Pakistan Economy - News & Updates - Archive

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Merkel and UN envoy agree to increase aid to Pakistan

BERLIN (July 25 2007): The international community must increase support to Afghanistan's neighbours, including Pakistan, if peace efforts in the region are to succeed, the top UN envoy to Afghanistan said on Tuesday.

Special UN representative for Afghanistan Tom Koenigs told reporters after meeting German Chancellor Angela Merkel that international efforts aimed at stabilising Afghanistan would have to be expanded to embrace Pakistan.

"We will need additional support to end the threat, additional support for the entire region," Koenigs said after a meeting with Merkel and other top German officials.

"We see in Pakistan that stabilisation efforts have suffered setbacks. This means engagement in the entire region is necessary in order to ensure security, not only for Afghanistan but also in an international context." German Chancellor Angela Merkel agreed it was necessary to increase aid to Pakistan and surrounding countries.

"We need to look at our mission not in a limited way but rather to consider the entire region," Merkel said. However, she spoke only of boosting aid to help the region meet the United Nations' so-called "Millennium Goals" aimed at dramatically reducing poverty by 2015. The porous Pakistani border with Afghanistan snakes 2,500 km (1,500 miles) through rocky mountains and across deserts, and is considered a front line in the US-led war on terrorism.

Washington has accused Islamabad of not doing enough to stop Taliban fighters from crossing the border into Afghanistan. Pakistan rejects this, saying it is doing all it can but needs help from the West to monitor the borders and relocate refugees back inside Afghanistan.

Afghan militants seized two German engineers working on aid projects in Afghanistan last week. One of them died in captivity and the Foreign Ministry believes the other is alive. Merkel provided no new details about hostage situation.

http://www.brecorder.com/index.php?i...term=&supDate=

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ADB releases $200 mln for Pakistan quake survivors

ISLAMABAD: July 25, 2007: The Asian Development Bank (ADB) has released a $200 million loan to Pakistan to help rebuild homes for hundreds of thousands of people affected by the October 2005 earthquake, the bank said on Wednesday.

The amount was the first tranche of a $400 million concessional loan approved by its board of directors in June, the ADB said in a statement.

The second tranche of $200 million would be released in six months on completion of performance targets jointly agreed by the Pakistan government and the bank.

The ADB committed a total $1 billion in loans and grants during an international donor conference held in Islamabad in November 2005 for reconstruction and rehabilitation of quake-hit northern Pakistan.

The statement said the loan was intended to help Pakistan meet a dealine of May 2008 for completing reconstruction of 585,000 rural homes compliant with seismic safety requirements.

"The winter of 2007 will be the last for most displaced people before they move into new houses," said Peter Fedon, ADB's country director.

The October 8, 2005 earthquake killed more than 73,000 and made 3.5 million homeless in occupied Kashmir and North West Frontier Province.

Brecorder.com

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'FDI has created countless job opportunities'

LONDON (July 25 2007): Federal Commerce Minister Humayun Akhtar Khan said on Tuesday that a record $6.4 billion Foreign Direct Investment (FDI) in Pakistan has led to the creation of thousands of jobs in his country and UK companies has important role in this regard through their investments.

Addressing news conference at the Pakistan High Commission after meeting with various UK government functionaries, the minister said jobs had been created in the telecommunication and energy sectors and in other areas where the foreign companies have a heavy investment.

He spoke of his meeting with the UK Secretary for Business Enterprise and Regulatory Reforms John Hutton, Minister for International Trade Digvy Jones and DFID junior Minister Shahid Malik. On Monday the Minister visited Scotland where he met exporters and the members of the Glasgow Chamber of Commerce. On Wednesday, the Commerce Minister to visit Manchester before flying home. He also attended a luncheon meeting organised by the Pakistan-UK Trade and Investment Forum and said he had useful discussion with the concerned officials on matters relating to European Union and Pakistan efforts for market access to the EU countries.

Humayun Akhtar Khan said this was the first Ministerial level contact with Prime Minister Gordon Brown administration which he found useful and forthcoming. He said UK is Pakistan's largest trading partner within EU and within the Commission, Britain has always been very supportive of his country. He also said about Pakistan efforts to eliminate anti- dumping duties and GSP plus scheme and initiate preferential treatment and added UK has always stood by Pakistan in this regard.

Pakistan High Commissioner to United Kingdom, Dr Maleeha Lodhi was also present on the occasion. The Minister said Pakistan has active Free Trade Agreement with China and Sri Lanka, South Asia Free Trade Agreement (SAFTA), has concluded a similar agreement with Malaysia and about to do so with Singapore and also initiating with Thailand.

The Commerce Minister said since UK is a part of EU, under the rules there could be no free trade agreement and this as a whole has to be done with EU. We cannot negotiate independently with UK but Pakistan is trying to initiate FTA with the EU and that pursuit there is a sub-group on trade which has come into activation as a result of Third Generation Agreement.

He said Islamabad has been studying EU preferentials in South Asia and how it could effective Pakistan. This group, he added, would meet again in October this year, to take the matter forward.

Responding to a question on the recently announced Export Policy, Humayun Akhtar Khan said Pakistan was endeavouring to raise its exports to around $1 billion to China and there has been progress in this regard during a recent visit of a Chinese delegation under a vice minister. He said Chinese investment in Pakistan is always on the rise and this could be reflected by the acquisition of Paktel by a Chinese company. He said the increase investment by China in Pakistan would lead to the elimination of duties and cheap availability of raw material.

The Commerce Minister that the two UK Ministers he met this morning has shown interest to visit Pakistan and are likely to do so in near future.

http://www.brecorder.com/index.php?i...term=&supDate=

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Ukraine keen to enhance trade ties

ISLAMABAD (July 25 2007): Ukraine is desirous of broadening economic co-operation with Pakistan, Ambassador Pasko Ihor told National Assembly Deputy Speaker Sardar Muhammad Yaqub. Ambassador Ihor held a meeting with the Deputy Speaker on Tuesday and informed him on education facilities available in Ukraine.

A large number of Pakistani students was getting education because of high rate of literacy in his country. Sardar Yaqub said Pakistan and Ukraine shared common perception on global issues and spoke of multiple opportunities available to increase bilateral cooperation and work together for achievement of global peace. He also provided information to the ambassador on the rules and procedure of Pakistan parliament.

http://www.brecorder.com/index.php?i...term=&supDate=

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LSM sector fails to meet growth target

ISLAMABAD (July 25 2007): Large scale manufacturing (LSM) sector has failed to meet 12.5 percent target of the government for the 2006-07 fiscal year as it grew only by 8.63 percent in 11 months, down by 3.87 percent. This was disclosed by Federal Bureau of Statistic here on Tuesday.

The provisional quantum index numbers (QIN) of large scale manufacturing during July-May 2006-07 were computed on the basis of latest production data of 100 items received from Oil Companies Advisory Committee (OCAC), Ministry of Industries and Provincial Board of Statistics.

The OCAC compiled the data of 11 items, Ministry of Industries and Production provided the data of 35 items, while Provincial Bureau of Statistics (BOS) catered data of 54 items.

The data, provided by the Ministry of Industries and Production showed 9.56 per cent growth in 35 items during July-May 2006-07 over the same period of last year, whereas the Provincial BOS reported 9.10 per cent growth in 54 items.

The QIM clearly shows that the growth in large-scale manufacturing was far below the target set by the government as overall indices of LSM for July-May 2007 were 203.19, showing 8.63 per cent growth in 11 months over last year 187.04. The government had expected the LSM to contribute 12.5 per cent in the total growth for the last fiscal.

The index for May 2007 was 220, 7.10 percent up over May last year's 205.41 percent. The further analysis of data showed that indices of OCAC were 160.63 percent, down by 2.63 percent over the last year's indices of 168.16 per cent.

Giving detailed analysis of the data of various sectors, provided by the Ministry of Industries and Production showed that the sugar sector recorded 19.54 percent growth in the first 11 months of 2006-07 over the same period of last year, cotton yarn 11.88 percent, cotton cloth 6.26 per cent, jute goods 13.01 percent, steel products 11.95 percent, pig iron 30.80 percent, billets ingots 10.14 percent, HRC sheets/strips 6.99 percent, tractors 11.85 percent, motorcycle 12.42 percent, LCVs 17.48 percent, jeeps and cars 1.57 percent, buses 14.13 per cent and cement sector 21.60 per cent.

While the Bureau of Statistics said that vegetable ghee sector showed 2.15 percent growth during July-May 2006-07 against the same period of last year, cooking oil 7.03 percent, wheat and grain milling 7.17 percent, woolen and carpet yarn 6.30 percent, injections 37.94 percent, motor tubes 45.20 percent and air conditioners 25.89 percent.

Almost all the petroleum products, except a few, registered negative growth, thus the production of petroleum products was -2.63 percent during July-May 2006-07 over the same period of last year.

http://www.brecorder.com/index.php?i...term=&supDate=

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US envoy assures investment in ports development

ISLAMABAD (July 25 2007): The United States on Tuesday assured Pakistan of investing in development of country's ports. US Ambassador to Pakistan Anne W. Peterson made the assurance during her meeting with Ports and Shipping Minister Babar Khan Ghauri.

After Karachi port, Port Qasim and Gwadar port, Pakistan now plans to build country's fourth sea port at Sonmaini in Balochistan. According to the statement, Anne W. Peterson said the US would extend maximum co-operation in development of Pak sea ports.

About the security of ports, she assured the minister that the US would actively play its due role for the security of Pak ports. The US envoy also acknowledged Pakistan's role in war on terrorism.

Babar Khan Ghauri, while expressing his views, welcomed the US investment and hoped that the cooperation between the two sides would be strengthened further vis-à-vis ports and the shipping sector. Anne Peterson also accepted the invitation extended by Babar Khan Ghauri to visit Muttahida Qaumi Movement (MQM) central office in Karachi.

http://www.brecorder.com/index.php?i...term=&supDate=

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KPT to construct $535 million terminal at PDWCP

KARACHI (July 25 2007): The Karachi Port Trust (KPT) plans to build a high throughput terminal on 229.5 acres backup area at a cost of $535 million as Pakistan's Deep Water Container Port (PDWCP). Sources in KPT told Business Recorder on Tuesday that the terminal, for which tenders have already been issued, would have the capacity to receive and handle super-post Panamax container ships.

It may be recalled that KPT in collaboration with private sector is working to construct the PDWCP at an estimated cost of $1.087 billion to match the country's rapid container growth export targets and to compete with the regional transshipment market.

The construction work on the project, in which KPT would invest US $345 million, is scheduled to start by September 2007 and would be completed by June 2010. The successful bidders would construct the terminal, which would have container yards, storage and transfer areas, operational buildings and other supporting facilities and equipment.

The terminal, sources said, would also be equipped with ship-to-shore (STS) container cranes, rubber-tyred gantries (RTGs), RMGs, Reach Stackers, empty handlers, tractors, trailers, fork lifts etc. KPT would lease the terminal, to be constructed on Build-Operate-Transfer (BOT) basis, for an initial period of 25 years, which would be extendable for another 25 years, on mutually agreed terms and conditions, sources said.

The container terminal will have both road and rail connection to the hinterland including the proposed Cargo Village in the western backwaters of Karachi Port, sources said.

They said the private stakeholders would be required to develop the site into a full-fledged state-of-the-art container terminal. In the proposed PDWCP the Trust would be able to handle much larger vessels. KPT wants the terminal, which would have four deep-draught container berths with a 1500-metre quay wall, to be operational between 2009-10.

For planning the PDWCP, KPT had envisaged a design vessel, (similar to Emme Maersk), of 400-metre LOA, 55.0-metre beam and 15-metre draught with 11,000 'twenty-equivalent units' (TEUs) on board.

The channel and berthing face will be dredged to 16 metres, to start with, but the quay wall is designed for 18-metre depth which would ultimately cater for the design vessel, (450-metre LOA, 60-metre beam and 17-metre draught with 15,000 TEUs on board), the deepest ship being considered for long future planning in the region.

Sources said that a detailed hydraulic study and model testing of the direction and length of protection works was carried out to provide calm wave conditions inside the newly constructed basin. The navigational procedures, including safe arrival and departure of ships, and requirement of tugging assistance and swinging, were examined and all specifications were found to be within safe limits.

The Karachi Port, having an 11 km long, 12.2 metre deep approach channel, 30 dry cargo berths, and 3 liquid cargo handling terminals for POL and non-POL products handles over 65 percent of the country's sea borne traffic.

http://www.brecorder.com/index.php?i...term=&supDate=

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Energy plan envisages enhanced hydel-thermal ratio

LAHORE (July 25 2007): The recently approved 25 years 'Energy Security Action Plan' aims at increasing Pakistan's reliance on indigenous fuels, and envisages an enhanced hydel-thermal ratio of 39:61 from the existing 28:72.

This was stated by Punjab Minister for Power Chaudhry Armaghan Subhani, while talking to a three-member foreign delegation from the power sector working on Alternate Energy Sources, in his office here on Tuesday. He said the plan aimed to significantly reduce reliance on oil while increasing reliance on coal as an energy source, according to a handout.

"The government will encourage alternate sources of power generation along with conventional ones, and will facilitate the investors to the maximum in this regard," he said, adding that both demand and supply of energy had been on the rise since the last decade and a half.

He said the energy sector in Pakistan mainly consisted of power, gas, oil and coal, whereas according to a survey, the consumption of petroleum products, natural gas, electricity and coal had been increased by an annual average rate of 2.5 percent, 4.9 percent, 5.1 percent and 5.2 percent respectively.

In the last 14 years, the transport sector saw the largest use of petroleum products with a 48.7 percent share, while the power sector, industry, household, other government sectors and agriculture stood at 31 percent, 12.1 percent, 3.8 percent, 2.5 percent and 1.5 percent respectively.

The minister told the delegation that electricity consumption in household sector had always been the largest consumer with a share of 41.4 percent, with industrial, agricultural, government sectors and commercial consumers consuming 31.1 percent, 14.1 percent, seven percent and six percent respectively.

He said that with the growth of industry in Pakistan, the demand for electric power had increased, and was likely to grow at an average yearly rate of 7.9 percent by 2010.

"Renewable energy resources can prove to be vital in the electrification of remote areas in the province, and the government intends to promote a culture of energy efficiency and conservation in the country," he added. Later, members of the delegation discussed various suggestions regarding enhancement of power generation.

http://www.brecorder.com/index.php?i...term=&supDate=

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Strategy devised to boost seafood exports

ISLAMABAD: The federal government is working on a three-pronged strategy to increase seafood exports from $200 million to $1 billion, Dr Muhammad Hayat, Fisheries Development Commissioner said on Tuesday.

The Ministry of Food, Agriculture and Livestock (MINFAL) with the cooperation of provincial departments is working on a three-pronged strategy to explore the potential of fisheries, the Fisheries Development Commissioner added.

Unveiling the strategy, Dr Hayat said that the government plans to control post-harvest losses, focusing on value addition and development of aquaculture and shrimp farming to enhance the exports.

Adopting techniques that major fish exporters use would control post-harvest losses, which account for 30 to 40 per cent of the total catch, he said.

About the lower level of value addition in fish, Dr Hayat said, “we are encouraging local and foreign investors to make value addition in seafood, as all of the fish are exported in raw form.”

About the European Commission ban on fish exports, the fisheries development commissioner said that the federal government with the assistance of provincial and foreign agencies is executing a plan to restore the suspended fisheries’ exports to the European Union after compliance with the procedures.

The ministry along with the provincial agencies and foreign agency UNIDO is pursuing a programme to meet the standard operating procedures (SOPs) of the EC, he added.

The European Commission has de-listed 10 seafood processing units of Karachi for not meeting the quality standards of the commission.

“The UNIDO team engaged by the MINFAL to address the problems in seafood exports, is visiting fisheries and harbours and educating the community about the issues at the spot,” Dr Hayat said.

The Karachi Fish Harbour (KFH) is also renovating its K2 hall for handling fish and using it for export purposes as well, he said.

The EU countries, which shared 54 per cent of Pakistan’s $128 million seafood exports during 2003-04, have already imposed 100 per cent checks on the import of frozen fish products from Pakistan following detection of a contaminated consignment of shrimps at Rotterdam in March 2002.

http://www.thenews.com.pk/daily_detail.asp?id=65617

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Cell phone users increase

LAHORE: Cellular subscribers increased by 71.73 per cent during the last fiscal year.

According to figures released by Pakistan Telecommunication Authority, the number of cell phone subscribers was 36,778,462 in July 2006 which increased by 26,381,395 till June 2007.

Two new companies Telenor and Warid remained on top whereas Ufone ranked third place.

Telenor was on top as the growth rate of this company was 175 per cent. The number of subscribers of this company in June 2006 was 3,887,774 which increased by 10,701,332 by the end of fiscal year.

The growth rate of Warid was 102 per cent as the subscribers of this company increased from 5,246,565.

The subscribers of Ufone increased from 7,884,703 to 14,14,044 showing a growth of 77 per cent.

The growth rate of Mobilink was only 44.45 per cent. At the start of last fiscal year, the number of subscribers was 18,321,599 which increased to 26,466,451.

The subscribers of Paktel decreased by 8.66 per cent while subscribers of Instafone increased by 5.4 per cent.

http://www.thenews.com.pk/daily_detail.asp?id=65629

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Cut in output cost vital to compete globally: Employment policy

ISLAMABAD, July 24: Pakistan will have to reduce the cost of production and make it comparable with the competitors in order to penetrate and raise its share in the global export market, says the draft of the National Employment policy.

“Lowering of tariffs would bring a change in relative price of products across the chain and there is a need to reallocate resources to greater production, technological innovation and new production structures,” the draft obtained by Dawn said.

The new policy seeks to enhance the existing low employment rate by bringing efficiency in the public and private sector organisations. The policy planning cell (PPC) of the Labour and Manpower division has prepared the draft of the national employment policy to be shortly discussed with the stakeholders in all the four provinces after which it will be placed before the government for final approval.

It said that duties imposed on raw materials, considered high, are acting as major constraint for exporting leather shoes and meeting increasing global demand. Duties on tannery machines, spare parts and raw materials needed to be reduced or even made duty free for enabling greater Pakistani exports.

Special incentives, the policy urged, required to be offered for setting up of industries for the manufacturing of international quality trimming, accessories, competent and the inputs required by the leather industry and declaring Kasur and Sialkot as “leather cities” to promote leather industry.

Pakistan's export of leather goods to European countries is declining due to shifting of tanning industries to China, Korea and other Asian states.

Currently, dominated by the traditional food and textile products, the industrial sector demonstrates significant potential for growth, modernisation and employment expansion. It has to diversify and introduce modern technological processes.

Increasing integration with global market is must and critically linked with higher factor productivity and gradual shift to higher end- products.

The apparel industry needs to improve product quality, move up to value chain, lay technological foundations and strengthen global business operation to generate more employment opportunities as well as becoming global player.

Emphasis should be placed on the promotion of vale-added products, especially in new designs and products. To facilitate transformation of textile sectors into a strong, dynamic and internationally competitive industry, the government should help the industry to attain a dominant position in the made-up garments.

Similarly, the government needs to revitalise the institutional structure to strengthen skills and capabilities of human resources and enable the industry to move into a higher technological orbit, and encourage the active public-private partnership.

The agricultural economy still needs to play an important role in increasing productivity and incomes while maintaining its labour absorptive capacity and these needs to be adequately tapped.

“This is indeed contingent upon developing greater and effective linkages between setting targets with regard to GDP growth rates, investment and saving levels, fiscal prudence, taxation and monetary policy as well as inflation with considerations on effectively harnessing development and employment potential”, the policy said. Moreover, it also demands an institutional mechanism capable to respond effectively to the challenges, goals and targets.

Currently, dominated by the traditional food and textile products, the industrial sector demonstrates significant potential for growth, modernisation and employment expansion. It has to diversify and introduce modern technological processes.

Increasing integration with global market, a must, is critically linked with higher factor productivity and gradual shift to higher end- products. In the world trade, out of 66 categories of products, 22 have increased their shares and the winning products relate to: i) electric appliances, ii) telecom and recording devices, iii) medicines and medical devices, iv) business and data processing devices, and v) land transportation devices.

Many primary and low value-added products experienced a decline in their share. Among these losing industries, “yarn and textile” and “apparel” accounting for 71 per cent of Pakistani exports, recorded the largest decline in their shares.

“The way forward for us is to align our industry with the emerging trends and investing in the “winning industries” with greater participation of multinational corporations. Such an emphasis notwithstanding, we would need to simultaneously focus on the promotion of labour intensive industries, especially the traditional export oriented and those having backward and forward linkages by enhancing productivity and competitiveness.”

A clear and convincing “roadmap” of the policies together with commitment of their continuity is a “pre-requisite” for the growth of industrial sector, the draft of the policy said.

The most important fundamental right is none else than the availability of a productive work opportunity to the able and willing to work citizen of a country. The policy focus of the government of Pakistan is creating conditions conducive for decent employment generation, poverty reduction and human resource development. Hence, focus is on employment and poverty reduction outcomes of macro and sectoral policies. The “centrality” of employment in economic and social policy making has also led to a greater focus on raising productivity as well as technical and vocational competence of the workforce. The policies are also matched with budgetary allocations.

“However, unemployment and under-employment is quite pervasive; the underutilised labour accounts for a fifth of the workforce. Lesser remunerative and low productive work currently affects a significant proportion of the employed. Poor working conditions in significant workplaces are also not uncommon.”

Of the estimated over three million unemployed, a significant proportion is found to be: i) educated having matriculation and higher level of education - a scarce commodity in Pakistan, and youth, ii) chronically unemployed (39.5 per cent) i.e. unemployed for more than a year, and iii) active in the job/work search for over a year (21.3 per cent).

In the absence of any formal social security system, this places enormous pressure on the concerned households and individuals. It is also a drain on the already meagre resources of the country.

Still agricultural sector absorbs largest proportion, while manufacturing sector accounting for 13-14 per cent falls even behind, slightly though; social and personal services and wholesale and retail trade.

Illiteracy, low level of education and poor level as well as poor vocational, technical, and professional competence are currently important facets of the labour market participants.

The problem is compounded further by inadequacy of detailed, reliable and disaggregated information on different labour market indicators. Even disaggregated basic information on labour market changes, education and skill requirements, and nature and extent of unemployment by education, gender, areas and length of unemployment is not available.

Consequently, employment counselling, vocational guidance and employment placement are ineffective and even non-existent.

While, the changes occurring in different labour markets and the consequent demand for educated and skilled is not properly monitored, education and training institutions continue planning and executing their programmes. Mismatch of educated and trained is then the natural outcome. The education and training system also continues with qualitative and quantitative bottlenecks.

The current policy “focus” on employment, HRD and raising vocational and technical competence is the only way of ensuring a fairly dispersed, beneficial and sustainable development.

The rural areas and surrounding towns indeed demonstrate vast employment and development potential; largely remaining untapped. Main hindrances are none else than those related to marketing, and human and physical infrastructure bottlenecks.

Numerous efforts have been directed but largely un-coordinated.

Handicrafts and rural artesian also suffer through these bottlenecks. The main thrust of this policy naturally aims to removing these lacunas thereby greater synergies are built.

The agricultural sector and allied industry (livestock, poultry and dairy) accounting for the bulk of the employed would continue to keep its importance in determining employment and poverty levels.

A thriving agriculture and allied industry would also be able to reduce pressure on rural to urban migration and corresponding increases in low productivity informal sector employment in urban areas.

The agricultural economy still needs to play an important part in increasing productivity and incomes while maintaining its labour absorptive capacity; this need to be adequately tapped.

The set of policy areas identified and recommended in fact, are a pointer to the potential that can be effectively realised.

http://www.dawn.com/2007/07/25/ebr1.htm

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Foreign investors to acquire Saudi Pak

KARACHI, July 24: Another locally incorporated bank, Saudi Pak Commercial Bank, is in the process to be taken over by a consortium of foreign investors. Shaukat Tareen, who is leading the consortium, told Dawn on Tuesday that so far the State Bank had not approved any agreement regarding the sale of Saudi Pak Bank.

He however confirmed that both the consortium and the bank had expressed their intention to finalise a deal after due diligence with the approval of the central bank.

“We have agreed to buy the majority shares of the Saudi Pak Bank,” Shaukat Tareen said and added that the SBP would be approached for seeking its approval for initiating due diligence of the bank.

When contacted State Bank chief Spokesman Wasimuddin denied that the SBP had approved any agreement for the sale of the Saudi Pak Bank.

“Neither we are officially informed nor the SBP has approved any plan for the sale of Saudi Pak,” said the SBP spokesman.

A formal deal is expected after assessment of the accounts of the bank and valuation of its assets.

The report about SBP approval of the agreement on Tuesday triggered massive buying in Saudi Pak Bank shares on stock market with a turnover of 11 million shares.

“Saudi Pak Industrial and Agriculture Investment Company Pvt Ltd has informed us of their ‘intention’ to sell their shareholding to a consortium led by Shaukat Tareen,” said the KSE notification on Tuesday.

“Purchaser will be applying to the State Bank for permission to conduct a due diligence so that they could assess and evaluate the financial and legal position of Saudi Pak Commercial Bank,” the KSE notification said.

“Saudi Pak has requested Saudi Pak Bank to extend its cooperation to the said purchaser,” it added.

It further said; “The Saudi Pak Commercial Bank has not been involved in any discussion with the said purchaser.”

The sale of the bank will be the fourth major event in the banking sector after sale of Union Bank, PICIC Commercial Bank and Prime Bank.

The balance sheet of the Saudi Bank showed that the bank posted a loss after tax as Rs319 million in 2006. The first quarter of 2007 showed that the loss went higher as it reached Rs104 million in just three months.

The bank has been operating with 50 branches across the country and its assets in 2006 were Rs63.8 billion. Saudi Pak Industrial and Agricultural Company Limited has 59 per cent shares in the bank.

http://www.dawn.com/2007/07/25/ebr3.htm

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Pakistan gaining attention as outsourcing haven

From Khalid Hasan

WASHINGTON: Pakistan is getting much attention in offshore outsourcing and it is only the threat of terrorism that has kept the sector from achieving its full potential, according to a professional magazine.

Patrick Thibodeau writes in the current issue of Computerworld that despite this handicap, Pakistan has a developing offshore IT services industry and in many areas of the country, it’s “business as usual.” In March this year, Chicago-based consulting firm AT Kearney Inc for the first time added Pakistan to a list of 50 countries that it evaluates for their offshore services . AT Kearney’s Global Services Location Index weighs more than 40 metrics, such as a country’s labor pool, infrastructure and legal system. Johan Gott, an analyst at AT Kearney, said Pakistan was added to the list of evaluated countries in order to stay ahead of interest from the consulting firm’s clients. Although it’s doubtful that large companies will build offshore development centres in Pakistan, Gott said the country does have potential - particularly with smaller companies seeking outsourced IT services. “In many respects, it’s similar to India in terms of education and people skills,” he added.

According to the article, AT Kearney is not the only market watcher that thinks offshore development may pick up in Pakistan. In a report last year, New York-based Lehman Brothers Holdings Inc said Pakistan’s IT industry was growing at a high rate, with more than 330 companies having registered with the country’s software export board. According to Lehman Brothers, Pakistan’s advantages include relatively low wages - amounting to as little as half the level of salaries in India - as well as reasonable real estate costs, plentiful government incentives and a readily available supply of workers. One of the largest IT services firms with operations in Pakistan is Calabasas, California-based NetSol Technologies Inc NetSol, which is listed on the Nasdaq Stock Market, has offices in the UK, China and Australia. The company was founded in Pakistan in the mid-1990s, and employs about 600 engineers there on projects for global clients in such industries as automotive and financial services.

Najib Ghauri of NetSol says the US is Pakistan’s largest trading partner, and Pakistan’s economy is doing well. “Anytime anybody goes to Pakistan, they always come back bullish,” he said. Todd Furniss, chief operating officer at the , says Pakistan has a reasonably stable economy and a legal system based on English law. “That infrastructure should make it a logical destination for services,” he added. However, it is not the case, he added, because of a number of issues facing the country, including the lack of an IT industry group similar to India’s National Association of Software and Services Companies. He also questioned whether Pakistan’s educational system is adequately preparing students for the IT services labour market. The biggest problem holding back Pakistan’s IT services industry is the geopolitical situation, according to Furniss. “That is really is a central issue,” he said. There are many other countries that offer similar outsourcing options and “don’t come with the issues that Pakistan comes with right now”, another computer executive observed.

http://www.dailytimes.com.pk/default...5-7-2007_pg7_1

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Chinese firms eager to do business with Pakistan

* 15 agreements worth $109m signed between Chinese and Pakistani companies

Thursday, July 26, 2007

KARACHI: Despite attacks on Chinese for quite some time in the country, businessmen and investors from China seem determined to opt for business ventures and pacts with their Pakistani counterparts.

This is evident from the fact that a number of Chinese companies have entered into agreements with Pakistani firms at a recently concluded exhibition for Chinese businessmen and investors in Islamabad.

The participation of Chinese companies in the exhibition was encouraging and their interest in having joint ventures with Pakistan firms bodes well for the trade ties between the two countries.

A total of fifteen business deals worth $109 million were signed between Pakistani and Chinese companies on this occasion besides one Memorandum of Understanding (MoU) was also signed.

Though, the amount involved in these agreements is not that much, however it is significant in the backdrop of some unfortunate incidents, in which Chinese nationals were targeted, as viewed by business community of the country.

They said that they are in contact with their counterparts in China and there are no indications, which discourage them to come to Pakistan and invest and make business deals.

“Our Chinese counterparts seem undeterred in the face of such unfortunate incidents,” a businessman said.

The agreements signed at the recently concluded exhibition covers various areas. It ranges from marble, cotton yarn, celestite, leather to chrome ore, guar gum powder and manganese ore.

Businessmen said that apart from these business deals, more investment and business ventures would come as Pak-China Joint Investment Company has been established recently, which would pave for more Chinese investment in the country.

Also, the bilateral trade under Free Trade Agreement (FTA), which got underway from July 01, 2007 is also set to witness growth in the coming days and estimates suggest that exports from Pakistan would peak to over $1 billion in the near term.

Despite FTA, operational from July 01, there has been significant growth in bilateral trade between China and Pakistan. Statistics suggest that China’s import from Pakistan grew by 32 percent and totaled at $462 million in the last financial year over the year 2005.

In July-March of 2006-07, Pakistan’s imports from China were recorded at $2.45 billion. The major products included all sorts of machinery, steel products, industrial chemicals, synthetic yarn and fabrics, tyres and tubes. The exports from Pakistan to China during the same period were recorded at $407 million showing a trade deficit of $2.04 billion. The major exports included cotton yarn and fabrics, ores and non-ferrous metals, leather, fish and fish preparation, chemicals, and cotton waste.

According to an exporter, China and Pakistan friendship is time-tested and emerged unscathed over the years despite some negative developments and propaganda, spread by common enemy of both the countries and this deep relationship is reflective from the growing trade between the two countries.

Businessmen said that they are also considering to participate in the Guangzhou Export-Import fair to take advantage of this opportunity so that they could increase their share of export to big Chinese market.

http://www.dailytimes.com.pk/default...-7-2007_pg5_12

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$4.125 billion deficit witnessed in service trade

KARACHI (July 26 2007): Country faced a deficit of 4.125 billion dollars in service trade, mainly due to high payments of transportation, construction, financial, computer services and royalties during the 2007 fiscal year.

The central bank statistics revealed on Wednesday that Pakistan had earned 4.125 billion dollars against the payments of 8.250 billion dollars on account of services trade, including transportation, travel, royalties, insurance, financial services during the 2007 fiscal year, depicting a 50 percent or 4.125 billion-dollar deficit.

Major contribution in services trade deficit witnessed in transportation, travel and royalties sectors as the share of only transportation sector in the overall deficit was around 50 percent share. Deficit in transportation and travel services sector reached 3.377 billion dollars, ie around 82 percent of overall deficit faced by country during 2007.

According to the statistics, the country faced 2.03 billion-dollar deficit in the transportation services, export of which amounted to 1.095 billion dollars during 2007 against the imports of 3.127 billion dollars during 2007 fiscal year.

Similarly, some 1.345 billion-dollar deficit was recorded in the travel services, as its imports stood at 1.619 billion dollars during 2007 against the export of 274 million dollars. "Rising imports has played a major role in the services sector's deficit, while the raise in the tariff of shipping line is also another leading factor behind it," said economist Muzammil Aslam.

Pakistan did not have a shipping line, except for one flag carrier, Pakistan National Shipping Corporation (PNSC), exporters and importers were, therefore, compelled to hire international shipping lines, he added "During current fiscal year, the country's services deficit might be higher than the last fiscal year as recently shipping lines had further raised their freights," he said.

On the other hand, healthy exports witnessed in the government services, which have contributed around 45 percent of total export. The government sector shows a surplus income of 1.15 billion dollars, as its service exports touched new mark of 1.84 billion dollars against the imports of 325.6 million dollars during the last fiscal.

Statistics further show that services exports grew by 355 million dollars to 4.125 billion dollars during the last fiscal. During 2006 fiscal year, it stood at 3.769 billion dollars, while imports witnessed a growth of by 51 million dollars to 8.250 billion dollars from 8.198 billion dollars in 2006 fiscal.

During June 2007, services trade faced a deficit of 283 million dollars, as its exports stood at 424 million dollars against the imports of 708 million-dollar imports during June 2007.

Construction sector has performed well during the last fiscal, as there was no deficit. Exports in this sector reached 74.154 million dollars as compared to import of 54.838 million dollars, showing a surplus of 19 .316 million dollars during July-June of 2007.

The country's communication services earning recorded 120.751 million-dollar as compared to 97.533 million dollars payments, while insurance sector's exports stood at 30.422 million dollars against the imports of 125 million dollars, financial services exports reached 80.53 million dollars as compared to imports of 135.476 million dollars during the last fiscal.

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