summary of consolidated federal and provincial budgetary operations showed out of total revenues of federal and provincial tax collection stood at Rs 577.99 billion. In non-tax revenues Rs 69.128 billion were collected from petroleum and gas sector that include Rs 28.839 billion as petroleum development surcharge and Rs 8.510 from gas development surcharge, discount rate on crude oil Rs 5.967 billion and royalty on oil and gas stood at Rs 25.812 billion. Total non-tax revenues stood at Rs 256.48 billion during the July-December period of current fiscal year.

The details of the expenditures of the federal government during July-December period revealed that the government spent Rs 1.085 trillion, which included Rs 916.7 billion as non-development expenditures. The details of the current expenditures (Non-Development) in first half the government paid Rs 299.855 billion as interest on local and foreign loans, Rs 265.934 billion were spent on servicing of domestic debt and Rs 33.921 billion were spent on servicing of foreign debt. Total defence expenditures were Rs 147.7 billion, the development expenditure and net lending during the first half stood at Rs 132.979 billion.

The budget deficit stood at Rs 250.56 billion that was financed through Rs 36.991 billion from external resources and Rs 213.577 billion from domestic resources. Total non-bank borrowing amounted to Rs 31.309 billion, bank borrowing at Rs 180.97 billion and privatisation proceeds were Rs 1.290 billion.

Breakup showed that provincial revenues of Punjab amounted to Rs 159.769 billion against expenditures of Rs 148.9 billion during the first half of current fiscal leaving a surplus of Rs 10.844 billion. Punjab received Rs 123.962 billion as revenue share from federal taxes as NFC Award share. Punjab received grants worth Rs 2.156 billion and loan of Rs 3.063 billion from federal government. Development expenditures of the province stood at Rs 28.676 billion and non-development expenditures were 120.249 billion during this period.

Total revenues of Sindh Province stood at Rs 89.916 billion and total expenditures of the province remained at Rs 94.033 billion, resulting in budget deficit of Rs 4.117 billion. Sindh received Rs 76.722 billion as NFC award share of the federal taxes from the federal government. Non-development expenditures of the provincial government stood at Rs 83.079 billion and development spending remained at Rs 10.954 billion in said period.

Revenues of the NWFP amounted to Rs 44.035 billion and total expenditures of the province stood at Rs 29.090 billion during the first half leaving a budget surplus of Rs 14.945 billion. The NWFP government received Rs 31.364 billion as NFC Award shares from the federal government during the said period. Development expenditures were Rs 5.635 billion and non-development expenditures were Rs 23.455 billion.

Revenues of Balochistan stood at Rs 32.728 billion, whereas expenditures remained at Rs 22.319 billion, leaving a budget surplus of Rs 10.40 billion. The provincial government received a sum of Rs 18.532 billion as NFC Award share from the federal government during the period under review. Province received loans of Rs 1.078 billion, current grants at Rs 6.281 billion and Rs 5.547 billion as development grants.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[CENTER][B][SIZE="4"]Ministries divided over trade with India through Wagha [/SIZE][/CENTER]

MUSHTAQ GHUMMAN

ISLAMABAD (March 03 2009)[/B]

The ministries are divided over opening of trade links with India through Wagha-Attari border, previously agreed between President Asif Zardari and Indian Prime Minister Manmohan Singh in New York in September last year, sources in Finance Ministry told Business Recorder here on Monday.

The Economic Co-ordination Committee (ECC) of the Cabinet, which is scheduled to meet on Tuesday, will discuss the pros and cons of a joint proposal of Commerce and Foreign Affairs Ministries. Interior Ministry is on top of the ministries which are opposing initiation of trade with New Delhi through land route, especially Wagha-Attari crossing points, saying that "under the prevailing circumstances, status quo should be maintained with India". Wagha-Attari border was opened for imports from India for the first time on May 4, 2005 with the approval of the Prime Minister for import of potatoes, tomatoes, garlic, halal meat and live bovine animals.

Subsequently, sugar, cement, cotton, maize, stainless steel, paddy harvesters and threshers and cotton yarn were also added to the list of items allowed to be imported through this route, with the approval of the ECC and, in certain cases, by the Federal Cabinet.

All other items currently importable from India can only be imported by sea, or through Wagha by rail. Presently, however, there is no restriction on exports to India through Wagha, either by rail or by road.

In order to facilitate trade across the Wagha-Attari road crossing, trucks of both countries are allowed to move within the respective territories of Pakistan and India for loading/unloading of cargo. This arrangement is operational since October 1, 2007.

As ascertained from the customs authorities of Pakistan at Wagha, statistics of trade with India via land since October, 2007 show that import from India amounted to Rs 3516.598 million, exports to India nil, and Afghan exports to India in transit from Pakistan amounted to Rs 2367.093 million.

These statistics show that although there is no restriction on exports to India, there has been no export through this route even after facilitation of movement of trucks across the border.

A major reason is lack of infrastructure on Indian side of the border. In the composite dialogue, India has shared a proposal with Pakistan about the future projects to be developed to operationalise this route for bilateral trade. The project is likely to be completed in the short term, sources said.

Simultaneously, on Pakistan side of the border, there is also a need to develop a road/highway network bypassing the city of Lahore to cater to substantial influx of imports from India by road.

Accordingly, the Commerce Ministry has proposed that (a) the decision communicated by Ministry of Foreign Affairs should be implemented in a phased manner, commensurate with the parallel development of infrastructure on either side of the border to cater for potential spurt in the bilateral trade, and (b) India should be conveyed during the next meeting of the composite dialogue under economic and commercial co-operation likely to be held at Islamabad, the concurrence in principle of Pakistan to open Wagha-Attari for permissible items of trade to be fully operationalised after necessary infrastructure is developed on both sides of the border.

Meanwhile, Commerce Ministry has also sought authorisation to allow import of goods from India by road on the request of stakeholders in Pakistan, sources said. "The Federal Board of Revenue (FBR) has also supported the proposal fully whereas Industries Ministry and Communication Ministry have agreed to support the proposal partially," sources added.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]



[CENTER][B][SIZE="4"]Strategy evolved to enhance Pak-Indonesia trade [/SIZE][/CENTER]
LAHORE (March 03 2009)[/B]

Business leaders of Pakistan and Indonesia on Monday agreed to evolve a strategy to enhance bilateral trade and to bridge the trade gap between the two countries.

According to a message received here on Monday from Jakarta where a 10-member high level Pak traders delegation is currently attending fifth three-day World Islamic Economic Forum (WIEF), this was resolved during a meeting of Pakistan business group, led by Tariq Sayeed and Iftikhar Ali Malik, former Presidents of FPCCI and counterparts of Indonesian Chamber of Commerce and Industry (ICCI).

They were of the opinion that Indonesia and Pakistan being the World's sixth and seventh largest nations formed a combined market of 325 million people; however the volume of trade between these countries was negligibly less than 1% of their total with rest of the World.

Since both the markets provide a sizeable import market of $125 billion, there was an ample opportunity to make niche in each other's markets, said Tariq Sayeed and stressed for formulation a strategy that trade volume between the two countries is augmented to the level of existing potential and Pakistani products are marketed in a prospective manner.

Iftikhar Ali Malik, Deputy leader of Pak delegation said that the present volume of trade between Indonesia and Pakistan was estimated $1.24 billion in the year 2007-08, showing a huge trade deficit of $1.17 billion to Pakistan, which was due mainly to import of vegetable and animal fats, petroleum products, man-made fibre, paper products and organic Chemicals from Indonesia.

Tariq Sayeed urged the ICCI to encourage imports from Pakistan since many of Pakistani products had a great potential for Indonesian Market and in the absence of appropriate marketing such products had not been able to capture the market.

The exports from Pakistan were disappointingly estimated at only $61 million in the year 2007-08. Fachry Thaib, chairman organising committee of WIEF for Middle East and Asia,Herbursy,Sachman H. Kademin Secretary General ICCI and many other businessmen from Indonesia were present in the meeting.

The other members of Pak delegation who attended the meeting comprised Zubiar Tufial, former VP, FPCCI, Muhammad Siddique Sheikh,Azhar majeed Sheikh, Mian Mehmood Ahmed,Jamil Naz,Muhammad Aamir Sorathia,Sheharyar Ali Malik,Salman Tufail and Kashif Younus Mehar.


[B][CENTER]Copyright Associated Press of Pakistan, 2009[/CENTER][/B]


[CENTER][B]'[SIZE="4"]Political turmoil to exacerbate economy' [/SIZE][/CENTER]

KARACHI (March 03 2009)[/B]
Political turmoil in country after a court banned the most popular opposition leader running for public office could make the stagnant economy even more dependent on US aid and IMF bailouts. Thousands of supporters of Nawaz Sharif have rallied across the country, with mobs setting cars ablaze and clashing with police in the biggest protests against the rule of President Asif Ali Zardari.

Analysts say Pakistan can ill afford a political crisis on top of extremist attacks that have killed more than 1,600 people in under two years, financial crisis and international pressure to prosecute those behind the Mumbai attacks. As soon as the Supreme Court disqualified Sharif last Wednesday, panic selling wiped five percent off the Karachi Stock Exchange in the worst single-day performance in 32 months.

"The current political crisis will force us to depend even more on the International Monetary Fund (IMF) and accept all its conditions," economist Rauf Nizamani told AFP. Buffeted by nation-wide bombings, insurgency and global financial turmoil, country was hit last year by 25 percent inflation and saw 10 billion dollars wiped off its international reserves from October 2007 to October 2008.

The country's economic managers had no choice but approach the IMF to stave off a looming balance-of-payments crisis that could have seen the Muslim country of 160 million default on its foreign debts. The IMF approved a stand-by loan of 7.6 billion dollars for cash-starved Pakistan and released its first tranche of 3.1 billion dollars in November.

This year's fiscal deficit target is 5.5 percent of gross domestic product (GDP), compared to last year's 7.4 percent. country's current account deficit was 8.4 percent of GDP last year, which the authorities are trying to get down to 5.5 percent under IMF targets. The authorities also aim to get inflation down to 20 percent by the end of this fiscal year in July.

In its first quarterly review, the IMF praised Pakistan and noted initial success in stabilising the economy, but it wants a reduction in the deficit and huge borrowings from the central bank. "The present situation will lead to further political instability, weaken the government's position and increase its dependence on the United States and the IMF," said Yusuf Nazar, an independent economist.

US Senator John Kerry has called on the United States to triple non-military aid to Pakistan to 7.5 billion dollars over five years, warning that "time is running out" to help the civilian government survive. The Atlantic Council think tank has estimated that Zardari's government has six to 12 months to enact successful security and economic policies or face the prospect of collapse.

[B]
Copyright Agence France-Presse, 2009[/B]

U.S. Unemployment Rate Jumps to 8.1 Percent
 

[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]By Debbi Wilgoren
Washington Post Staff Writer
Friday, March 6, 2009; 11:39 AM

The nation's unemployment rate climbed above 8 percent last month and the economy shed 651,000 jobs, new data shows, further evidence of the deepening recession that has devastated the stock market and home prices and triggered the largest government recovery effort since the Great Depression.

The Bureau of Labor Statistics said the jobless rate rose from 7.6 percent in January to 8.1 percent in February, the highest rate in more than 25 years. An estimated 12.5 million Americans were unemployed in February, the data show, an increase of 851,000 since January. More than 4.4 million people have lost their jobs since the recession began in December 2007, U.S. Labor Secretary Hilda Solis said.

The government revised sharply upward the number of jobs the economy lost in December and January, showing a staggering 1.99 million jobs disappearing in the past three months.

More jobs were lost in each of those months than in any single month since October 1949, when the country was just pulling out of a painful recession (economists say direct comparisons to that era are difficult, however, because of changes in the labor force).

December had the most job losses, according to the revised figures, with 681,000 -- significantly more than the previous estimate of 524,000. The number of jobs lost in January rose to 655,000, up from a prior estimate of 598,000. An additional 651,000 jobs disappeared last month, the government said, illustrating the profound challenges of launching an economic recovery as employers continue to slash payrolls in a desperate effort to control costs.

The unemployment rate has shot up 3.2 percent since the recession began and is higher now than at any time since December 1983. Nearly 3 million Americans have been unemployed for six months or more.

The Obama administration has moved to stifle the job losses, primarily by approving an ambitious fiscal stimulus plan designed to plow money back into the economy. But the allocation of the money is just beginning, and the full effect of the spending probably will not be seen for some time.

Speaking to a group of newly minted police officers in Columbus, Ohio this morning, President Obama said the expensive and broadly drawn plan to invest in government and private sector jobs and infrastructure is a necessary response to a deep and dire recession.

"So many of you have been watching jobs disappear since even before this recession began," Obama said. "That is not a future I accept for the United States of America . . .

"Throughout our history we have met every great challenge through bold action and big ideas. That's what has fueled a shared and lasting prosperity . . . We have a responsibility to ourselves and to our children to do it again."

In an e-mailed statement, Solis said the government would "continue to do whatever is necessary to break the destructive cycle of job loss in this country and put Americans back to work."

The U.S. stock market opened higher this morning, then fell slightly, after sustaining sharp losses yesterday., Asian markets fell overnight.

The February data showed profound losses in the professional and business services sector, with 180,000 jobs gone. Some 168,000 jobs were lost in the manufacturing industry, with most of the decline in the durable goods sector. There were 104,000 construction jobs lost as projects stalled due to the collapse of the real estate industry and the ongoing credit crisis. The financial sector shed 44,000 jobs, retail lost 40,000 jobs and the leisure and hospitality industry reported 33,000 fewer jobs. Job growth continued, however, in the health-care sector.

Analysts say the pace of job cuts is likely to remain brisk for at least a few more months, because the demand for goods and services seems likely to remain very low as more consumers find themselves out of work. According to newly released data, the nation's productivity, a measure of goods and services produced per hour, fell at the end of last year. That suggests that demand for goods has dropped even faster than employers have been shedding jobs. Those who have lost their jobs are not eager to open their wallets, analysts say, while many of those who remain employed are cutting back because of fears about job security.

The new jobless numbers show that blacks and Hispanics are unemployed at higher rates than the national average. About 13.4 percent of blacks and 10.9 percent of Hispanics were looking for work in February, compared with 12.6 percent of blacks and 9.7 percent of Hispanics in January. The unemployment rate for whites rose to 7.3 percent, up from 6.9 percent the previous month. An estimated 6.9 percent of Asians were unemployed in February, up from 6.2 percent in January.

The number of people working part time because they cannot find full-time employment rose by 767,000 in February to 8.6 million, the government said.

The unemployment rate does not reflect people who say they would like to work full-time, but can only find part-time jobs, or who would like to be working but have given up finding employment because of the depressed market. When those categories are added to the number of unemployed -- technically those people who are actively seeking but unable to find jobs -- the government's "labor underutilization" rate measures 14.8 percent, up from 13.9 percent last month and 9.5 percent a year ago.

The average length of the workweek remained at a relatively low 33.3 hours for the third consecutive month. [/COLOR][/SIZE][/FONT]

[B][SIZE="4"][CENTER]Pakistans foreign exchange reserves fall to $10.05 billion [/CENTER][/SIZE]

KARACHI
(March 13 2009)[/B]

Pakistans foreign exchange reserves fell by $90 million to $10.05 billion in the week that ended on March 7, the central bank said on Thursday. The State Bank of Pakistans reserves dropped to $6.61 billion from $6.69 billion a week earlier, while reserves held by commercial banks slipped to $3.44 billion from $3.45 billion, the bank said.

Pakistans foreign reserves hit a record high of $16.5 billion in October 2007 but fell to $6.6 billion in November, largely because of a soaring import bill. Pakistan signed a $7.6 billion loan agreement with the International Monetary Fund in November to stave off a balance of payments crisis. It received its first tranche of $3.1 billion that month. The next tranche of about $840 million is expected by the end of March.


[B][CENTER]Copyright Reuters, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]
Need stressed for greater attention on scientific research [/SIZE][/CENTER]RECORDER REPORT
ISLAMABAD (March 13 2009)[/B]

Pakistani industry will have to give proper attention to modern and scientific research for making its products compatibles in the international market and earn wider market space round the globe, said Syed Asad Haider Mashhadi, President Rawalpindi Chamber of Commerce and Industry (RCCI) here on Thursday.

Co-ordination between industrial sector and research institutions is imperative to go through to the latest research and adopt the modern methods of production and quality management, Mashhadi said while addressing a seminar at RCCI on the topic of "Value Addition in Industrial Activity through Scientific and Technological Information".

The seminar was jointly organised by RCCI and Pakistan Scientific and Technological Information Center (PASTIC), a subsidiary department of Pakistan Science Foundation. Vice President of the Chamber Imtiaz Chaudhary, former President, S. M. Azim, Director PASTIC Mrs Nageen Ain-ud-Din and Chief Scientific Officer of Pakistan Science Foundation Dr Manzoor Hussain Soomro along with a large number of business community was also present on the occasion.

President RCCI said that the quality of the product has become an important factor of marketing that without it no one even might think to market his product and for acquiring international standard, continuous scientific research is extremely imperative.

"We can grow every kind of fruit and crop by virtue of best climatic conditions in the world. Moreover we have lot of potential in natural as well as human resources but despite these facts Pakistan has been facing the problems of unemployment, poverty and illiteracy. Only due to lack of scientific research, we could get benefit from our capabilities in befitting manner", he added.

He said that scientific research on modern lines should be adopted not only for the development of industry but also betterment of common man. It is the duty of industry to support research institutions as it is the only way to develop a strong base for industry in the country on permanent basis.

Mashhadi was of the view that although whole world is passing through a recession now days but this temporary slump period would be over and soon the business would be boom once again but co-operation of research groups and industry should never be stopped at any stage.

Director Pakistan Scientific and Technological Information Center (PASTIC), Nageen Ain-ud-Din briefed thoroughly about the history and performance of the organisation. She told the audience that on one hand PASTIC is providing technical support to the researchers and students in different fields to carry out their research work and on other many important strategic and defence departments as well as private sector is taking full advantage from the expertise of the centre.

She suggested that industrialists should take initiative to start project relating to research and development in their industry and Pakistan Scientific and Technological Information Center would extend maximum support for improving quality of their product. On the occasion Chief Scientific Officer of Pakistan Science Foundation Dr Manzoor Hussain Soomro said that PSF is working on indigenous technology and it can help the industry to make Pakistan self reliant.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]



[B][CENTER][SIZE="4"]Crackdown to deteriorate economic situation [/SIZE][/CENTER]

RECORDER REPORT
LAHORE (March 13 2009)[/B]


The ongoing crackdown against the political activists and unrest will further deteriorate the economic situation in the country thus the government should immediately stop creating harassment. The Business Action Forum Chairman Muhammad Ali Mian, in a statement, here on Thursday said the ongoing situation is not only sending a very wrong signal abroad.

While it is also discouraging the local businessmen who wanted to see the solution of crisis. He urged the government to restore judiciary to November 2, 2007 position in the larger interests of the country and end the Governors Rule in Punjab.

He said every citizen would have to play his or her due role, and should support real leadership to achieve real political and economic stability. "Our country is standing at crossroad and one road is taking us to disunity, misrule, injustice and economic mismanagement, while other path ensures real democracy, justice, unity and economic prosperity," he said. He said that the business community could feel on this stage that the economic prosperity would remain a dream without the political stability and real democracy.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

[B][SIZE="4"][CENTER]Sindh urged to suspend inspection for labour levies[/CENTER] [/SIZE]

IQBAL MIRZA
KARACHI (March 16 2009)[/B]

Sindh Chief Minister has been requested to suspend inspections for labour levies as the industry, right now, is confronted with a host of problems. Industries are closing down, have become sick and are becoming hostage of cash flows resulting in reported non-servicing of even financial costs accrued on account of mark-up liabilities of the banks towards repayments on short term and long term financing.

Engr. M. A. Jabbar, Chairman, Site Association of Industry (SAI) has made these observations in a letter send to the Chief Minister of Sindh while drawing his attention towards the "crisis ridden industrial economy of Pakistan, which is also having adverse affect on the industries in SAI industrial trading estate."

Earlier during a meeting the Chief Minister was apprised of the multiple problems, which the industry is facing, ie, lack of infra-structure support, inefficient and interrupted supply of power and gas, law and order issues and high mark-ups are eroding the cost competitiveness of the domestic produce.

In the present situation the stringency of inspections on account of confirming the amount of labour levies in Sindh province may be out considered. This out consideration is for the simple reason that when the economy is not growing and industrial segment is growing with negative approach, jobs are lost and on the way to be further lost is a situation in which industry can not sustain the inspections related ascertaining of labour laws, he said.

In the letter it has been pointed out that the objectives are not served through present policy of inspection by labour department. The change in the present policy has been felt by the federal government, which has laid the task of formulating new labour inspection policy through research department of labour ministry.

This research also constitutes tri-partite discussions among stakeholders in which employers, employees and government are participating. The process is continuing to formulate new labour inspection policy to commensurate with the real supply side and meet the demand side of the policy, in conformance with the required improvements in the working environment and the labour-management relationship.

Engr. Jabbatr said that the present labour inspection policy is objective less. The targeted objects of inspections are to guide the industry to adhere to the requirement of safety of the worker according to the type of industry, in addition conduct education to the need for creating productive climate for increasing the production with the same capacity. The present policy is just a settlement of formal and informal cost compliance. The policy does not provide any services of guiding nature, helping composition, making available professionals to hold education as the tool for reducing the present constrained relationship between the labour and management.

Chairman SAI has suggested to the Chief Minister to suspend the inspections for at least one year, which is a turmoil year for the economy and in specific the issues confronting the industry which require it to spend more time in conservation, improving the efficiency and producing price competitive quality goods for home and overseas consumption.

In the end he requested the Chief Minister to order holding in abeyance/suspending the labour inspection till such time the pressure on industry is reduced or modalities of inspections are worked out on the basis of public-private joint inspection.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]
Blockade of highways: export and import activities shrink alarmingly [/SIZE][/CENTER][/B]

[B]MUHAMMAD ALI
KARACHI (March 16 2009)[/B]

The governments blockade of highways to foil lawyers attempt to march on Islamabad and stage sit-in on Constitutional Avenue for reinstatement of deposed judges caused billions of rupee losses to the national exchequer for all exports and imports activities scaled down during the last six days.

Long queues of containers of imported goods are waiting for transportation at Port Qasim and Karachi Port Trust (KPT) for last six days but hauliers are reluctant to transport these because of governments hostile maneuver.

Similarly, a large number of loaded and unloaded trucks, trailers are forcibly being used as road barriers by the law enforcers to block major highways aimed at containing lawyers convoys to reach Islamabad. When contacted President Karachi Goods Carriers Association (KGCA) , Noor Khan Niazi said that some 6000 trucks and trailers, containing goods for domestic consumption, exports, imports and raw material, have forcibly been detained to stymie the lawyers long march.

He said the loaded and unloaded vehicles have mostly been parked at Sukkar, Lodrah, Khanewal, Obaro, Parnawal, Rawaat and Texila. To a question, Niazi said that association has sent a complaint letter to Syed Qaim Ali Shah, chief minister, Sindh and has asked for intervention. But he said the provincial government has so far not responded positively hence transporters are reluctant to take goods to the Punjab.

He urged the government to provide security to the carriers in case of any untoward situation, saying that transporters are still deprived of getting compensation to their losses during December 27, 2008 pandemonium.

He expressed fear of commodity shortage and delay in the export consignments and added that the export shipments could be delayed, if impounded containers were not release. He said the country is passing through severe political and economic crisis, hence the association has called off its strike because it would further deepen the crisis.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]
Rs 20 billion loss estimated due to long march in Multan [/SIZE][/CENTER][/B]

[B]SARMAD MAHMUD
SIALKOT (March 16 2009)[/B]

Business activities have come to a standstill due to the recurrent public meetings, crackdown and lawyers rallies in this export-oriented and nucleus of cottage industry of the country, Multan. President Sialkot Chamber of Commerce and Industry (SCCI) Hassan Ali Bhatti said on Sunday that according to a rough estimate Multan has faced losses amounting to Rs 20 billion so far due to the long march and political tussle.

The exporters community of Sialkot despite various problems was struggling for fetching maximum foreign exchange for the country and we will continue the fight for strengthening the national exchequer, he further said. Sialkot which is known all over the world for exports of sports goods, surgical instruments, leather products, gloves of all sorts, sportswear, badges, musical instruments and martial uniforms and accessories through the city is earning one billion dollars, was suffering adversely due to the current upheaval in the country.

Bhatti added that business community particularly exporters of the area were facing multiple crisis due to the blockage of highways and seizing of containers loaded with exportable consignments which would delay the delivery of consignments at their ultimate destination.

SCCI President further said exporter community was making its hectic efforts for restoring the confidence of their annoyed foreign buyers because during past months exporters were unable to accomplish the foreign orders on time due to the prices of petroleum and load shedding of electricity and gas.

Hassan Bhatti said under the prevailing situation the exporters were paying 10 to 20 percent of the expenditures from its own packet for fulfilment of the international commitments, adding that how long the business community would spend from its pocket for handling foreign orders.

[B][CENTER]
Copyright Business Recorder, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]US, China and Japan pledge support for Friends of Pakistan moot [/SIZE][/CENTER][/B]

[B]WASHINGTON
(March 22 2009)[/B]

The United States, China and Japan have vowed their support for next months Friends of Pakistan meeting in Tokyo, where major economic powers are expected to back the South Asian countrys economic development programmes.

In their separate meetings with Pakistans Ambassador to the United States Husain Haqqani, the chief Chinese and Japanese envoys based in Washington and top US officials expressed their willingness to shore up Pakistans initiatives for its speedy economic progress.

The meeting, taking place on April 17 in Tokyo, would be attended by leaders and representatives from several Asian and Western industrialised and oil-rich Gulf nations. Haqqani held meetings with the US State Department officials, Chinese Ambassador to US Zhou Wenzhong and Japanese Ambassador to US Ichiro Fujisaki to co-ordinate efforts towards a productive outcome of the conference.

In addition, the Pakistani diplomat had meetings with US Special Representative Richard Holbrooke and visiting Japanese Prime Ministers special envoy over the last week. The US diplomats have also been meeting separately with envoys of other countries toward the objective. US Secretary of State Hillary Clinton is expected to represent Washington at the meeting, which is likely to be chaired by President Asif Ali Zardari.

Top Pakistani democratic leaders, President Zardari and Prime Minister Yusaf Raza Gilani believe that international assistance will not only help meet economic development of the people but also serve as a bulwark against violent extremism afflicting its border regions. The economic stability of Pakistan - the frontline partner against violent extremism - is considered key to regional peace and stability.

[B][CENTER]Copyright Associated Press of Pakistan, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]Businessmen urged to explore investment avenues in Egypt [/SIZE][/CENTER]

ISLAMABAD (March 25 2009[/B]

Egyptian envoy to Pakistan Magdy Amer has urged Islamabad-based businessmen to explore avenue of investment in Egypt in the tourism, communications, Information technology, construction, manufacturing and transportation. He stated this during his visit to the offices of Islamabad Chambers of Commerce and Industry (ICCI) on Tuesday.

He said bilateral trade between Pakistan and Egypt in 2007-08 was around 200 million dollar which was much lower while the two countries had vast potential to increase it.

He said Egypts GDP grew at 7.5 percent during 2007-08 which shows its good economic potential. He said tourism, communications, information technology, construction, manufacturing and transportation were the fastest growing sectors of Egyptian economy and urged upon Pakistani entrepreneurs to explore these sectors for enhancing trade and investment relations.

He said corporate and personal tax rates in Egypt were competitive while Egypt was a window for entering European Union, USA, Arab world, Eastern and South African markets as it enjoyed preferential access to these countries.

He said this offers for Pakistani business community are great opportunity to get preferential access to these markets by investing and manufacturing in Egypt. Egyptian Ambassador said a Pak-Egypt Business Council was established in 2006 but its performance was not up to the mark and stressed upon the need of reactivating it. He said lack of information and reluctance on the part of businessmen of two countries were the main reasons of low level trade between the two countries while direct contacts between businessmen were essential to increase it.

He assured the business community of his full support and co-operation in their visa matters for prompt provision of business visas. He informed that Egypt will be hosting the second meeting of the Economic Working Group of the Asia Middle East Dialogue (AMED) from May 9 to 11 which would specifically benefit the private sectors of the AMED countries and invited Pakistani businessmen to participate in this event as it will provide them a good platform of interacting with their counterparts for exploring areas of common interest. Speaking on the occasion, Mian Shaukat Masud, President, ICCI said being two brotherly Islamic countries; Pakistan and Egypt have a lot in common. -PR


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]
Effluent treatment plants: industries awaiting Rs 276 million project
materialisation [/SIZE][/CENTER][/B]

[B]AFTAB CHANNA
KARACHI (March 25 2009)[/B]

Due to the lethargic attitude of Sindh government and rapid change of faces at the helm in Karachi Water and Sewerage Board (KWSB), the Rs 276 million project of developing four combined effluent treatment plants (ETPs) in the citys industrial areas is far from execution.

As envisioned by former President, General Pervez Musharraf, the four plants were to be developed for the wastewater being generated from the industrial units in Site, Landhi, Korangi, Manghopir, FB Area and North Karachi.

However, official sources in provincial finance department said that the plan, which was to be completed in three years, could not be started due to lack of interest by the concerned authorities in KWSB and Sindh government, the executor and financier, respectively, of the project. To comply with the former Presidents orders, lately the KWSB had initiated a feasibility study in year 2007 and a consultancy agreement was signed with Osmani & Company (Pvt) Ltd on March 19, 2008 through a competitive bidding and selection procedure.

After the formation of new Pakistan Peoples Party (PPP)-led government and tussle over the control of the utility, KWSB new Managing Director Muhammad Suleman Chandio cancelled the consultancy services vide office order No MD/KW&SB/2008/78/ L dated 17 June 2008, sources said.

Based on the above general decision about all consultations of KWSB, the Chief Engineer (E&M) issued a conditional cancellation/ termination to Osmani & Co (Pvt) Ltd vide letter No KWSB/CE/ (E&M)S&STP/08/887 dated 25 June 2008, sources added.

Later, they said, the previous Managing Director KWSB was given a detailed presentation by the consultants on June 28, 2008 wherein he allowed restoration of consultancy services. However, due to change of the MD, the formalities for restoration could not be completed.

The officials said that on September 3, 2008, a meeting was held under the chairmanship of Additional Chief Secretary (Development) that decided to consider foreign consulting firm in association with the local firm due to large size of the project. Subsequent to this meeting, a Prime Ministers directive was also received for expediting the subject consultancy services being undertaken by Osmani & Company, they said.

In order to expediently complete the study as per Prime Ministers directive and for early start up of execution work, they said the KWSB decided to restore the consultancy contract with Osmani & Company. Sources said that for restoration of consultancy services and incorporation of additional services in consultancy agreement, an administrative and financial approval was obtained from Chairman KWSB on February 12, 2009 to avoid further delay in the project.

According to officials, the Sindh government would release total payment in four instalments ie Rs 50 million in 2008-09, Rs 100 million (20 million foreign funding) in 2009-10, Rs 80 million in 2010-11 and Rs 46 million in 2011-12. for the feasibility studies and the paper work of the project.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]

[B][SIZE="4"][CENTER]Repeated shake-up of bureaucracy affects work on uplift projects [/CENTER][/SIZE]

HAMID WALEED
LAHORE (April 03 2009)[/B]

The major shake-up in the provincial bureaucracy and the repeated transfers and postings with the restoration of the provincial government of Shahbaz Sharif has further affected the pace of work on development projects in Punjab, on which work was already moving ahead with snails pace or in some case in cessation due to the recent-past transfers and postings made by Governor Punjab Salman Taseer following the province came under direct rule of centre.

Sources in the Planning & Development (P&D) department told Business Recorder that the department had become a shuttlecock between the rulers of the province, causing undue delays in development work across the province. The sources added further that development spending in the province had come to zero level, as no one was ready to release allocated funds on the fear that anyone from among the rulers might put screw on them up once they overcome their opponents politically.

"Speedy changes in the provincial bureaucracy has brought the development spending to a halt in the province," said the sources, adding, "Had the political system remained intact, the development situation in the province would have been different today." According to the sources, the development spending in the province was lurking around 24 per cent despite the lapse of three quarters of the current fiscal year.

The Punjab government had announced Rs 160 billion Annual Development Programme (ADP) for the current fiscal, out which only Rs 40 - 50 billion have been spent. It may be noted that the Chief Minister Punjab had slashed the development funds of MPs from Rs 80 million to Rs 40 million to avoid misappropriation of funds.

However, no major spending is made on this front as well despite the fact the 90 per cent of the allocations to all MPs have been released in the province. Sources in P&D department said that the Chief Minister Punjab was holding a review meeting of the spending by the provincial MPs very soon. Also, the Chief Minister will review the overall spending in the province in coming week.

It has been learnt on good authority that the P&D has changed its development strategy for next quarter and major spending is likely to be made in purchase of equipment in health, education and other social sectors. The P&D sources are expecting that the total spending would reach to around Rs 90 billion by the end of current fiscal, which means that the Punjab government would be able to spend about 50 per cent of the total allocation for the fiscal year.

[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[CENTER][B][SIZE="4"]Fighting poverty in Pakistan key to Afghan security [/SIZE]
[/B][/CENTER]

[B]TOKYO
(April 03 2009)[/B]

Stabilising Pakistans economy and fighting poverty there are key to combating the insurgency in neighbouring Afghanistan, a special adviser to Japans prime minister said ahead of a Pakistan donors conference this month.

"It has become much, much more clearly recognised that unless you can manage the tribal areas of Pakistan from where a lot of the Taliban is gaining strength, you cannot deal with Afghan security," Sadako Ogata, the special envoy for Japanese Prime Minister Taro Aso to the two countries, told Reuters in an interview on Thursday.

Ogata, who was high commissioner for the UN refugee agency from 1991 to 2000, said while various factors such as religion and politics have encouraged a Taliban insurgency, those struggling from poverty are the most vulnerable.

"The poor people having very little resources would be easily recruited to radical action," the 81-year-old envoy said. Nuclear-armed, and a hiding place for al Qaeda, Pakistan has become a foreign policy nightmare for the West. Pakistans leaders know al Qaeda is encouraging a Taliban insurgency in Pakistani tribal lands bordering Afghanistan as they seek to destabilise the Muslim nation of 170 million people.

Japan and the World Bank will host a Pakistan donors conference in Tokyo on April 17, which Pakistani President Asif Ali Zardari will be attending. Pakistan is hoping that the meeting of potential donors, including the United States, will yield billions of dollars in loans needed to pull the economy round. Ogata said she does not know the amount of the pledge that is being worked out.

A related gathering on the same day will also discuss political support for the South Asian country. Ogata, who now heads the Japan International Co-operation Agency (JICA), said Tokyos efforts for Afghanistan will continue to focus on socio-economic reconstruction and expressed doubts on the Japanese military playing a role on the ground there.

Japans pacifist constitution restricts its participation in military activities overseas and forbids the use of force to settle international disputes. There have been exceptions such as Iraq, Ogata said, where Japan has dispatched ground troops on a non-combat mission that ended in 2006, adding.

"But they were in a very secure area and secluded. Now I dont think thats the kind of operation that is possible in Afghanistan." Around 130 Japanese civilians, mostly from the embassy or JICA, are based in Afghanistan. Most Japanese non-governmental organisations (NGOs) have withdrawn after Taliban insurgents captured 23 South Korean church workers in Afghanistan in 2007.


[B][CENTER]Copyright Reuters, 2009[/CENTER][/B]

lobal Fiscal Crisis Brings Renewed Role for IMF
 

[FONT="Comic Sans MS"][SIZE="3"][COLOR="Black"]By Annys Shin and Thomas Heath
Washington Post Staff Writers
Saturday, April 4, 2009

A year ago, the International Monetary Fund was in a funk. Its handling of past financial crises had made it deeply unpopular. Its finances were shaky. A fifth of the staff was looking to leave. Without new crises to address, doubts about its relevance grew even among insiders
As one veteran staffer put it, "It was a period of introspection."

The second-guessing ended in September as the global economic crisis took hold and countries again turned to the fund for advice and financial support. Its comeback became official this week when world leaders meeting in London pledged to quadruple its resources and strengthen its mandate.

"The IMF has suffered a slow deterioration in morale," said Simon Johnson, a former IMF chief economist. "The Asian crisis was traumatic . . . they lost a lot of confidence."

Staff reductions last year added to the humiliation and embarrassment, he said. "Now it's night and day."

The mood in the hallways "is one of invigoration," said a senior-level IMF official, who declined to be identified because he was not authorized to speak. "People are pretty busy and they are happy to be helping . . . so they feel validated."

The Fund, which has 2,370 employees, most based in Washington, has repositioned itself periodically since its creation after World War II. Its initial focus was to oversee the exchange rate system established under the Bretton Woods agreements. That role ended in the 1970s. In the 1980s, it emerged as the manager of the Latin American debt crisis. In the 1990s, it stepped in to deal with the Mexican and East Asian financial crises.

During this crisis, the IMF regained its stature partly by default. In the months leading up to this week's meeting of the Group of 20 industrialized and developing nations in London, British Prime Minister Gordon Brown talked of creating new international institutions. But in the end, the G-20 chose not to go through the trouble and chose to work with existing organizations.

Former and current IMF officials say the fund's leadership also deserves credit for actively seeking a more central role and for making changes that helped overcome some of the potential objections.

Last month, the IMF revamped its lending practices to make it easier for countries with strong economic policies to borrow more, faster and with fewer strings attached. The centerpiece is a new flexible line of credit designed to be used as a preventive measure.

IMF officials said the fund was trying to respond to long-standing criticism that the organization imposes conditions on developing nations that are too harsh and even harmful to their economies. The flexible credit line replaces a credit line created last fall that had no takers because countries said it offered too little money and too rigid terms.

In a small sign of success, Mexico recently said it would use the new credit line. But South Korea and Singapore still refuse to do so.

Domenico Lombardi, a former IMF official, said ignoring such concerns would have been a major misstep. "This crisis really originated within the advanced economies," he said. "Putting a heavy burden of conditions on emerging economies would add insult to injury."

The members of the G-20 said they would support an allocation of $250 billion in SDRs, a type of currency used only by the IMF that can be exchanged for hard currency. IMF members hold SDRs roughly in proportion to their size, and increasing the allocation would directly benefit developing countries that have been hit hard by the recession. Richer countries such as those in Western Europe can also lend their SDRs to countries that need help, such as those in Eastern and Central Europe.

The increase in lending resources reflects the scale of the needs created by the recession and signals a mounting workload at the IMF.

However, the fund was not given additional money for its operations, and some inside question whether, after staff reductions and a recent spike in retirements, the institution will soon become overburdened.

"We are now overstretched, and we probably went too far [with staff reductions last year]," said the senior IMF official. "We need the resources to help our membership."

The fund has stepped up recruiting. And the financial crisis has spurred interest. The total number of applicants for professional positions in the first quarter of 2009 exceeded that of the same period in 2007 and 2008, said spokeswoman Conny Lotze. [/COLOR][/SIZE][/FONT]

[B][CENTER][SIZE="3"]Land for Gwadar airport: Balochistan government held responsible for raise in price [/SIZE][/CENTER][/B]

[B]MUSHTAQ GHUMMAN
ISLAMABAD (April 30 2009)[/B]

The Ministry of Defence has held the Balochistan government responsible for 122 percent increase in the price of the land for New Gwadar International Airport (NGIA). The provincial government has also been accused of not only ignoring the directives of the Deputy Chairman Planning Commission, but also changing the basic data of calculating the average price of land.

The Planning Commission has been directed by the Executive Committee of the National Economic Council (Ecnec) to investigate the Civil Aviation Authority (CAA) act of spending Rs 1.5 billion to purchase land for an airport at Gwadar.

According to official documents available with Business Recorder, a fact-finding committee, comprising, Member (Implementation and Monitoring), Planning Commission, Additional Chief Secretary, Additional Secretary, Finance Division; Additional Secretary, Defence Division; Deputy Director General of Civil Aviation Authority, Senior Member of Board of Revenue, Balochistan; Joint Chief Economist (Projects), Planning Commission and Specialist PSDP, Planning Commission, has investigated the reasons behind the delay in the implementation of the project and increase in the cost of land.

A meeting of the fact-finding committee was held on October 28, 2008. The Additional Secretary, Finance was represented by DFA and ACS Development, whereas Balochistan government expressed its inability to attend the meeting on some unspecified grounds and had made a request for the postponement or reconvening of the meeting. The Deputy Director General, Civil Aviation Authority (CAA) was represented by the Director Planning CAA.

Acting Senior Member, Board of Revenue, Balochistan, Ghulam Rasul Hasni, however, visited the Planningg Commission on October 23, 2008. He was asked by the Member (I&M)/ED IMU to provide the break-up of land, procured for the CAA, owned by private owners and government land.

He, on subsequent telephonic conversation, revealed that all the land procured for the CAA was owned by the private landowners. The viewpoint of the Balochistan government was contained in a brief obtained from the Board of Revenue through the Chief Secretary Balochistan, which was circulated in the meeting. Member (I&M)/ED (IMU) stated that the fact-finding committee has been mandated to look into the reasons for the delay and the increase in the cost of land and the report of the committee would be submitted to the Ecnec for a final decision.

Additional Secretary, Defence , Major General Mir Haider Ali Khan stated that all the facts of the current issue involved in processing the case for the procurement of land for NGIA had been extensively debated upon in the past at various fora, including CDWP, Ecnec, Co-ordination and Implementation Committee (CIC) meetings.

According to the documents, meetings were also held between Deputy Chairman Planning Commission and Governor Balochistan. In addition, meetings have also been held in the Planning Commission office wherein representatives of all the concerned establishments were in attendance. The issues under debate were; (i) Readjustment of the location and reduction in size of the NGIA land and realignment of the proposed Coastal Highway towards the north; and (ii) Enhancement of the rate from the previously assessed figures.

Major General Haider had stated that the Ministry of Defence had all along opposed any increase in cost of land, as well as re-alignment of the proposed Coastal Highway, as it would result in major re-adjustment in the overall project - physically and financially - and had consistently stressed that approval/directions of Ecnec was required.

However, on repeated insistence of CIC constituted for integrated development of Gwadar, the matter was referred to the competent authority which reiterated the original decision, wherein no enhancement in the cost of land for NGIA and no re-alignment of the Coastal Highway were acceptable.

This was conveyed to the CIC accordingly but the stance of Ministry of Defence has not been properly recorded in CIC meetings, he added. "The acquisition of land has been deliberately delayed by the Balochistan government and instead of acceptance of the approved amount (Rs 1050 million) from the CAA, the Balochistan demanded additional funds based on increased rate," Additional Secretary continued.

He further revealed that subsequent to release of funds the issue regarding transfer of the funds was discussed by CIC on December 12, 2006 which decided that payment to land owners be made on the basis of market rate of December 6, 2006.

The proposal of increase in cost from Rs 157, 000 per acre to Rs 348, 140/ (122 percent) was discussed in a meeting held on June 2, 2007. It was chaired by the then Deputy Chairman and attended by Governor Balochistan, CAA Director General Military Land & Cantonment, QMG, GHQ, and DG log JSHQ.

The meeting had decided that "the federal government may consider additional amount from the PSDP 2007-08 and in the subsequent years for purchase of 4300 acres identified/earmarked for NGIA. Meanwhile, the Balochistan government should start making payment to the land owners from the amount already disbursed by the Defence Ministry." CAA on direction of CIC released Rs 1050 million to the Balochistan government on June 2, 2007 for the acquisition of land. This amount was not released earlier because the amount was under active consideration of CIC since 2006.

The federal government subsequently released Rs 453.744 million to Board of Revenue, Balochistan government on February 08, 2008 against a demand of Rs 447 million. Balochistan government handed over the physical possession of land to CCA on May 13, 2008 after completing all the formalities.

Additional Secretary Ministry of Defence subsequently dilated on the factors responsible for delay in the acquisition of land for NGIA. He stated that unit cost of land was obtained from MLC Quetta on 31st January, 2005 and this rate was conveyed to the Board of Revenue (BOR), Government of Balochistan by the CAA on 20th March 2006. CDWP accorded conditional approval on 20th May, 2006 and constituted a committee to verify the cost of land. Planning Commission allocated Rs 1050 million in PSDP 2005-2006 and conveyed this to Ministry of Defence on 29th April, 2006. The entire cost of land at Rs 1050 million was released on 27th June, 2006. However, Anticipatory Approval of the Chairman ECNEC was conveyed to M/o Defence on 30 June, 2006 and final approval on 30th November 2006. Administrative approval by M/o Defence was issued on 26th December 2006.

However, at this stage CIC was formed and the whole matter went before it for deliberations in its various meetings. The CIC, in its meeting held on 26 December, 2006, directed to fix the land price at the then prevailing rate as on 6 December, 2006 (when objection time of 30 days was over after application of Section-4 on 6 November, 2006). The matter was deliberated and every time demand for additional funds was received from the Balochistan government based on the inadequacy of the available resources. Subsequently, Planning Commission facilitated in securing approval of the government for financing the additional cost.

In the very first meeting of the CIC held on 12 December, 2006 enhancement of land price, realignment of coastal highway and shifting of airport site away from the selected location emerged, which was examined on technical grounds and CIC was informed that approach and landing angle cannot be realigned, while land side area mainly comprising the terminal building and allied facilities, can be realigned/redesigned.

The documents further reveal that Additional Secretary Defence categorically referred to acceptance of shifting the earmarked area towards north by the QMG in one of the meetings, which was in the greater national interest since the airport and economic zone deserved the highest priority. Deputy Chairman, Planning Commission directed Balochistan government to hand over the land by 15 November 2007, which was not honoured and the CAA received possession of land on 13 May, 2008 after lapse of 11 months, despite the receipt of the entire cost by the Balochistan government.

He was also of the view that the decisions taken by CDWP and Ecnec were not implemented as approved because the issues of land price and alignment were reviewed by the CIC and referred back to the competent authority with amended proposals. These were subsequently approved, as explained above, and only then was the process moved forward. This has been the actual cause of delay of the project.

According to the Defence Ministry, repeated demands by the Balochistan government to reduce size, re-adjust location, and enhance price of the NGIA land, were the major factors. Deliberation by the CIC to have the Ecnec decision reviewed, which took time, was an inherent subsidiary factor.

Even when the project was realigned and the additional cost of land made available, Balochistan government took 11 months to acquire land and hand over possession of the land after receipt of the entire funds, the Defence Ministry further argued. It is not known when the Planning Commission would submit the investigation report to the Ecnec, which is to be finalised before the convening of the meeting.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]



[B][CENTER][SIZE="3"]Promotion of exports: ministry selects 10 officers for appointment abroad [/SIZE][/CENTER]

MUSHTAQ GHUMMAN
ISLAMABAD (April 30 2009[/B]

Commerce Ministry has selected ten officers of District Management Group(DMG), Commerce and Trade (C&T) and one ex-cadre (Economist) to be appointed abroad to promote Pakistani exports, out of which more than half are, allegedly, 'Parchi Holders' of influential politicians.

The selected officers are: Dr Yousaf Junaid, Counsul General Istanbul(Turkey), Zafar Hasan Counsul General Shanghai (China), Naeem Anwar, Trade Minister New Delhi (India), Eazaz Aslam Dar Commercial Counsellor Los Angles(USA), Hasan M Yousafzai, Frankfurt (Germany) Syed Tajjamal Hussain Sao Palo (Brazil), Saifuddin Junejo, Chengdu (China) Wajihullah Kundi, Kuala Lumpur (Malaysia) Ms Aisha Makhdum Warsaw(Poland) and Muneza Majeed, Jakarta (Indonesia).

However, allegedly, a 'favoured official' of Minister for Information and Broadcasting, Qamar Zaman Kaira and one of the Deputy Inspector General (DIG) Police based in Sindh were not included in the final list.

One of the selected officials, ie, Naeem Anwar was recently promoted to grade 20 and posted as Secretary National Tariff Commission(NTC) despite the fact that one of the other contenders for this slot, Muhammad Shahid, was better qualified. The chairman of the interview committee, former Secretary Asif Shah was reportedly pressurised to recommend Naeem Anwar as Secretary NTC, said one of the top officials of Commerce Ministry on condition of anonymity. The other two officers,ie, Saifuddin Junejo and Zafar Hussain are reportedly the 'favorities' of Roshan Junejo and Munir Orakzai.

Officials in the Commerce Ministry termed the selection procedure of Commercial Counsellors, Trade Ministers and Counsul Generals and Commercial officers as a complete 'eye wash' as all those selected officials have obvious political affiliations. According to the selection procedure 'on paper' all the interested candidates are required to appear in a written test at Lahore University of Management Sciences (LUMS). Those officials who cleared the test are invited for interviews, after which a summary is sent to the Prime Minister who is the final authority to include or exclude any name from the list sent by the Commerce Ministry.

"The entire process is a fraud. Only those officials are selected who are recommended by those who are influential," said an officer of C&T who closely observes the 'selection' every year. After the selection, getting the more 'attractive' station becomes the focus of the winning candidates. Normally, India, United Arab Emirates, USA, UK, France, Germany, Australia and Canada are the favourite stations. The officers of Commerce and Trade Group are of the view that the DMG group are not well versed in trade or its promotion, therefore they should not be given these posts. In the past, top stations were allocated to those officers who were close to the Commerce Minister and the same practice appears to be in vogue, so lamented an officer on condition of anonymity.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]



[B][CENTER][SIZE="3"]IDA to provide $250 million for poverty alleviation project[/SIZE][/CENTER][/B]

[B]RECORDER REPORT

FAISALABAD (April 30 2009)[/B]

International Development Agency (IDA) will provide $250 million for 'Third Pakistan Poverty Alleviation Fund Project' to empower the targeted rural poor people that would help them achieve respectable livelihoods.

According to 'Integrated Safeguards Datasheet', this project will be achieved by increasing number of organisations and inclusion of the rural poor, including women and ultra poor households, in community organisations and their enhanced participation in economic activities, skill enhancement for taking-up higher value employment, and increased income through an increased asset base, improved infrastructure and market linkages.

Environmental and Social Safeguards Specialists of World Bank, Ms Zia Al Jalaly, Mohammad Omar Khalid said that the proposed PPAF III project builds on eight years of PPAF experience and aims to improve poverty outcomes through consolidation and a saturation approach in targeted areas with a stronger focus on the marginalised groups of the most vulnerable and poorest households including women, and through integrated approaches to livelihood enhancement that learn from other programs in Pakistan and South Asia.

The PPAF III project would also strengthen its approach to building inclusive institutions of the poor and improving their access to markets and local government. The approach of PPAF III to credit would be to facilitate outreach, improve capacity and build access to (rather than primarily provide) micro-credit, they added.

WB experts stated that the project comprises of five components, including Social mobilisation and institution building and, livelihoods enhancement and protection, Micro-credit access, Basic services & infrastructure and Project implementation support. For 'Social Mobilisation and Institution Building', IDA will provide $50 million to target and empower the poor by supporting their organisation into three tiers namely the COs and aggregation at a higher village institution and Union Council level, to build voice and scale for an effective interface with local government bodies, other development programs and markets.

PPAF's partner organisations will be entrusted with the task of intensifying their coverage within the Union Council and strengthen new and existing community institutions, WB experts mentioned.

For 'Livelihood enhancement and protection', WB experts disclosed that an amount of $62 million will be spent. The objective of this component is to develop the capacity, opportunities, assets and productivity of community members to reduce their vulnerability to shocks, improve their livelihood and strengthen their business operations. IDA will provide $50 million for Micro-credit access to improve availability and access of the poor strata of the society to micro-finance to enhance their capacities, productivity and returns from livelihood initiatives. In most areas, the intention would be to improve access to existing micro-finance (both PPAF financed and other sources).

For 'Basic Services and Infrastructure', they pointed out that about $80.0 million will be provided to establish and upgrade basic services and community infrastructure to serve the poor ($50m), and to improve health and education facilities ($30m). WB experts pointed out that an amount $5 million allocated for Project Implementation Support, which will facilitate various governance, implementation, co-ordination, monitoring & evaluation, learning and quality enhancement efforts in the project.

It will consist of the following four sub-components, including governance management, project management, monitoring and evaluation and capacity building for institutional development.

The project will be implemented throughout the country. PPAF is an apex organisation that has a strong outreach at the community and village levels in 112 districts of the country. Through a network of 70 partner Organisations (POs) they have organised over 92,000 community organisations in 32,000 villages/rural and urban settlements in 112 (of the 114) districts of the country.

According to 'Integrated Safeguards Datasheet', the various development activities such as microcredit, infrastructure, education and health, skill training are executed through the Partner organisations with field offices around the country.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]42 percent decline in services sector deficit in 10 months [/SIZE][/CENTER]

RIZWAN BHATTI

KARACHI (May 24 2009)[/B]

Services sector trade deficit shrank by 42 percent during the current fiscal year mainly due to rising exports and low imports. Although the services sector has posted a deficit of over 3 billion dollars during ten months (July-April) of current fiscal year, the overall services sector performance improved as imports and deficit had been on decline and exports increased gradually.

The deficit amounted to 3.22 billion dollars in services trade during the period under review due to high payments on account of transportation, travel and government service. However, the deficit amounted to 2.27 billion dollars, or 42 percent, less than 5.49 billion dollars of same period of last fiscal year.

Economists said that declining services sector deficit would help to further curtail the current account deficit, which has been a major challenge for the policy markers and compelled Pakistan to re-join International Monetary Fund program.

"Overall performance of services during the current fiscal has been better than previous years and country's ailing economy needs such trend," they said. The State Bank on Saturday said that the country's services sector exports had surged by 9.13 percent to 2.915 billion dollars during July-April as compared to 2.671 billion dollars of last year.

In another major achievement the services sector imports plunged by 25 percent, to 6.137 billion dollars in ten months as against 8.165 billion dollars of last year. Deficit of transport sector largely contributed to overall deficit, which stood at 1.95 billion dollars as part of 3.22 billion dollars of the current fiscal year.

Rising imports of transportation were major cause of high deficit in this sector, as exports stood at one billion dollars against imports of 2.95 billion dollars. Services deficit in April 2009 stood at 256.634 million dollars with 288.337 million dollars exports and 544.971 million dollars imports.

The country earned 186 million dollars on account of travel services against payments of 906 million dollars. Communication sector exports stood at 110 million dollars against imports of 115 million dollars. Exports of insurance sector reached 48 million dollars against imports of 110 million dollars. Earning from financial sector stood at 57 million dollars against payments of 151 million dollars.

Royalties and licence fee payments reached 80 million dollars against earnings of 12 million dollars, and government services exports stood at 927 million dollars against imports of 283 million dollars during the period under review.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]War on terror costs Pakistan $35 billion: reports [/SIZE][/CENTER][/B]

[B]M RAFIQUE GORAYA

LAHORE (May 24 2009)[/B]

Various government and non-governmental organisations, commercial and industrial chambers and experts have prepared reports about socio-economic costs of Pakistan's fight against terrorism during the past five years. According to the Pak-US Business Council report (2009), Pakistan is the prime victim of Afghanistan's instability, and its economy has so far suffered directly or indirectly a huge loss of 35 billion dollars.

"Moreover, due to widespread unrest and political uncertainty in Afghanistan, a large quantity of Pakistani food items/commodities is smuggled to Afghanistan, which ultimately leads to acute foodgrain scarcity within the country," said report.

According to the Finance Ministry, Pakistan suffered directly or indirectly the loss of Rs 2,080 billion in the war against terror from 2004-05 to 2008-09. It was around Rs 484 billion during the 2007-08 financial year, which badly affected the country's socio-economic development.

It is estimated that it would increase to Rs 678 billion during 2008-09 financial year. The cost includes both direct and indirect on account of loss of exports, foreign investment, privatisation, industrial output, soft image and tax collection. The report further indicates that the expected direct cost of war on terror will reach Rs 114.03 billion in 2008-09 from Rs l08.527 billion last year.

The indirect cost will increase to Rs 563.760 billion from Rs 375.840 billion. According to the report, the anti-terrorism campaign overstrained Pakistan's budget, as allocation for the law-enforcement agencies had to be increased significantly, curtailing the funding for development projects since 9/11.

In its poverty reduction strategy papers-II, the Finance Ministry revealed that Pakistan's participation in the anti-terrorism campaign had led to massive unemployment in the affected regions, which had ultimately increased rural poverty too. It had reached 37.5 percent from 23.9 percent in 2007-08, said the report.

In a well-researched report, former senior Vice-President of Lahore Chamber of Commerce and Industry (LCCI) Sohail Lashari of SOZO parks said that the Swat war had displaced two million residents, increased unemployment manifold, discontinued education of youth, badly damaged infrastructure, finished tourism - the main source of income generation of the area - sparked violence in other parts of the country, and stopped supply of essential raw materials from Swat like marble, gem and jewellery and furniture industries, besides fresh fruits, vegetables and other hilly food items to other parts of the country.

Lashari said that frequent bombings, deteriorating law and order situation and displacement of the local population, had taken a toll on the socio-economic fabric of the country, especially the embattled Northern areas. Due to deteriorating law and order situation and high political risk, the World Bank had blocked lending for two key loans, of at least 834 million dollars, market-based loans, which might increase serious economic problems for the country, he said.

Meanwhile, the experts say that since the start of the anti-terror campaign, an overall sense of uncertainty has prevailed in the country and it is at its peak in NWFP and Fata. It has contributed to capital flight and slowed down economic activities, making foreign investors jittery.

The foreign direct investment (FDI) has been adversely affected by the ongoing anti-terrorism campaign in Fata and other areas of the NWFP. Pakistan's participation in the international campaign has led to an excessive increase in the country's credit risk, due to which recently, the World Bank has lowered our credit rating, say the experts.

The former LCCI Senior President said that the business activity in NWFP was at its lowest ebbs and the Sarhad Chamber of Commerce and Industry (SCCI) had requested government to declare the province a war-affected zone. The SCCI chief said 3,500 industrial units were functioning in the province in 1995, while the number had shrunk to 600 in 2009, and that the terrorist activities had halted commercial activities.

Meanwhile, a Harvard study (December 2008) states that higher levels of terrorism risk are associated with lower levels of net FDI and Pakistan is not any exemption. In an integrated world economy, where investors are able to diversify their investments, terrorism may induce large movements of capital across countries.

According to the statistics of State Bank of Pakistan (SBP), net foreign investment has declined by 13 percent during the first seven months of the current fiscal year, mainly due to massive outflow from portfolio investment due to of poor law and order situation and political instability in the country.

Net foreign investment has registered a decline of some 324 million dollars during the first seven months (July-January) of 2009 fiscal year. Massive outflow of 25.058 million dollars of foreign portfolio investment from the country's equity market was witnessed during the week ended on January 10, 2009. According to National Clearing Company of Pakistan Limited (NCCPL) data, the cumulative outflow of this mode of investment had increased to 49.557 million dollars from January 1 to date.

The foreign portfolio investment has been witnessing a declining trend since the beginning of 2008, as a cumulative figure of this mode of investment has recorded negative 432.458 million dollars from January 1, 2008 to January 9, 2009.

It may be added that the government is engaged in a fierce war to regain the state's effective writ over thousands of kilometres area of Mingora, Buner, Charsadda, Bannu, Peshawar, Hangu, Mardan, Upper Dir, Kohat, Dera Ismail Khan and Lakki Marwat. The tribal agencies, Khyber, Mohmand, Bajaur, Orakzai, Kurram, North Waziristan and South Waziristan have also been under attacks during 2008.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]


[B]
[CENTER][SIZE="4"]Markets forcibly closed [/SIZE][/CENTER]

ANWAR KHAN
KARACHI (May 24 2009)[/B]

City's all markets were forcibly closed on Saturday allegedly by ethnic/political parties to make the strike a success. Several groups of armed persons were reportedly forcing shopkeepers to shut their businesses even in small residential areas. Later in the day all major markets gave a deserted look, particularly during noon hours.

Fear of also violence confined the citizens to their homes as private TV channels aired reports of terrorist incidents. The Chairman of Alliance Markets Association (AMA), Muhammad Atiq, told Business Recorder that armed persons had started forcing traders on Friday evening to shut businesses which left the markets without business the whole day.

He said that traders had, however, rejected the strike call, but fears of terror made them refrain from activity since early morning on Saturday. "People are terrified by the continued battles of the political parties in Karachi due to which any news on street riots makes them review their decision to open business amid strike, and today's situation reflects their fears about law and order situation that abandon trade and commercial activities," he said.

He expressed apprehensions over trade losses because of tense environment in Karachi, saying that about two billion rupees losses had been added to the country's ailing economy. He appealed to the leaders of all political parties to spare the trade and commercial activities from their strikes.

Atiq said that the daily wagers were major victims of these strikes, and the situation was likely to give rise to crimes and increasing unemployment in the city. The Chairman of Karachi Wholesalers Grocers Association, Anis Majeed, told Business Recorder that trade activity could not be resumed in the country's biggest grain market--Jodia Bazaar--as the situation become tense since Friday evening.

Fears of terrorist activities basically kept the traders away from resuming businesses, he said. A number of trucks loaded with grains reached the market but could not unload the commodities because the market was completely shut, and had to be stationed at nearby safe areas, he said, and added that grain supply to the city and upcountry also remained suspended.

The President of All Pakistan Organisation of Small Traders and Cottage Industry, Mehmood Hamid, told Business Recorder that since April 28, for about 11 days, the markets have remained closed because of strikes and holidays, which has caused huge losses.

He said that the country's exchequer also suffered billions of rupees of losses for bad law and order situation in Karachi. He condemned the forced closures of markets by unidentified armed persons. He said that cottage industry also suffered closures because of strikes and load shedding.


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[B][CENTER][SIZE="4"]BUDGET 2009-10: Rs 2.48 trillion outlay envisages 85 percent raise in development expenditure [/SIZE][/CENTER][/B][B]

MUSHTAQ GHUMMAN
ISLAMABAD (June 14 2009)[/B]


The Minister of State for Finance and Economic Affairs, Hina Rabbani Khar, on Saturday unveiled the Federal Budget for 2009-10, according to which total outlay for the next fiscal year will be Rs 2.482 trillion, which is 23.5 percent higher than the budget estimates of 2008-09.

Rs 646 billion allocated for PSDP Rs 722.7 billion gap to be financed with Rs 264.9 billion foreign loan and Rs 457 billion domestic borrowing Rs 660 billion to go to debt servicing Rs 175 billion administrative expense

-- Reckons IMF conditionalities

-- Targets 4.9 percent fiscal deficit

-- Shows relatively moderate burden of new taxes

-- Seeks industry''s revival

The consolidated budget of the federal and provincial governments has been estimated at Rs 2.897 trillion, whereas total resources are estimated at Rs 2.174.9 trillion, with a consolidated budget deficit of Rs 722.7 billion, or 4.9 percent of GDP, which is 1.5 percent higher than what was agreed in the Letter of Intent (LoI) agreed with the International Monetary Fund (IMF) in March 2009.

This deficit will be financed by Rs 264.9 billion foreign and Rs 457.6 billion domestic loans. Analysts are of the view that the government may have agreed with the IMF team to slash the development program by the end of the year to meet the agreed target of budget deficit or may later renegotiate the target based on global economic performance.

Total resource availability during 2009-10 has been estimated at Rs 2.318 trillion, against Rs 1.836 trillion in the budget estimates of 2008-09. According to official budget documents, net revenue receipts for 2009-10 have been estimated at Rs 1.372 trillion, indicating an increase of 23.3 percent over the budget estimates of 2008-09.

The provincial share in federal revenue receipts is estimated at Rs 655 billion during 2009-10, which is 15.3 percent higher than the budget estimates for 2008-09. The capital receipts (net) for 2009-10 have been estimated at Rs 191 billion, against Rs 221 billion budget estimates of 2008-09.

The external receipts in 2009-10 are estimated at Rs 510 billion, which shows an increase of 70 percent over the budget estimates of 2008-09. The overall expenditure during 2009-10 has been estimated at Rs 2482 billion, of which the current expenditure is Rs 1699 billion, and development expenditure at Rs 803 billion.

Current expenditure shows an increase of 3.5 percent over the revised estimates of 2008-09, while development expenditure will increase by 68.1 percent in 2009-10 over the revised estimates of 2008-09. The share of current expenditure in total budgetary outlay for 2009-10 is 68.5 percent, as compared to 79 percent in the revised estimates for 2008-09.

The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs 1189 billion, which is 70 percent of the current expenditure. The size of Public Sector Development Program (PSDP) for 2009-10 is Rs 646 billion, while for other development expenditures an amount of Rs 157 billion has been allocated.

The PSDP shows an increase of 54 percent over the revised estimates 2008-09, which were mercilessly slashed during the current year to meet the budget deficit target agreed with the IMF. The provinces have been allocated an amount of Rs 200 billion for budget estimates 2009-10 in their PSDP.

An amount of Rs 25 billion has been allocated for Earthquake Reconstruction and Rehabilitation Authority (Erra) in the PSDP 2009-10. However, there are no foreign loans expected for this purpose in 2009-10. The budget for fiscal year 2008-09 was estimated a total of 31250 million rupees but the revised estimates gave a zero figure. It is not clear whether this is indicative of the donors'' backing out of their commitments.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

IMF distances itself from carbon tax
 

[U]DAWN June 23, 2009 Tuesday[/U]
Weblink:-
[url]http://epaper.dawn.com/ArticleText.aspx?article=23_06_2009_012_010[/url]
[CENTER][U][B][SIZE="5"][COLOR="RoyalBlue"]IMF distances itself from carbon tax[/COLOR][/SIZE][/B][/U][/CENTER]
ISLAMABAD, June 22: The International Monetary Fund (IMF) has got nothing to do with the imposition of carbon tax in the budget, a representative of the Fund said on Monday.
Terming it an internal decision, he said Pakistan’s economic team saw it as an easy revenue source, generating more than Rs 130 billion.

“We cannot dictate Pakistan to impose tax on any sector. However, revenue generation in Pakistan is by all standards very low,”said IMF’s Resident Representative to Pakistan Paul Ross.

Talking to newsmen after speaking at the Business School of National University of Science and Technology (NUST) on the role of the IMF, Mr Ross said tax-to-GDP ratio in Pakistan was around nine per cent, which was negligible among growing economies.

He said the IMF was focusing on tax administration reforms. He said that only one per cent of population was paying taxes in Pakistan.

The question of providing additional assistance of $4 billion would be decided by the fund’s board, Mr Ross said. He, however, added that donors had already pledged more than $5 billion in Tokyo for the next two years to revive growth.

He said Pakistan was facing serious balance of payments problems because of massive external shocks in terms of rise in oil and food prices, worsening security environment and policy inaction in the early part of this government.

Highlighting features of IMF's stabilisation programme, he said it yielded positive results, expecially in bringing down inflation to 14 per cent from 25 per cent.

Speaking to students of the business school, Mr Ross mentioned several challenges that Pakistan would have to confront, which would require a strong commitment from the country's political leadership.

One of the challenges, he said, was governance. "For maintaining strong economic growth, good governance will be critical."

islamabad, june 22: the international monetary fund (imf) has got nothing to do with the imposition of carbon tax in the budget, a repre- sentative of the fund said on monday. terming it an internal decision, he said pakis- tan’s economic team saw it as an easy revenue source, generating more than rs 130 billion. “we cannot dictate pakistan to impose tax on any sector. however, revenue generation in pakistan is by all standards very low,”said imf’s resident representative to pakistan paul ross. talking to newsmen after speaking at the business school of national university of science and technology (nust) on the role of the imf, mr ross said tax-to-gdp ratio in pakistan was around nine per cent, which was negligible among growing economies. he said the imf was focusing on tax administra- tion reforms. he said that only one per cent of pop- ulation was paying taxes in pakistan. the question of providing additional assistance of $4 billion would be decided by the fund’s board, mr ross said. he, however, added that donors had already pledged more than $5 billion in tokyo for the next two years to revive growth. he said pakistan was facing serious balance of payments problems because of massive external shocks in terms of rise in oil and food prices, wor- sening security environment and policy inaction in the early part of this government. highlighting features of imf's stabilisation pro- gramme, he said it yielded positive results, expe- cially in bringing down inflation to 14 per cent from 25 per cent. speaking to students of the business school, mr ross mentioned several challenges that pakistan would have to confront, which would require a strong commitment from the country's political leadership.
[B][COLOR="DarkRed"]one of the challenges, he said, was governance. "for maintaining strong economic growth, good governance will be critical."[/COLOR] [/B]

Economic challenges facing pakistan
 

ECONOMIC CHALLENGES FACING PAKISTAN
DR. ISHRAT HUSAIN
There is almost a consensus that the major economic challenges facing
Pakistan are rising poverty and unemployment, heavy external and domestic
indebtedness, high fiscal deficit and low investment. The debate has so therefore
focussed on the means to face these challenges and particularly on the ways to bring
about economic recovery.
The current debate about economic recovery in Pakistan has surprisingly
boiled down to a number of simplified observations. A group of commentators place
the blame squarely at the doors of the IMF and World Bank and this Government’s
sense of docility, submissiveness and helplessness against this powerful instrument
of Western (read: American) domination. Another group of ever dissatisfied and
perpetually critical writers who find every Government to be inept, attribute
malafide motives and lack of decisiveness in taking bold measures. A third group of
well-intentioned and economically literate observers, provide partial solutions
which make perfect sense if each is taken in isolation but can break the back of the
proverbial camel if they are lumped together. I would submit that there are no easy
solutions and the decisions made in choosing any one of the possible options involve
trade offs and choices, which in turn will create a different set of winners and losers.
I will like to focus today on a question which is uppermost on every body’s
mind: why have not things improved during the last 15 months according to
popular expectations?
2
First the decade of 1990s was a lost decade as far as Pakistan’s economic
development was concerned. Frequent political changes and lack of continuity in
policies, poor governance and the last May 1998 developments had together created
very difficult economic conditions in the country by October, 1999. Per Capita
economic growth rates had slided to 1 – 1.5 percent Investment rates had declined
from 20 to 15 percent of GDP, poverty had doubled from 17 to 34 percent, external
debt had doubled from $ 18 billion to $ 36 billion, debt servicing had risen to a level
where it claimed 56 percent of revenues, fiscal deficits were averaging about 6
percent of GDP, Development expenditures, particularly on education and health,
were curtailed by one half from 6 percent of GDP to 3 percent. In 1996 Pakistan
was declared the second most corrupt nation in the world. The challenge of
averting this slide and move the economy out of such critical conditions therefore
was extremely daunting. The task was made even more difficult by the initial
reaction of the international community to the change in the government and the
conflicting demands of various segments of population. Accountability, whereby all
those found guilty of corruption and malpractices in the past, was one of the major
demands articulated by the public at large and the media. But this created a
tension with the objective of economic revival as the businessmen and bankers felt
threatened by such moves.
The lingering dispute with Hubco had during the preceding three years,
damaged the investor friendly image of Pakistan. Foreign currency deposits of nonresident
Pakistanis had been frozen in May, 1998 and had antagonized this
3
important class of investor. Thus investor sentiment did not take a turn for better
and domestic and foreign investment which are key for economic revival did not
flow in to the levels we had expected.
Second, we have to decide as to whose expectations we are talking about.
Pakistan’s credibility was quite low both externally and particularly among the
International Financial Institutions and also domestically with the general public.
This Government had to make a policy decision whether it will seek assistance from
the International Financial Institutions or not. Until June 2000, the country was
able to manage its finances without any recourse to International Financial
Institutions. We serviced our debt and external obligations on time. We liberalized
our foreign exchange regime and restored the conditions prevailing before May
1998 without receiving any assistance from abroad. The exchange rate remained
stable without any major volatility. Interest rates were lowered by 4 percentage
points. Despite this, domestic investors remained shy, private sector demand for
credit was insignificant and the overall pace of economic activity did not pick up to
make any dent in unemployment which had risen during the last three to four years.
The most difficult challenge faced by the country today in the short term is
external liquidity problem i.e., the ability to meet its current obligations such as
imports of goods and services and meet all debt service obligations at the same time.
There is a gap between external receipts and external payments of about $ 2.5-3
billion annually for the next few years. To meet this gap Pakistan has to reschedule
4
its debt service obligations and find ways to obtain new concessional loans after
curtailing its expenditures and maximizing its revenues.
Those who accuse the present economic managers of toeing the lines of the
IMF, being totally submissive to their dictates and (in the eyes of some) acting as
agents of these institutions forget a simple fact : Pakistan has had more than half-a
dozen economic managers during the past 10 years, and some of them were
popularly elected politicians, others were technocrats or former bureaucrats who
had no past relationship whatsoever with the IMF or the World Bank.
Unfortunately they had to enter into as many as 11 agreements with IMF during
past 10 years, had to follow the same course of action and the same policy
prescriptions, even at the time when we did not have the urgent need to reschedule
Pakistan’s external debt. These managers also had the luxury of using foreign
currency deposits of residents and non-residents to finance the external deficit. They
borrowed short-term commercial loans to build up reserves. I am not trying to be
defensive but am laying out the facts that since May, 1998, the country has lost one
important source of external liquidity i.e., foreign currency deposits. This
Government has decided not to borrow short-term commercial debt for building up
reserves. Home remittances through official channels are down by $ 500 million
annually compared to the pre-May 1998 period. Foreign investment flows are down
to less than $ 400 million compared to average flows of $ 1 billion. Oil import prices
have shot up from $ 14-15 barrel to $ 28-$ 30 barrel and the oil import bill has
doubled from $ 1.3 billion to $ 2.6 billion in just one year. During the first half of
5
the current fiscal year, we have already imported oil worth $ 1.7 billion. Despite the
15-20 per cent increase in volume of our textile exports, the unit value of our
exports are down by 7-10 per cent on average. In this scenario, how can any one
keep the wheel of the economy moving in an orderly manner without recourse to
relief or injection by the International Financial Institutions. Japan and other
bilateral donors have also not come to our help as they had before May 1998.
No economic manager worth his grain will like to have his hands tied down
by external agencies, while he has to deliver according to the expectations of
domestic constituents. The sooner we are able to ween ourselves off the IMF
programmes the more liberated will be the economic managers of this country in
pursuing an independent course of action, which balances the interests of the
common man, the requirements of the global economy and, at the same time,
follow a prudent growth – oriented set of policies. It is not that we are not
committed to macro economic stabilization or removal of distortions from the
economy. But we need the flexibility to do so. I can assure this audience that the
present global environment in which we are expected to produce instantaneous
results is highly constrained and does not allow much room for maneuver.
As the debt rescheduling period was coming to an end in December 2000,
and the Government’s capacity to fully service its external debt had not improved
during the last 2 1/2 years period there were two options available – unilateral
moratorium or further rescheduling. The option of unilateral repudiation or
moratorium would have caused such enormous hardships for the country that it
6
would have been simply unbearable. How many of us could have tolerated the
prospect of PIA planes being seized at international airports, the requirement that
all our imports must be paid for in cash and the inflation rates running at 30-40
percent with scarcities and rationing all around. I do not think any Government
would like its citizens to go through this scenario. We therefore rejected this option
as we came to the conclusion that the situation would have been far worse and the
overall suffering to the population would have been more severe.
The second option of approaching the IMF has been severely criticised.
Many learned commentators have questioned why the economic team had to yield
to all the conditionalities imposed by the IMF. Why did not the country negotiate
softer conditions? As I mentioned our only motivation for entering into an
agreement with the IMF was to secure rescheduling of Pakistan’s external debt.
To retain its reputation as a vigilant watch dog, the IMF insisted, before
reaching an agreement, on tougher measures and upfront actions from the
government as we had displayed a poor track record in the past. Their management
was of the view that Pakistan had very low credibility as successive governments
had agreed on a number of conditions but these were either not fulfilled or partially
fulfilled. They wanted the present government to implement all those conditions as
prior actions before they could take the loan proposal to their Board. These prior
actions consisted of the free float of rupee, (without intervention by the State Bank
of Pakistan), agriculture income tax, GST on retail trade, GST on services,
deregulation of petroleum imports, linking domestic POL prices to international
7
prices, increase in consumer prices of gas, adjustment in electricity prices, widening
of the tax base, removal of the subsidies. Naturally the Government had little
choice – if it did not take these actions an agreement with the IMF could not be
reached and thus rescheduling would not have been possible. In other words, we
had to make up for our past lapses – all in one go. There are many on-going time
bound conditions that have to be met during the next 9 months, which are structural
in nature such as privatisation, restructuring of public corporations, financial
sector reforms and civil service reforms. While the fulfilment of these prior
conditions and conclusion of agreement with the IMF has restored the credibility of
Pakistan vis-a-vis International Financial Institutions, Paris Club and G-7
Governments and improved the market sentiment among credit rating agencies and
fund managers abroad, I must confess that it has not been widely welcomed
domestically.

Economic Indicators (2008-2009)
 

Pakistan Economy
Economic Indicators (2008-2009)
Indicators 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (Jul-Sept)
2008-09
Exports
(Billion $) 9.13 11.16 12.31 14.39 16.47 17.01 19.22 1.49
(Jul 09)
Imports
(Billion $) 10.34 12.22 15.59 20.6 28.58 30.54 39.96 2.64
(Jul 09)
Trade Balance
(Billion $) (1.20) (1.06) (3.28) (6.21) (6.21) (6.21) (6.21) (1.15)
FDI
(Billion $) 484.7 798 949.4 1,524 3,521 5,125 5,152.80 0.46
Foreign Investment
(Billion $) 475 820 922 1,677 3,872 8,417 5,193.00 0.67
(Million $)
(FDI+Public &
Private Portfolio)
Workers Remittances 2.39 4.24 3.872 4.17 4.6 5.49 6.5 2.33
(Billion $)
Forex Reserves
(Billion $) 6.43 10.72 12.33 12.61 13.14 15.18 10.83
(24th July) 14.75
(12 Oct 09)
Exchange Rate
(Rs./ US$) 61 57.7 57.92 59.66 60.16 60.5 71 83.3
(19 Oct 09)
Stock Exchange Index 1,520 3,402 5,279 7,450 9,989 13,772 12,289.03
(June) 7872.23
(Aug 10-15, 2009)
GDP Growth 3.60% 5.10% 6.40% 8.40% 6.60% 7.00% 5.80% 2.00%
Inflation 3.40% 3.30% 3.90% 9.30% 8% 7.90% 10.30% 21%
Source: State Bank of Pakistan (SBP)
Federal Bureau of Statistics (FBS)
Federal Board of Revenue (FBR)
[url]www.brecorder.com[/url]

Banking on the banks
 

Banking on the banks
Oct 15th 2009
From The Economist print edition

The rescued may turn out to be rescuers

Illustration by S. KambayashiTHERE can be few more extraordinary sights than politicians indulging in a fit of tightfistedness ahead of an election. Normally party leaders compete to bribe voters with their own money. But the British party-conference season, the last before polls expected to take place in May or June, was dominated by a series of pledges to cut government spending.

The public has not driven this shift in tone. An Ipsos Mori poll in September found that only a quarter of Britons thought spending cuts were necessary. In America, where “tea party” anti-tax demonstrators have captured media attention, only 3% of respondents to a CBS News poll this month thought the deficit was the most important issue facing the country. Nor have markets forced politicians to put on their hair shirts. Governments are able to sell bonds yielding just 3-4%. Rather it is the sheer scale of government deficits that seems to have triggered the change. Both Britain and America have shortfalls of more than 10% of GDP, a level seen only during world wars.

Beyond saying that such a deficit is unsustainable, however, it is not obvious when a crisis point will be reached. How about a total government-debt level of 100% of GDP? Measured by gross financial liabilities (excluding the assets that governments might own) that level has already been surpassed by five OECD countries—Belgium, Greece, Iceland, Italy and Japan. Iceland aside, economic life in those countries seems to carry on.

There are three main fears about excessive government deficits. First, that the need to divert savings into buying public-sector debt will “crowd out” private-sector investment. Second, that servicing the debt will be a burden on future generations. And third, that governments will therefore be tempted into inflation or devaluation as a way of softening the blow.

The final two concerns mainly preoccupy countries that owe their debt to foreigners. To the extent that domestic borrowers are paying interest to domestic creditors, these problems should be manageable. Foreign debt is a much bigger headache, as the example of Iceland, a small country which assumed the foreign-currency debts of its banks, shows. Unlike Belgium, Greece and Italy, it does not have the shelter of euro membership. Unlike America it does not have the luxury of its debt being denominated purely in its own currency.

Eventually, of course, the high levels of British and American public debt will create problems with both countries’ creditors. But it is very hard to say when.

Worrying about a debt catastrophe may also draw attention away from the “crowding out” issue. This too is not a problem in the short term. A big reason why many economies have just experienced a recession is that the private sector has been unwilling (or unable) to borrow.

But in the medium term the British and American public sectors will still have big deficits to finance and may not want to depend on the kindness of sovereign-wealth managers. The temptation will be to lean on the banks. Proposed regulations (such as Britain’s new liquidity rules, unveiled earlier this month) will require banks to hold more government bonds. And one reason why central banks have kept interest rates so low is that it allows the banks to earn more money and rebuild capital by borrowing short term and investing the proceeds in higher-yielding longer-dated government bonds. The same trick was used by the Federal Reserve in the 1990s.

These tactics help the weekly government-debt auctions go with a swing. Barclays Capital estimates that banks in Britain and America have each bought around $240 billion of government debt over the past year. In Japan this trend is long-established. Morgan Stanley calculates that financial institutions (other than the Bank of Japan) bought ¥224 trillion ($2 trillion) of the ¥383 trillion of Japanese government bonds issued in the decade to 2008.

Like two drunks leaning against each other to stay upright, this leads to an odd symbiotic relationship in which governments have stepped in to rescue the banks, only for the banks in turn to finance the government. In the long run the danger is that this cosy relationship means lending is diverted away from productive private-sector projects and into government spending. Economic growth will be slower as a result.

A debt crisis, with Western governments defaulting or devaluing, is only one possible outcome. Japan shows another: a long period of stagnation in which debt constantly gnaws away at the economy like the eagle on Prometheus’s liver.

[SIZE="4"][B][CENTER]Pakistan and Turkey to increase bilateral trade to $2 billion [/CENTER][/SIZE]

ISLAMABAD (November 03 2009)[/B]

Pakistan and Turkey have agreed in principle to increase the level of bilateral trade to $2 billion from existing $700 million in a year. The understanding was reached during a meeting between the Foreign Minister Shah Mahmood Qureshi and his Turkish counterpart Professor Dr Ahmet Davutoglu, held on the sidelines of D-8 Council of Ministers held in Kuala Lumpur, says a message issued here by Pakistan's High Commission in Malaysia.

Both sides also agreed to move forward on timeline basis for signing of Preferential Trade Agreement (PTA) and abolition of visa for businessmen between the two countries. Talking to the Turkish Foreign Minister, Qureshi expressed the confidence that the high-level consultative council established during the recent visit of Turkish Prime Minister, would function under the patronage of the two prime ministers.

Turkish Foreign Minister said that Turkey has been co-operating with certain other countries on the same lines and model. Qureshi requested the Turkish Foreign Minister to provide Pakistan with the successful model of cooperation, which Turkey consider successful for intensive co-operation with other countries. The framework for co-operation would be identified for future meetings of the ministers, which will precede before the Prime Ministers' meeting to finalise the areas of co-operation identified by the concerned ministers.


[CENTER][B]Copyright Associated Press of Pakistan, 2009[/B]

[SIZE="4"][B]vernment accords high priority to Fata uplift: Prime Minister [/B][/CENTER][/SIZE]

[B]ISLAMABAD (November 03 2009)[/B]

Prime Minister Syed Yusuf Raza Gilani has said that government accords high priority to the development of Fata and ensured to increase funds for better health and education facilities besides infrastructure development. The Prime Minister said this while talking to a delegation of Fata MNAs led by their parliamentary leader Munir Khan Orakzai, which called on him at his Parliament House Chamber here on Monday.

The Prime Minister said the Minister of State for Finance Hina Rabbani Khar has been already directed to oversee and monitor the implementation of the developmental work in Fata and to ensure better co-ordination, hold monthly meetings with the Fata Parliamentarians.-PR


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]

[B][CENTER][SIZE="4"]Pakistan pressing US for direct market access: Tarin [/SIZE][/CENTER]
KARACHI (November 14 2009)[/B]
Finance Minister Shaukat Tarin said on Friday that Pakistan has been pressing hard on United States to provide a direct market access to its products in the shape of Free Trade Agreement (FTA).

"We have talked to General Metthew John (US Assistant to Deputy Under Secretary) and categorically stated that we want direct market access along with the progress on the reconstruction opportunity zones (ROZs)", he said while talking to newsmen at Jinnah Terminal of Karachi Airport after seeing off the high powered US delegation led by Deputy Under Secretary for US Defence, Paul A. Brinkley.

Tarin said that he had told General John during the meeting today (Friday) that United States has signed FTA with 16 countries which are not that much strategic partners of US as Pakistan is. They included Jordan, Oman, Egypt, he added. He said that Pakistan was also seeking ROZs as well as GSP Plus from European Union, but at the same time we want FTA with US.

To a question the Federal Finance Minister said that the US had bogged down Pakistan in Bilateral Investment Treaty during the previous regime. Both the countries could have signed FTA had Pakistan been pressing for duty free access at that time, he noted.

"Now we are pressing very hard for direct market access so that our factories are run and employment is generated in the country", he said and added that it seems they (US) have now started understanding our point of view. "I have told them that Pakistani textile entrepreneurs might shift to Oman because US has provided them a duty free access. Oman is a country with a per capita income of $15,000 while Pakistan has a per capita of $1000 and there is no justification in depriving Pakistan of FTA." Shaukat Tarin noted that although it is a difficult job but we are focussing on FTA and trying aggressively for this access.

Responding to a question, the minister said that Pakistan would get $2 billion from Friends of Demoractic Pakistan (FoDP) this year. "We have already received commitments for $1.8 billion from FoDP which included $950 million from US, $380 million from Saudi Arabia, $300 million from Japan, $250 million from ADB", he added.

The Finance Minister said that there was no need to worry as Pakistan will have sufficient funds from its friends and this is the reason why Pakistan does not need a stand-by arrangement from IMF. Replying to another question, Tarin said that the back log of coalition support fund (CSF) has surged to $1.4 billion and Pakistan is expecting to get a tranche of $521 million in the next few days.

However, Pakistan is pressing to get $1.1 billion under coalition support fund this fiscal year, he maintained. Tarin said that war on terror was a priority and the government is committed to meet all its expenses.


[B][CENTER]Copyright Associated Press of Pakistan, 2009[/CENTER][/B]

[B]
[CENTER][SIZE="4"]Government working on nine-point economic reforms agenda: Khar [/SIZE][/CENTER]
ZULFIQAR AHMAD
ISLAMABAD (November 14 2009)[/B]

State Minister for Finance Hina Rabbani Khar on Friday informed the National Assembly that the government is working on nine-point economic reforms agenda to bring economy back on track for achieving GDP growth, which has been targeted at 3.3 percent during the current financial year.

Responding to questions raised by different members, she said that this policy framework encompasses long-term macro-economic stability with desired increase in productivity, besides doing away with the energy crisis and removing infrastructure bottlenecks through public-private partnership.

The government, she told the house, is working on a plan to convert the national savings into an independent organisation to make it more attractive by increasing return on deposits and to enlarge its resource base. She further said that 58,077 defaulters of House Building Finance Corporation (HBFC), with the default amounting Rs 6.4 billion, is adversely affecting the advancing of further loans to the poor masses living without shelter.

Responding to a query, she said that the government collected over Rs 112 billion on account of petroleum development levy during the last financial year. And the amount is mainly being used to make billions of rupees pending payments to oil companies as the commodity was subsidised for the benefit of the public.

Commerce Minister, Makhdoom Amin Fahim informed the house that country's exports in the last three months have stood at $4.4 billion against the imports of $7.5 billion in the same period.

He said that the government has announced various initiatives in the Strategic Trade Policy Framework (STPF) to boost exports by exploring non-traditional areas. He said that the Economic Co-ordination Committee (ECC) of the Cabinet has allowed import of 600,000 tons of urea fertiliser, adding it has also been decided to give subsidy and sell at Rs 750 per 50 kg bag to the growers.

On the occasion, Privatisation Minister, Naveed Qamar informed the house that Benazir Employment Stocks Option (BESO) scheme is being implemented in all government owned organisations under which 12 percent shares are being transferred to the employees of the institutions.

Replying to questions about BlackWater in the country, Interior Minister Rehman Malik said that there is no presence of BlackWater, saying Pakistan would not allow any foreign troops to launch any operation against terrorist groups inside Pakistan as its own forces are strong enough to deal with this menace effectively.

However, he said that some personnel of a US security company Dynacop are going to Afghanistan via Pakistan as the company is working in Kabul for security purposes. Moreover, he said these personnel are escorted by security agencies of Pakistan up to Afghan border and they are not allowed to stay in Pakistan. He assured the house that no foreigner would be allowed to carry and display unlicensed weapons, moreover, security agencies have been instructed to take strict action against those foreigners found violating the law.


[B][CENTER]Copyright Business Recorder, 2009[/CENTER][/B]


[B][CENTER][SIZE="4"]Balochistan package: minister appreciates government decision [/SIZE][/CENTER]
LAHORE (November 14 2009)[/B]
Punjab Finance Minister Tanvir Ashraf Kaira has said that the government's decision to take political leadership in confidence on Balochistan package is a positive step. While talking to media here on Friday, the minister said this step would boost harmony in all circles of Balochistan.

"It would not only promote political reconciliation but also highlight the major issues faced by the people in the province. "The meeting between Prime Minister Yusuf Raza Gilani and PML-N leader Muhammad Nawaz Sharif is a positive step and it would strengthen political system. I hope that the contact between the two major parties would continue in future. "All political forces are united in stabilising democratic institutions," he added.


[CENTER][B]Copyright Business Recorder, 2009[/B][/CENTER]

[B][CENTER][SIZE="4"]Malaysia, Pakistan to enhance investment opportunities [/SIZE][/CENTER]
RECORDER REPORT
ISLAMABAD (November 19 2009)[/B]

Malaysia and Pakistan have agreed to explore and enhance mutual investment opportunities through an interactive co-ordination between the Pakistan Board of Investment and the Malaysian Industrial Development Authority (Mida).

According to an official statement, Secretary Ministry of Investment, Board of Investment (BoI), Tariq Iqbal Puri during his recent official visit to Malaysia along with a high level delegation both the brethren counties were agreed to explore investment opportunities and areas of mutual co-ordination.

The statement added that during a meeting between Tariq Iqbal Puri and Dato Wahab Hamid, Deputy Director General Malaysian Industrial Development Authority (Mida), it was decided to share investment intelligence and encourage cross border investors and intend technical co-operation between the two sister organisations.

The Secretary appreciated the role played by the Mida in the economic stability of Malaysia and told his counterpart that BoI will also consider seriously to follow the steps taken by Mida in regard to promote investment.

One striking feature that has helped the improved effectiveness of Mda is "One Window Operation," which ensures close co-ordination among Immigration, Environment, Telecom, Customs, Labour and Power departments with a change mode from regulation to facilitation.

Investment Counsellor, Dato Muhood. Salim Bin Fateh Din hosted the investor roundtable meeting in his office. Courtesy Pakistan HIC and Pakistan Commercial Counsellors, Pakistan Mission Kuala Lumpur the meeting was attended by prominent business houses like DRB-HICOM Berhad, Renexus (M) Sdn Bhd, MMC Corporation Berhad, Pollution Engineering Sdn Bhd, Bina puri Holdings Bhd, Tenaga National Berhad (TNB), MayBank, Padibernas Nasional Berhad (Bernas).

The Secretary, Ministry of Investment explained the purpose of his visit and methodology, which is to be adopted during the interactive session. Thereafter, leading entrepreneurs in Agriculture, Energy, Housing & Construction, Oil & Gas and Financial sectors were taken up individually and an extremely candid approach was adopted to explain investment potentials, incentives and functional modalities of each sector.

During a visit to Port Klang Free Zone (PKFZ) the General Manager explained the organisational and working modalities of the Port. The facility is based on integrated concept of port cum free industrial zone. Being in close proximity to Kuala Lumpur one could envisage its viability in the area of commerce, trade and industrial activity.

In spite of being quite young among its competitors it is ranked 16th in the container intensity. Later in the day, the delegation proceeded to Meat Value Addition Unit and Abattoir to benefit from their working experience in Hilal Food, since Malaysia is a big name in the region.


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[B][CENTER][SIZE="4"]Foreign investment declines [/SIZE][/CENTER][/B][B]

RECORDER REPORT
KARACHI (November 19 2009)[/B]

The foreign direct investment (FDI) is continuously on the decline for last few months and it posted a decline of 53 percent during the first four months of the current fiscal year. The State Bank of Pakistan (SBP) on Wednesday said that FDI at 621.8 million dollars during the first four months (July-October) of current fiscal year 2009-10, registered a decline of 707.7 million dollars, or 53.2 percent from 1.329 billion dollars in the same period of last fiscal year 2008-09.

However, portfolio investment during this period posted a surge of 266 percent due to some improvement in the equity market. Portfolio investment surged to 288.4 million dollars in July-October of fiscal year 2009-10 against a negative position of 173.9 million dollars in corresponding period of fiscal year 2008-09. Net foreign investment, comprising foreign direct investment and portfolio investment registered a decline of 21.2 percent to 910.1 million dollars during the first four months of fiscal year 2010.

Including privatisation: proceeds, total private investment posted a decline of 19.8 percent to 940.4 million dollars in July-October of 2009 previously stood at 1.172 billion dollar in same period of 2008. Economists said that the country has failed to capitalise on the improvement of economic and political side in attracting more foreign investment as war in the Northern areas badly damaged the country's image.

"Domestic shocks like power shortage, worst law and order situation and uncertainty on the political front have largely hurt the foreign direct investment," they added. They said that after the financial assistance from the International Monetary Fund (IMF), investors had rejoined Pakistan's equity market by investing their capital. Therefore, some increase was witnessed in portfolio investment.


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[CENTER][SIZE="4"]Minister directs industrialists to pay Site Limited dues [/SIZE][/CENTER]
RECORDER REPORT
KARACHI (November 19 2009)[/B]
Provincial Minister for Industries and Commerce, Rauf Siddiqui has warned industrialists to pay Site Ltd dues otherwise NOC for industrial units transfer letters and new connection of utilities such as power and gas would not be issued.

Talking to newsmen after meeting with Site Association of Industry (SAI) on Wednesday, he said, that Site Ltd have been facing serious financial problems and these problems may have negative impact on the ongoing development work in Site industrial area, Site Super Highway and Korti industrial areas.

He said that around Rs 600 million are due from industrialists of Site industrial area and added that if Site Ltd gets these dues it would continue its development work smoothly. He said that it is also under consideration that Site Ltd should abolish subsiding water supply provided to site industrial area to ease its financial crises.

Speaking at the meeting he was of the view that the industrialists are not interested to get their problems resolved. He stressed that they must start taking interest to get their problems resolved. He advised industrialists to make efforts to remove encroachment in their areas.

He said that laying a bigger pipeline needs around Rs one arab and hoped that its PC-1 would be prepared soon. Chairman, Site Association, Saleem Parikh said that industries are facing serious water shortage which ultimately has negative impact on production.

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[B][CENTER][SIZE="4"]Punjab Investment Gala: PBIT invites Karachi businessmen [/SIZE][/CENTER]
LAHORE (November 22 2009[/B])

Consultant to Chief Minister Punjab on Economic Affairs and Vice Chairman Punjab Board of Investment and Trade (PBIT) Pir Saad Ahsanuddin has formally invited leading Karachi businessmen on behalf of the Chief Minster Punjab to Punjab Investment Conference to be held in January next year.

This invitation was extended to businessmen from Karachi Stock market, Presidents of multinational private sector organisations, heads of business forums and leading traders in Karachi, including Syed Salim Raza, Governor State Bank, Arif Habib (Arif Habib Group), Arif Bokhari (UBL) and Shehzad Naqvi (RBS) and other notable during Pir Saad's meetings with them, says a hand out issued here on Saturday.

The vice-chairman PBIT apprised the Karachi investors that Punjab had a necessary infrastructure for local and foreign investment. Above all, business-friendly policies had been introduced to expedite the pace of economic growth under the leadership of Punjab Chief Minister, Muhammad Shahbaz Sharif.

He further said that the PBIT had outreached local and foreign investors to identify areas of facilitation they require from the Punjab government. The PBIT was providing one-window operation to the investors and businessmen to initiate fresh projects in the province, he said. -PR


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[B][CENTER][SIZE="4"]Foreign debt, liabilities touch new peak [/SIZE][/CENTER]
RECORDER REPORT
KARACHI (November 22 2009)[/B]

The country's external debts and liabilities have posted a raise of some three billion dollars to a new peak of 55.2 billion dollars by end of September 2009 mainly due to International Monetary Fund's (IMF) standby loan package to avert balance of payments crisis.

The State Bank of Pakistan on Saturday said that the country's external debt and liabilities had been consistently climbing for past few years and overall an increase of 2.888 billion dollars was registered in external debts and liabilities during the first quarter (July-Sep) of current fiscal year. After the current upsurge, overall external debts and liabilities reached new high at 55.216 billion dollars as on September 30, 2009, against 52.333billion dollars at the end of last fiscal year.

"As per Fiscal Responsibility and Debt Limitation Act, 2005, the government has to reduce its foreign debt by 2.5 percent of GDP every year. However, during last two years, due to the global economic meltdown, slow foreign investment and poor economic activities on domestic front the government failed to reduce the foreign debts," economists said.

On the one hand Pakistan is facing problems for reimbursement payments from the US, while on the other the current account deficit is on the rise, which compelled the government for fresh borrowings, they said. The country's external debts registered an increase of 3.03 billion dollars, to 53.794 billion dollars from 50.759 billion dollars during first three months of current fiscal year.

Foreign exchange liabilities depicted a slight decrease, of 152 million dollars, during the first quarter of current fiscal year. Foreign liabilities decreased to 1.422 billion dollars by the end of September 2009 as against 1.574 billion dollars as on June 30, 2009.

Foreign debts, as per ratio, also rose to 33 percent of overall GDP during July-Sep of fiscal year 2009, as at present GDP size is about 162.5 billion dollars. Major increase has been witnessed in the medium and long term debts, which posted an increase of 1.79 billion dollars, to 43.168 billion dollars from 41.459 billion dollars by the end of September 2009.

Similarly, during the same period with an increase of 2.13 billion dollars, the country's overall foreign exchange reserves stood at 11.221 billion dollars, up from 9.118 billion dollars. The major surge was witnessed after standby loan agreement with IMF and so far Pakistan has received some 4 billion dollars of 7.6 billion dollars program, while another payment of fourth tranche worth of 1.2 billion dollars is expected by the end of November 2009.

Economists said that rising current account deficit had compelled the government to go for fresh borrowings from internal and external sources. Therefore, overall debt burden is increasing gradually. The country has already requested for another loan of 4 billion dollars, which has also been approved by the IMF board in its recent meeting. Therefore, it is expected that during the current fiscal year the country's debt would show further increase.


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[CENTER][B] [SIZE="4"]Government urged to curtail non-development expenditures [/SIZE][/CENTER]
MUHAMMAD SALEEM


LAHORE (December 03 2009)[/B]

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.


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[B][CENTER][SIZE="4"]Industrialists reject increase in POL prices [/SIZE][/CENTER]

RECORDER REPORT
KARACHI (December 03 2009)[/B]

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.


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[SIZE="4"][B][CENTER]Activity at Karachi and Qasim ports [/CENTER][/SIZE]

RECORDER REPORT
KARACHI (December 03 2009)[/B]

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.


[B][CENTER]PORT QASIM[/CENTER][/B]
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.


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[COLOR="Blue"] National Savings Bonds attract Rs3.6 billion[/COLOR]

By Dilawar

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.

[url]http://epaper.dawn.com[/url] 28-01-2010

[CENTER][B][SIZE="3"][B]Economic development: EU agrees to step up dedicated dialogue [/B][/SIZE]
SEHRISH WASIF [/CENTER]

ISLAMABAD (February 19 2010)[/B]

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.

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[B]
[CENTER][SIZE="3"]Punjab Privatisation Bill 2010 passed [/SIZE][/CENTER]JALIL HASSAN AKHTAR [/B]
[B]LAHORE (February 19 2010)[/B]

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 9:00 am.


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[B][CENTER][SIZE="3"]'Muslim countries should join hands for economic development' [/SIZE][/CENTER]RECORDER REPORT

LAHORE (February 19 2010)[/B]


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.


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[B][CENTER][SIZE="4"]South Asian nations sign trade, environmental accords[/SIZE][/CENTER][/B]

[B]THIMPHU (April 30 2010)[/B]

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.


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Leaders for taking full advantage of Saarc Development Fund [/SIZE][/CENTER][/B]

[B]RECORDER REPORT
THIMPHU (April 30 2010)[/B]

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.


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[B][CENTER][SIZE="4"]More industrial estates can be developed: Minister [/SIZE][/CENTER][/B][B]RECORDER REPORT

KARACHI (April 30 2010)[/B]
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.

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[SIZE="4"][SIZE="5"][CENTER][COLOR="Black"][B]Unprecedented devastation By Khaleeq Kiani [/B][/COLOR][/CENTER][/SIZE][/SIZE]


[B][FONT="Palatino Linotype"][SIZE="3"]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. [/SIZE][/FONT][/B]

[CENTER][B][SIZE="3"]Impact of floods on exports: MoC yet to start assessment [/SIZE]
MUSHTAQ GHUMMAN [/B][/CENTER]

[B]ISLAMABAD (August 18 2010)[/B]
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.


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[CENTER][B]Sindh government's Rs 2 billion Ramazan Package: poor masses still deprived of facility [/SIZE]
AFTAB CHANNA [/B][/CENTER]
[B]KARACHI (August 18 2010):[/B] 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.

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[CENTER][SIZE="3"]July current account deficit amounts to $635 milli[/SIZE]on
RECORDER REPORT [/B][/CENTER]
[B]
KARACHI (August 18 2010)[/B]

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.


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Sovereignty and taxation
 

[B]Sovereignty and taxation[/B]

[COLOR="Blue"]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.[/COLOR]

[B][I]By S. Akbar Zaidi[/I][/B]


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.

Sindh presents Rs882m surplus, tax-free budget
 

[B][SIZE="4"]Sindh presents Rs882m surplus, tax-free budget[/SIZE][/B]

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.



[I]copyright: [url]http://e.thenews.com.pk/6-11-2011/page1.asp#;[/url][/I]

world bank
 

World bank
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.

Circular debt
 

CIRCULAR DEBT

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. ¦