Pakistan Economy: News & Discussion

Pintu

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Associated Press Of Pakistan ( Pakistan's Premier NEWS Agency ) - Govt determined to keep developing oil, gas sector: President

Govt determined to keep developing oil, gas sector: President



ISLAMABAD, Nov 13 (APP): President Asif Ali Zardari on Friday said that Government is determined to keep upgrading and developing oil and gas sector in the country.He was talking to a delegation of MOL Group headed by its CEO Gy”rgy Mosonyi, which called on him at the President House.The President said that Government is taking keen interest in creating opportunities for private investment in the country especially in the sectors that have direct bearings on the social uplift of the people.The President congratulated the MOL group on inauguration of Manzalai Central Processing Facility in Karak.

Gy”rgy Mosonyi thanked the President for meeting the delegation and said that Pakistan is one of their core focus areas for exploration activities.

He also thanked the federal and the provincial governments for the support being extended to their organization.
 

Pintu

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DAWN.COM | Business | MOL begins supply from Manzalai field

MOL begins supply from Manzalai field

By A Reporter
Thursday, 12 Nov, 2009


Workers inspect a gas pipeline.— Photo from AP/File

ISLAMABAD: MOL Pakistan, the operator of the Tal block in NWFP, on Wednesday announced that it had started supply of 250 million cubic feet per day (mmcfd) gas and 4,280 barrels crude oil per day from the Manzalai field.



MOL Group Gyorgy Mosonyi addressing a press conference said that gas supplies from the Manzalai field had started to Sui Northern Gas Pipelines Limited. ‘Gas production from the field will reach 300 mmcfd by 2013,’ he added.

Manzalai field is located in Karak and Hangu districts of the NWFP.



He said that Pakistan was among the top five key operational centres of MOL, the Netherlands based Hungarian oil and gas giant.



Mr Mosonyi told media that Tal block was a joint venture of five oil and gas exploration companies.



He said that Petroleum Concession Agreement (PCA) of Tal block was signed in February 1999 as an exploration block.



Prior to MOL Amoco and the OGDCL failed to make any discovery in the Tal block and they abandoned it.



According to the PCA, MOL Pakistan became the operator of the block with 35 per cent shares in Tal block, the other joint venture partners are OGDCL with 30 per cent shares, Pakistan Petroleum Limited (PPL) with 30 per cent and Government Holdings Private Limited (GHPL) with 5 per cent shares.
 

ppgj

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PAKISTAN: Economic Outlook and Priorities in 2009 - What and How?

Paper no. 3519 25-Nov-2009

PAKISTAN: Economic Outlook and Priorities in 2009 - What and How?

Guest column by Aneel Salman

(The views expressed by the author are his own)

Eliana Cardoso’s Chief Economist for the South Asia Region at the World Bank shows optimism about South Asia’s rebound from the financial crisis. South Asia’s economic growth retarded from 8.6% in 2007 to 5.6% in 2009. This was the smallest growth decline among all regions of the world and it is expected the region will be back on track with approximately 7 percent per annum on average by 2010-2011. Dipak Dasgupta, Lead Economist at World Bank points out that Pakistan, Nepal, Sri Lanka and Afghanistan face difficult and different situations from other South Asian countries. Apart from two major economic issues--food price inflation and fiscal imbalances they are facing bitter conflicts.

Pakistan, a fragile economy, has been facing both economic and political crisis which predate the global financial crisis. Inflation, trade deficit, balance of payment, foreign exchange reserves, circular debt, poor performance of the banking sector and Karachi Stock Exchange and political instability have remained the key indicators of Pakistan’s economic crisis. Political and economic stability complement each other, Pakistan is an interesting case since both are in crisis. Even though it’s democratic, there is still a strong rift between its army and the civil government. The war on terror has become a hanging sword-- the rate of suicide bombing increasing alarmingly.

The GDP growth rate is a significant indicator to assess the health of an economy, in case of Pakistan it has been retarding since 2004-05 (= 9.0) to (= 2.0) in 2008-09. Government of Pakistan spends $26 billion per year based on the expected revenues of $ 20 billion incurring a huge budget deficit. Last year it suffered huge Balance of Payment (BOP) crisis when the entire donor community was also going through financial collapse. IMF aided with $7.6 billion and with the first tranche of $3.1 billion Pakistan foreign reserve rose from $ 6 billion to $ 9 billion. There has been 2.6 percent negative growth of exports, declining from $ 16.4 billion last year to $ 16.0 billion in July-April 2008-09. Imports also showed a negative growth of 9.8 percent in July-April 2009. Imports stood at $26.77 billion as against $28.715 billion in the comparable period of last year.

Increasing import bills compared to exports has increased the current account deficit with a significant depletion in State Bank of Pakistan’s foreign exchange reserves which enhanced the country’s default risk. Given the unsafe investment climate and security situation the foreign direct investment inflows fell by 21.4 percent from July-November 2008 against a 9.8 percent decline in the same period of year before. Pakistan’s total external debt has increased from US$ 46.3 billion at end-June 2008 to US$ 50.1 billion by end-March 2009. The total investment has declined from 22.5 percent of GDP in 2006-07 to 19.7 percent of GDP in 2008-09. The national savings rate has declined to 14.4 percent of GDP in 2008-09 as against 13.5 percent of GDP last year. The core inflation which represents the rate of increase in cost of goods and services excluding food and energy prices also went up from 7.1 percent to 18.0 percent. The overall foreign investment during the first ten months (July-April) of the current fiscal year has declined by 42.7 percent and stood at $ 2.2 billion as against $3.9 billion in the comparable period of last year. (Source: Economic Survey of Pakistan, 2008-09 Finance Division, Government of Pakistan)

Pakistan’s banking sector has shown resilience to the weak macroeconomic environment even though it experienced a drop down in deposits. Circular debt is another critical issue which is still a potential indicator of the economic problem. The Government of Pakistan is unable to pay billions of rupees to Oil Marketing Companies (OMCs) and Independent Power Producers (IPPs). The long hour power failures have not only affected the common public, but shut down many businesses.

There is a general consensus among Pakistani economists; the 2008 financial crisis has not affected Pakistan with a huge blow, the country has seen some worse situations but still survived. The economic conditions were never promising given the corruption, short term policies and political instability. Given the diversity and seriousness of problems Pakistan should work on strict time lines. Short term policies deal with terrorism and debt, medium term policies deals with energy crisis, Foreign Direct Investment (FDI), and water management. Higher education, regional integration and defense budget reduction should be the long-term objectives of Pakistan.

Time lines and Priorities

Short-term

In order to avoid a major economic crisis, Pakistan government should solve two top urgent problems, war on terror and heavy debt burden.

Terrorism

War on terror cost Pakistan $6 billion economic losses during 2007-08 and $10 billion losses during 2008-09. In July 2009, Shah Mahmood Qureshi, Foreign Minister claimed that the war on terror already cost Pakistan $35 billion. The insurgency resulted in massive capital flight from Pakistan to the Gulf. The whole country is paying a heavy price for its social instability. Without social stability, everything is just paper talk. Government of Pakistan needs to quell the intifada and eliminate terrorism. There is still time and we need to re-assess our plans and strategies. Economic and diplomatic tools need to be utilized along with military force against Talibans. The series of terrorist attacks have left little option for the Government except for an army offensive against the militants in South Waziristan. The operation is having spillover effects-terrorist attacks in the urban hubs of Pakistan. As our soldiers head into this “waster land” the Government needs to monitor the movements of local Islamic groups, increase their secret information networks and take proactive counter terrorism measures. One way to END this war is to block the supply chain of Taliban and reach the source which is sponsoring this terrorism. Without financial resources no terrorist can implement any plan. There need to be strictly control and monitor the financial flows sponsoring these activities.

Debt

Debt is another chronic ailment for Pakistan. Circular debt problem has arisen and is seriously impacting the operations of Pakistan’s whole energy value chain. Current account deficits, getting new loans to pay old debts, defense expenditure and non developmental expenditures has put the country in economic crisis. An effective method for debt relief is transparency and restructuring of tax system. Pakistan lost $10 billion on tax evasion in 2008. If there is improvement in tax collection, it will greatly offset the national debt and deficit.

Medium-term

Medium term policies for Pakistan deals with energy, Foreign Direct Investment (FDI), and water security.

Energy Crisis

For past few years, Pakistan is facing unprecedented energy crisis. There is a shortage of about 3,500 Megawatt (MW) in electric power. The energy consumption of Pakistan’s per capita is only 15 MMBtu, as compared to the world Average of 68 MMBtu. It is essential for Pakistan to increase its per capita energy availability and consumption to at least 50% of the world level to about 35 MMBtu in the medium term (2012- 2020). To meet the growing demand of energy and the target of 9700 MW generation by the year 2030, of the Government should speed up work on alternative sources of energy which are (i) Mega Wind Power Projects, (ii) Biodiesel, (iii) Bio Gas Projects, and (iv) Small Hydro projects. The Government needs to focus on green energy initiatives and energy saving technologies. It should hold itself accountable in making payments to IPPs, and encourage solar energy panels for houses and businesses.

Foreign Direct Investment (FDI)

Foreign direct investment in Pakistan showed more resilience and stood at $3205.4 million during the first ten months of the 2008 fiscal year as compared to $3719.1 million in the same period in 2007, therefore showing a decline of 13.8 percent. To address this issue, mid-term policy should focus on the security situation and offer competitive environment to investors. Pakistan can become a lucrative parking place for foreign companies given its growth potential. Tax incentives and reduction in tariffs should be offered to foreign companies as this will not only increase the industrial base of the country, but also increase the employment opportunities and develop human capital.

Water Security

Water management is a critical issue for Pakistan’s development challenges. Food security, energy production, economic growth, human health- water is the nexus. Pakistan is under water stress, since 1950s, water availability has dropped from 5,000 m³ to 1,500 m³ per capita and is expected to become “water scarce” (below 1,000 m³ per capita) by year 2035. Water supply and sanitation projects are no more taken as priority even though there is more awareness. Major international institutions like OECD, World Bank etc have reduced their development assistance in this area. Given the complex problems like inter and intra water conflicts among provinces/ India, reduction in water table and climate change, Government of Pakistan need to think of sustainable solutions for water management. Solutions need to be developed keeping in mind the ecological, social and economic costs. Adopting both hard and soft path solution is the way to go. Hard path solution- A comprehensive strategy is required to come out of this crisis. Investments in the sea water desalinization, state-of-the-art water-saving / purify technology are required. Kala Bagh dam needs to be built to solve the energy crisis and water-conserving infrastructure available for agriculture. Soft Path solution is a well planned, centralized managed system with small decentralized facilities. It’s a need based approach, focused on quality rather than quantity. It improves the productivity of water by a built in conservation system and using water as per requirement. Better water resources management is the strategic "threat minimiser" in adapting to climate change, a global threat.

Long-term

Higher education, regional integration and defense budget reduction should be the long-term objectives of Pakistan.

Higher Education

Pakistan has tremendous potential in the field of higher education. Intelligent and strategic investments could translate into a thriving economy, mainly driven by the service sector. Government of Pakistan (GoP) initiated a plan in 2002 to improve the higher education with the aim of transforming the economy into a knowledge-based economy. Since then there has been a twenty four percent increase in the higher education budget and sixty percent increase in the science and technology budget. This has begun to show some positive changes, including an annual growth of 60% in the software industry. Pakistan is a neighboring country of China and India, both top outsourcing destinations and thus advantages due to auspicious geographic location could be leveraged. Nevertheless the GoP has to show more commitment in these sectors. Merely making fiscal investments and lack of a clear policy and political support could derail the whole process.

Regional Integration/Defense Budget Reduction

Total spending on education in 2009-2010 budget is 0.8% whereas defense spending consumes 12%. Uneven distribution of budget in development and non development sectors does not guarantee long term economic stability. The economic priorities need to be reassessed.

Regional integration is a secret recipe for the reduction in defense budget. Trading blocks needs to be developed and the maxim “Trade not Aid” should be the new motto. Global work force is developed with this policy which assures economic sustainability. Given the current situation we do not expect miracles but strong diplomatic relations with India and China guarantee national security, equitable distribution of budget spending on other sectors and positive TOT and BOP.

(Aneel Salman, an academic, based in New York, USA. The author would like to thank Sarah Siddiq, Atif Majeed, Yue Zou and Ming-Chin Chung for their inputs and comments.)

PAKISTAN: Economic Outlook and Priorities in 2009 - What and How?
 

Vladimir79

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Pakistan’s cry for water
by: Sanjeev Miglani


Pakistan is running out of water so fast that the shortage will strangulate all water-based economic activity by 2015, a Pakistani thinktank says. And that pretty much covers 70 percent of the population who are involved in farming.

This is not a new warning. In recent months, as this blog itself has noted, experts have painted an increasingly bleak scenario of Pakistan’s rivers drying up, the ground water polluted and over-exploited and the whole water infrastructure in a shambles.

But Pakistan, as the Islamabad-based Centre for Research and Security Studies says, is not listening. Pakistan has gone from a “water scarce” country to a “water-stressed” country, worse than Ethiopia, the Centre says quoting a 2006 World Bank study. In 10 years time, it will become a water-famine country.

Among the 25 most populous countries, South Africa, Egypt and Pakistan are the most water-limited nations, that study said.

According to the World Bank data, Pakistan only stores 30 days of river water, India stores 120 days, while the Colorado river system in the U.S. has storage capacity of up to 900 days of water usage.

The depletion of water resources is unchecked, as the 2009 UN World Water Development Report points out. It says that the total actual renewable water resources in Pakistan decreased from 2,961 cubic metres per capita in 2000 to 1,420 cubic metres in 2005. A more recent study indicates an available supply of water of little more than 1,000 cubic metres per person.

India and China are not far behind in this plunder of water, with only 1,600 and 2100 cubic metres per person per year. Which as the South Asia Investor Review points out is itself cause for serious concern, as it raises the spectre of wars over water in the future.

Just to put the numbers in relation to that for the rest of the world, major European countries have up to twice as much renewable water resources per capita, ranging from 2,300 (Germany) to 3,000 (France) cubic metres per person per year.

The United States, on the other hand, has far greater renewable water resources than China, India or major European countries: 9,800 cubic meters per person per year. By far the largest renewable water resources are reported from Brazil and the Russian Federation - with 31,900 and 42,500 cubic meters per person per year.

How did it get here? Pakistan is one of the world’s most arid countries, with an average rainfall of under 240 mm a year as this detailed backgrounder in Pakistan’s Daily Times points out.

The population and the economy are heavily dependent on an annual influx into the Indus river system (including the Indus, Jhelum, Chenab, Ravi, Beas and Sutlej rivers) of about 180 billion cubic meters of water, that emanates from India and is mostly derived from snow-melt in the Himalayas.

But this single river system on which Pakistan almost entirely relies has been heavily harvested and there is no additional water to be injected into system.

Paksitan needs to conserve its water, use it more wisely and set up new reservoirs on an urgent basis, the South Asia Investor says. Or else the threat posed to the nation’s stability by the battle for water may yet turn out be just as serious as the militants trying to take control.



[Photographs of dried up lake in Islamabad and a well in Baluchistan]

Pakistan: Now or Never? Blog Archive Pakistan’s cry for water | Blogs |
 

RPK

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AFP: Inflation fuels Pakistan dissatisfaction with govt

RAWALPINDI, Pakistan — Pakistan's middle classes are increasingly being squeezed by price hikes, fuelling dissatisfaction with an unstable government that is struggling to contain Taliban attacks.

In a country with huge disparity in wealth, life has always been a struggle for the third of the population that lives below the poverty line but now lower-middle class and professional families find it increasingly difficult to make ends meet.

The rupee has depreciated by 35 percent in the last year while electricity, gas and petrol prices have doubled in the last two.

The country faces a crippling energy crisis, producing only 80 percent of its power needs, causing debilitating blackouts and suffocating industry.

Price hikes and shortages of essential items such as sugar and flour complicate housekeeping and exacerbate the rock-bottom unpopularity of President Asif Ali Zardari, head of the Pakistan People's Party (PPP).

"Our dreams that the PPP would improve the economy have been shattered," said Mohammed Sajjad, manager of a restaurant in the teeming city of Rawalpindi outside the capital Islamabad.

It was lunch time, but cooks and waiters were sitting idle. The restaurant was empty.

"People don't go out now. They are gripped by the twin dilemma of high prices and suicide blasts," said Sajjad.

"My monthly salary of 10,000 rupees (120 dollars) is hardly sufficient for rent and groceries," added Sajjad, sole breadwinner for his elderly parents, a sister at school and a brother.

Rawalpindi is one of the most political cities in Pakistan, split into die-hard camps who support either the PPP or its rival Pakistan Muslim League-N.

The city is home to the military, which has ruled Pakistan for more than half the country's existence. Zardari replaced General Pervez Musharraf last year after his party won general elections.

"If we compare prices, the non-elected government of General Pervez Musharraf was much better. Sugar was available for 25 rupees (30 US cents) a kilogram and electricity was cheaper," said Sajjad.

"Now you risk your job by taking time off work to buy sugar for 45 rupees at controlled sale points while the electricity bill has increased by up to 100 percent."

Dissatisfaction is mounting against Zardari, popularly known as "Mr Ten Percent" because of past corruption convictions and a reputation for taking kickbacks on deals.

Public sympathy over the 2007 killing of his wife, ex-prime minister Benazir Bhutto, has largely evaporated.

The military, which is fighting Taliban and Al-Qaeda-linked militants whose bomb attacks have killed more than 2,550 people in the last 29 months, is also said to be fed up with the president.

An amnesty on corruption allegations expired Saturday, which could see cases revived against cabinet ministers and party officials, as well as Zardari himself.

"I just want to ask Asif Zardari -- where is the aid money he got from foreign countries to improve our living standards?," said Sikandar Ali, a 38-year-old gift shop salesman.

In April, international donors promised Pakistan 5.7 billion dollars over two years but only a fraction of the funds has arrived.

"I haven't been able to pay my children's school fees for the last four months. Will Mr Zardari tell the nation 'what is the limit of his corruption and price hikes?'" said Ali.

Pakistan has had to negotiate a standby loan of 11.3 billion dollars from the International Monetary Fund to help weather inflation that hit a 30-year high last year.

The central bank on Tuesday lowered its benchmark interest rate to 12.5 percent from 13 percent as inflation has declined to 10.2 percent.

However, independent economist A.B. Shahid said official statistics were based on government-controlled prices, available at limited outlets, while the vast majority of the population buy commodities for far more in the markets.

Imtiaz Gul, chairman of the Centre for Research and Security Studies, said rupee devaluation and price hikes discredited the government, but economic malaise was not enough to bring down the administration.

"It will lose credibility and popularity but... inflation and unemployment in Pakistan don't determine the future of the government," he told AFP.

"There are multiple factors which change the government -- the military establishment is the predominant factor which can change the government or the course of government."
 

ajtr

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At the edge of an abyss


Pakistan's current economic situation calls for a fundamental change in the way the economy has been managed over the last couple of decades. Much has been said and written about the mistakes made by Islamabad's policymakers during that period.

Relatively little has been suggested about the way the economy should be pulled back from the edge of the abyss where it stands today.

Unless the government takes stock of the current situation and carefully assesses the future, there is a real possibility that we will fall behind all the countries in the region if not into the abyss itself. There is also considerable danger of social chaos if the situation people face is not urgently addressed. Thanks to an open and aggressive media, people are becoming increasingly aware of their predicament in a regional context.

That Pakistan is the South Asian 'sick man' today was underscored by a report released to the public by the World Bank on the eve of the institution's spring meetings held in Washington a couple of weeks ago. The Pakistani delegation to the meeting was led by the new de facto finance minister, Dr Hafeez Sheikh. According to the report all South Asian economies with, the exception of Pakistan and Afghanistan, have pulled out of the partial slowdown caused by the Great Recession of 2008-09. Even Nepal, which has had its share of economic and political problems, is expected to do better than Pakistan in terms of economic expansion.

In the World Bank Global Monitoring Report 2010, South Asia's GDP growth rate is expected to increase to seven per cent in 2010 and 7.4 per cent in 2011. India will lead the way in this resurgence followed by Bangladesh. India's projected performance is particularly impressive. It will approach a GDP growth rate of nine per cent which means an increase of 7.5 per cent in the country's per capita income. Even some of the laggard states in India are being pulled out of economic stagnation and are joining those that are performing well. Bihar, for instance, will see its economy grow by 11 per cent in 2010. It has been the slowest growing state in the Indian Union and also the poorest.

A number of factors will contribute to the pick-up in India. The most remarkable of them will be the steady increase in the domestic savings rate which will draw close to 40 per cent of GDP, the level achieved by fast-growing economies such as China. This makes India considerably less dependent on external capital than Pakistan. India will also benefit from the pick-up in international trade. Unlike its previous record, exports will become more diversified with manufacturing joining services as the sectors responsible for growth.

In the past India's IT sector had pulled the rest of the economy towards modernisation. Now manufacturing has become another area of dynamism. The source of the impressive performance of manufacturing in international trade will be based on exports that make use of some extraordinary technological developments. A small motor car brought to the market by Tata Motors is one example of this development. Called the Nano, it is designed entirely by Indian engineers, uses mostly Indian materials and inputs and is meant to be driven on the country's depleted roads. The car is expected to do well in other parts of the world that have a growing demand for cheap and sturdy models. Nano sells for only $3,000.

India will also continue to develop new markets for exports. China has emerged as the country's largest trading partner, buying mostly commodities of which India has abundant supplies, China, becoming increasingly dependent on material inputs for feeding its expanding industry, is turning to India for such important inputs as coal and iron ore. The point of making these observations about this happy economic situation in India is to emphasise the important role the state can play in helping the economy to grow and for people to enjoy the fruits of development. India may have been in a more advantageous position when it, together with Pakistan, acquired independence from the British in 1947. But through the use of disciplined state action in the 1960s, Pakistan brought itself to India's level. Not only did it close the income gap with India, for about a decade and a half, it was treated as a model of economic success. That, of course, is no longer the case.

At that time India was labouring under what was called the Hindu rate of growth, above three per cent per annum. Pakistan at that point was growing at a rate twice as high: six per cent a year. Even then Pakistan had a higher rate of population growth. In spite of that its per capita income increased at a rate 75 per cent higher than that of its neighbour. Pakistan then overtook India as South Asia's most prosperous economy.

If we were to search for the one reason why the country has been standing at the edge of a social and economic abyss, it will have to be the failure of the establishment to provide what is loosely described as 'good governance'. By good governance is meant a number of different things; effectiveness of the various parts of the administration to provide for people's varied needs; effectiveness, also, of the legal system and the judiciary to provide speedy justice to the people in civil and criminal matters; and reducing the level and incidence of corruption.

Without moves such as these Pakistan will not be able to pull back from the edge of the abyss where it stands today. The passage of the 18th Amendment has set the stage for bringing about improvement in this context. One can only hope that the opportunity that has become available will not be lost as several others were missed in the past. If policymakers continue to dither, the consequences may be too grim to contemplate.
 

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Cotton May Be New Dispute for India, Pakistan

Cotton May Be New Dispute for India, Pakistan

Pakistan is fighting back after India banned raw cotton exports last month, creating a new bone of contention in an already frosty relationship.

New Delhi says it imposed the ban to ensure its own garment and textile industry has adequate supplies after a poor global harvest of raw cotton, especially in China and the U.S.


A farmer rests on sacks of cotton at a market in southern India.

"It's a slap on the face of free trade in the global economy," said Mohsin Ayub Mirza, a textile manufacturer in Karachi and chairman of the Pakistan Readymade Garments Manufacturers & Exporters Association.

Pakistan argues that India should honor contracts for 200,000 cotton bales for which letters of credit have already been issued, says Ikhtiar Baig, a Karachi-based garment producer and federal adviser to the government on the textile industry.

"Pakistan is against India's ban on cotton exports," Mr. Baig added.

India, like the U.S., is an important exporter of raw cotton. Pakistan and China, despite producing large amounts of cotton, are among the biggest importers because of their large yarn spinning and garment industries.

The two governments are discussing the issue. Separately, in a step forward on Tuesday, both countries said that their foreign ministers will meet in Islamabad in July.

Pakistani garment and textile producers admit they are facing much bigger problems than India's ban alone. The U.S. Department of Agriculture expects cotton mills to consume 115.9 million cotton bales this year while production will only be 102.9 million bales. Local yarn producers have taken advantage of global cotton shortages to sell their products at high prices in China.

That has exacerbated shortages of yarn in the local market, forcing some textile and garment businesses to shut down and putting people out of work. Yarn prices are up almost 100%.

Tens of thousands of people took to the streets in Karachi and Faisalabad on Tuesday to call for an immediate ban on yarn exports. While peaceful for now, the protests risk further destabilizing India's neighbor.

But political and business tensions between India and Pakistan don't appear to be affecting cultural relations. Pakistanis love Bollywood and an Indian film star was chosen as the face of this year's summer collection of one of Pakistans leading cloth producers — Faisalabad-based Firdous Textile — although some wonder whether marketing in Pakistan should be using home-grown talent.

http://blogs.wsj.com/indiarealtime/2010/05/12/cotton-may-be-new-area-of-dispute-for-india-pakistan/
 

nandu

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Pakistan raises defence budget to $5.2 bn

Pakistan raises defence budget to $5.2 bn

June 5th, 2010

ISLAMABAD - Pakistan increased its annual spending on defence to $5.2 billion (Rs.442 billion) as the government presented its budget Saturday with an outlay of Rs.2.764 trillion for the 2010-11 fiscal starting July 1.

The allocation for defence is Rs.442 billion, which is higher by Rs.100 billion and Rs.64 billion respectively against the current year's and revised budget estimates, Online news agency reported.

The government presented its deficit budget with total outlay of Rs 2.764 trillion which is higher by 12.3 percent as compared to the current fiscal .

The budget has estimated country's current resources at Rs.2.598 trillion for the next financial year, while the estimate under this head was Rs.2.299 trillion for the current financial year.

The total expenditure for the next financial year has been estimated at Rs 2.764 trillion. While Rs.1.998 trillion has been earmarked for current expenses, Rs.787 billion has been allocated for developmental expenses.

The developmental expenditure is 25.3 percent higher than the revised estimate for the outgoing fiscal.

Other allocations include Rs.7.28 billion for health, Rs.66.89 billion for economic affairs, Rs.448 million for environment protection and Rs.34.50 billion for education.

The budget has projected revenue collection from domestic resources at Rs.2.410 trillion during the next financial year, 20.1 percent higher than the current year's estimate.

http://blog.taragana.com/business/2010/06/05/pakistan-raises-defence-budget-to-52-bn-68024/
 

Known_Unknown

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Other allocations include Rs.7.28 billion for health, Rs.66.89 billion for economic affairs, Rs.448 million for environment protection and Rs.34.50 billion for education.
And Rs 442 billion for defence? Not only do they spend 4 times more on "defence" (I'd rather call it "attack") than they do on health, education and economic affairs combined, but they spend even more on "environment protection"?


No wonder that country is going down the crapper......=xD
 

A.V.

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the problem is not how much pakistan is spending the problem is when they go crying everywhere saying india is starting an arms race and investing huge in military its high time that both the countries understand what independent policies mean
 

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What a princely sum I would say given the global context and also in the context of it always trying to gain parity with india. But they are clever too. They don't need a big defense budget as a 5 billion budget is supplemented by a few billions in aid and grants. All they have to do is keep the mullahs happy who will spread terror. That will keep the west keeping their purse open
 

hit&run

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http://www.asianews.it/news-en/Christian-medical-centre-helping-Muslims-and-Pakistan%E2%80%99s-poor-16416.html
The list of grim statistics does not end there. Pakistan's defence budget last year came to US$ 3.45 billion, and is expected to reach $3.65 billion next year. Public spending in health care stood at under US$ 150 million this year. The government says it plans a 56 per cent increase next year, bringing the budget to $300 million. However, without international humanitarian agencies, Pakistan's health care system would simply collapse.
2010-2011:Rs.18800 million for Health this year
2009-2010:Rs 23150 million for health last year

Am i missing some thing? Please correct me if i am worng significant decrease in health budget as comare to last year.
 

satyam

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Pakistan to seek $19bn loans, grants in 3 yrs

Pakistan is to negotiate loans and grants of $19 billion, comprising $14 billion loans and $5 billion grants, with multilateral and bilateral development partners during next three years 2010-13, according to the projections contained in the Medium term Budgetary Framework (MTBF) released by Ministry of Finance.

http://www.dailytimes.com.pk/default.asp?page=2010/06/09/story_9-6-2010_pg5_1


Financial fundamentals followed by the Islamic Republic of Pakistan; for every dollar of debt to be repaid try and borrow two:
 

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Transit of exports to India via Wahgah: Kabul sets condition for signing deal?


KABUL (July 11 2010): Afghanistan expects to sign a trade agreement with Pakistan this month in a move which could boost stability, but only if its neighbour drops opposition to transit traffic with India, business leaders said on Saturday.

A long deadlock over Afghan demands for transit of exports to India via Pakistan through the sensitive Wagah land route was close to ending, clearing the way for Afghanistan-Pakistan Transit Trade Agreement (APTTA) within weeks, Afghanistan Chamber of Commerce director Abdul Qadir Bahman told Reuters.

"It is not yet certain, but we have very strong hopes differences have been overcome," Bahman said. Bahman said both sides would hold an eighth round of talks before an international conference in Kabul later this month in which donor countries and Karzai's government will try to chart a path forward for the conflict-torn country. "The main point is access to the sea for exports to India," he said, promising a deal would also help combat the current thriving blackmarket trade between the two countries.

"If we sign this agreement, it will decrease that because we will have found a way for everyone to carry out business without any problems," Bahman said. Transit to Afghanistan through Pakistan is currently governed by the 1965 Afghan Transit Trade Agreement which specifies ports, routes, transport and customs transit procedures.

Both Afghanistan and Pakistan have agreed on the need for a new agreement to give Afghanistan sea access and provide Pakistan with direct routes to Central Asia. But Pakistan says Afghanistan is refusing to agree to customs duty on Afghan cargo in Karachi and other measures to combat illegal smuggling such as compulsory licencing, bank credit guarantees and quarantine restrictions Fifty percent of Afghanistan's trade is with its five neighbours Pakistan, Iran, Tajikistan, Turkmenistan and Uzbekistan. Trade between Afghanistan and Pakistan is worth more than $1 billion.
 

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Port Grand opening next month: visitors to pay Rs 200 each for entry to food resort


ISMAIL DILAWAR
KARACHI (July 11 2010): The long-awaited opening of the Asia's biggest food and entertainment resort, Port Grand would be carried out in the mid of next month. "In the first phase the soft opening would be undertaken in mid August," Farooq Hassan, Vice President of Port Grand, told Business Recorder in an interview conducted on Saturday at the scenic site.

Grand Leisure Corporation (GLC) is constructing the Karachi Port Trust's mega project at the 13-acre scenic coastal stretch of Karachi Port ranging from Native Jetty Bridge to M.A Jinnah Bridge roundabout at a cost of over Rs 1 billion on Built-Operate-Transfer basis for 21 years.

Management of the well-known Food Street expects a huge crowd of 10,000 local and foreign visitors in a single day at the under-construction resort, which is first of its kind in the country. "Within a few months of the soft opening we would have influx of people but for a full-fledged operation we hope that around 10,000 people to visit the resort in a day," the vice president said. This figure, Hassan said, was for a normal day while for weekends his management was expecting the number of visitors to range between 15,000 to 17,000.

He said that the management had decided to set entry fee for the Port Grand at Rs 200 per head, out of which the visitor would be allowed to do a hundred rupees' shopping. That means the effective rate of entry in Port Grand is to be Rs 100. "This is to ensure that sober and decent people enter the resort because this is a place where we would like to welcome all families and professionals," the soft-spoken deputy chief added. About security, he said there would be security cameras installed throughout the resort to snap the wrongdoers, if any. "We would keep the photos in record and would not allow entry to a miscreant next time," Hassan said. To a query on feasibility of the 1867-built bridge, Hassan said the government was tending to lay down the outdated bridge, but the Port Grand management reclaimed it and renovated it in a way that sky rocketed original cost of the project, Rs 200 million, to over Rs 1 billion.
 

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Pak Steel to get another Rs22 bn: Syed Khursheed Shah


Monday, 12 Jul, 2010


Pakistan Steel has given a lot to the nation. We should not hesitate to provide funds, if needed, for its revival and strength, the Minister asserted. — File Photo

KARACHI: Federal Minister for Labour and Manpower Syed Khursheed Ahmed Shah said on Monday that the government was determined to revive and expand Pakistan Steel, and strongly rejected the impression that the Mill would be privatized.

The Minister was addressing Pakistan Steel workers at the oath-taking ceremony of newly elected office bearers of Pakistan Steel Peoples Workers' Union within the premises of the Mills.

Central Secretary General of PPP Senator Jahangir Badar, Advisor to the Sindh Chief Minister Rashid Rabbani, Special Assistant to the CM Syed Waqar Mehdi, President PPP Karachi Syed Najmi Alam, General Secretary PPP Karachi Saeed Ghani, Secretary General of Labour Bureau Pakistan and former Sindh labour minister Khawaja Muhammad Awan, Acting CEO of Pakistan Steel Imtiaz Ahmed Lodhi besides officials of the Peoples Union (CBA) were present.

The Federal Minister said Steel Mill has a great potential to grow. It has never been a burden on the national exchequer. Not a single penny has ever been given to it as subsidy.

This project was completed at a total cost of Rs25 billion and it has so far returned to the national exchequer more than Rs97 billion in the shape of duties and taxes.

It has retired entire previous loans and is capable enough to re-pay the new loan of Rs25 billion recently approved by Prime Minister Syed Yousuf Raza Gilani under "Pakistan Steel Bail Out Package." The PSM has already got Rs3 billion as part of this package.

Pakistan Steel has given a lot to the nation. We should not hesitate to provide funds, if needed, for its revival and strength, the Minister asserted.

Like steel mills in other countries, Pakistan Steel suffered heavy financial losses as side effects of global economic recession and turmoil in the steel industry.

However, he said, the skilled, hardworking and committed workers of Pakistan Steel will turn this Mills around and the work on its expansion will also start soon to achieve its targeted production capacity of 3 million metric tons. This will make the PSM more competitive in local and international markets besides providing more employment.

President Asif Ali Zardari takes great interest in the revival and expansion of Pakistan Steel seeing it as Shaheed Zulfikar Ali Bhutto's gift to the nation.

Prime Minister Gilani is very much concerned about the progress of PSM. He said in 2006, conspiracies started to sell out Pakistan Steel at very low price. Shaheed Mohtarma Benazir Bhutto directed the party leaders to resist its privatisation.

Every institution is not for earning profits, she had remarked adding "My father had established Pakistan Steel to strengthen the infrastructure and economy of the country, and for socio-economic uplift of the masses by promoting down-stream/ engineering industry," Khursheed Shah quoted Benzair Bhutto.

He said Pakistan Peoples Party (PPP) is the only true representative of democracy in the country and has always worked for the betterment of the poor instead of guarding the interests of the rich.

He listed the steps taken by the present PPP government for the welfare of the workers including repeal of anti-workers laws introduced by last two governments and restoration of thousands of employees in different public sector organisations.

The PPP government has confirmed the services of a large number of employees. 4500 workers in PSM were also confirmed although it was a big challenge in the persisting financial crisis of the Mills.

We have also raised minimum wages of workers up to Rs7500 per month. Syed Khursheed Shah lauded the role of Pakistan Steel Peoples Workers Union (CBA) for the welfare of the workers and the Mills.


He also highlighted the reconciliation policy adopted by Shaheed Mohtarma Benazir Bhutto in the interest of the country and for strengthening of the democracy. PPP Co-Chairman and President Asif Ali Zardari continued the same policy and offered full cooperation to all major political parties/ groups for good of the country and the people.

The Federal Minister for Labour and Manpower, on this occasion, announced to set up C.T. scan and MRI facilities for PSM workers and their families from Workers Welfare Fund.

He also announced that around 4.2 million registered workers will now get their medical treatment even at Aga Khan Hospital, if needed.

Central Secretary General of PPP Senator Jehangir Badar said his party has always been struggling to ensure the respect and rights of workers.

Shaheed Zulfikar Ali Bhutto gave great importance to workers since the formation of PPP and strived for their uplift. The spirit behind nationalization of industries was to ensure a proactive role and involvement of workers in the national economy and in the development of the country.

He said the PPP with the support of the workers will protect Pakistan Steel from all kind of conspiracies.
 

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Thar coal priority source of power: Gilani


Monday, 12 Jul, 2010


Gilani directed all the concerned federal and provincial agencies to extend full required support for Thar coal projects and ensure timely availability of infrastructure at the site.


KARACHI: Prime Minister Syed Yousuf Raza Gilani has declared Thar coal as the priority source for power generation and of national importance.

Chairing a special meeting of the Sindh Cabinet, wherein he was updated on Thar coal projects at the Chief Minister House here on Monday, the Prime Minister said that Thar was the future of Pakistan.

Sindh Governor Dr. Ishratul Ibad Khan, chief minister Syed Qaim Ali Shah, federal ministers Rehman Malik, Raja Pervaiz Ashraf, Syed Naveed Qamar and members' sindh cabinet were also present on the occasion.

He directed all the concerned federal and provincial agencies to extend full required support for Thar coal projects and ensure timely availability of infrastructure at the site.

He directed the provincial government to have consultation with the federal finance minister with regards to allocation of funds in the current PSDP and also regarding project financing for the Sindh Government's Joint Venture Project.

Earlier, Secretary Coal and Energy Department and Managing Director Thar Coal and Energy Board (TCEB), Ajaz Ali Khan gave a briefing on Thar coal project.

The vision of Thar Coal and Energy Board (TCEB) was shared with the Cabinet which is to generate at least 10,000 megawatts of power from Thar coal by 2020, which will save $ 79 billion of foreign exchange on fuel replacement cost and would give benefit of Rs8 trillion to the national economy on account of reduced power generation cost.

MD TCEB along with SECMC Khalid Mansoor gave a detailed presentation to the Prime Minister and the Cabinet with regard to ongoing progress on Sindh-Engro JV Project and informed the participants that this is a flagship project of Sindh Government, and its design feasibility study will be completed next month.

It has entered a critical phase where availability of infrastructure has to match the project time-lines. Any delay will make project financing availability difficult. The Prime Minister assured his full support and appreciated the efforts of the Government of Sindh.
 

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'Chitral to be linked to China after construction of Chitral-Gilgit Road'


CHITRAL (July 13 2010): The government will link Chitral with time-tested friend China by constructing Chitral-Gilgit Road that would make the northern districts of Pakistan a hub of economic investment, said Federal Minister for Communication Arbab Alamgir Khan here on Monday.

He said Chitral-Gilgit Road and Lawari Tunnel will open up Khyber Pakhtunkhwa for investment and would give further impetus to development process in Chitral, Dir, Swat and Malakand Agency, Dr Alamgir Khan remarked.

Addressing a big public gathering at Chitral and Garm Chashma here after starting of his three days visit, he said the completion of these two mega projects will revolutionise the communications sector, enhance trade activities with Central Asian Republics and bring an industrial revolution in Khyber Pakhtunkhwa. The construction of tunnel will help establish strong road links with Central Asian States and hopefully it would be completed in 2011 at a cost of Rs 17.50 billion.
 

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