Bharat Rakshak

Larkana has become the most expensive city of the country as highest inflation was observed there during November 2011, the State Bank of Pakistan said in its inflation monitor.

ISLAMABAD: Sources in Sui Northern Gas Pipelines have revealed that government was considering closing CNG stations for two months (Jan-Feb)to cope with the ongoing natural gas crisis, which was feared to worsen by mid-winter.A summary to this effect has been forwarded to the Ministry of Petroleum.
Sources in the gas company told Geo News that this move would save around 300 MCF gas for the domestic as well as industrial consumers.

NEW DELHI: Pakistan has emerged as a leading market for Indian tea, particularly the CTC variety of black tea, with India exporting around 20 million tonnes of the beverage to the neighbouring country in 2011.

All the "lakshanas" of a failed state, riots on streets for shortages of basic necessities like power, gas and petrol.

Nationwide protests against gas load shedding

But Pakis never collapse and become failed state eh ji? That's bcoz of the Momin, 10 TFTA = 1 SDRE. I TFTA will burn 10 times as many buses as SDREs during the riots.

We are helping them out with Power and Petrol see TSP thread. Iran is desperate to supply 5000MW and Gas . SO ALL IZZ Well only.

Aptma Punjab to defy SNGPL load plan

All Pakistan Textile Mills Association (Aptma) has given the industry a call to defy the ongoing, indefinite gas curtailment for the industrial sector in Punjab unless the supplies are restored by Monday.

He said the textile industry would start its operations on gas from Monday in violation of the SNGPL notice unless its demand was met.

Ahsan questioned the government`s priority in distribution of gas shortages of 1,100 mmcfd in Punjab between different sectors, saying the policy of giving preference to the domestic consumers and CNG sector had led to industrial closures and job losses.

According to him, Pakistan`s exports had already come down by 40 per cent in terms of quantity and trade deficit enlarged to $12 billion.

The SNGPL cut gas supplies to the entire industry in the province for an indefinite period after domestic demand soared on falling temperatures resulting in a shortfall of over 1,100 mmcfd. The utility says the domestic sector was on the top of its priority while distributing gas available in the system.

The Pakistan government's economic forecasts, which in themselves paint a grim picture, are far too rosy, says the International Monetary Fund, which is particularly concerned at the easy monetary policy of the central bank. The IMF's findings are likely to put more pressure on the weak rupee. - Syed Fazl-e-Haider

ISLAMABAD: Pakistan’s export of textile and clothing plunged for the fourth consecutive month in January this year from a year ago, as continuing global recession cut demand from key markets, like Europe and United States.

Chairman, All-Pakistan Textile Mills Association (Aptma), Mohsin Aziz, observed on Friday that export target of $16 billion projected for textile and clothing for the current year would not be achieved.

“Even things are so worse for these sectors that their exports will remain below $12 billion mark by the end of June 2012”, Mr Aziz told Dawn.

He also cited domestic reasons, including energy shortages, for drop in export proceeds.

Last year, export of textile and clothing sector crossed the mark of $14 billion.

At the same time, there was a significant decline in import of machinery in the value-added sector to increase quality and capacity of production.

Mr Aziz said that buyers were still there but the domestic industry was not in a position to honour their orders because of high cost of production. The government, he said, should take notice of these issues, otherwise it would lead to collapse of the
industry.

Amid pressure from the United States, Iran has offered to export 80,000 barrels of oil per day to Pakistan on three-month deferred payments which may ease pressure on energy supplies due to the circular debt.

Besides oil supply on credit, Iran also offered to provide $250 million financing for laying infrastructure of the Iran-Pakistan gas pipeline project. However, Hussain said Pakistan had asked Iran to provide $500 million for the pipeline.

LAHORE:
State Bank of Pakistan (SBP) Governor Yaseen Anwar has said that Pakistan holds enormous potential for economic growth and termed the economy’s resilience unparalleled which has survived two major floods, a catastrophic earthquake, war on one border and balance of payments crisis.

All this happened “without any bouts of hyperinflation, a run on bank deposits or a deep recession,” he said while speaking on the subject “The State of Pakistan’s Economy” at a seminar organised by the Management Association of Pakistan (MAP) here on Thursday.

“This only goes to show the enormous potential for growth that the country holds,” he added.

Food inflation also entered a double digit growth of 10.58% in February, from a year ago. Prices of non-perishable food items witnessed a surge of 9.60% and that of perishable items 17.09%.

LAHORE: Pakistan Industrial and Traders Associations Front (PIAF) has urged the government to focus on promotion of economic activities in the country as an acute shortage of gas, electricity, political instability and high cost of doing business were coming in the way of achieving economic targets.

In a statement issued here, the PIAF Chairman Engineer Sohail Lashari said that it was very unfortunate that no new dam was built in the country since 1973 while the entire country was in grip of load-shedding for the last many years. He said that during this period neighboring India got 100 new dams and its GDP growth is an eye-opener for all.

He said that only because of electricity shortage, investment both local and foreign has nose-dived rather a number of existing industrial units have shifted their operations to the other countries.

The PIAF Chairman said that country’s reliance on costly thermal power has jacked up the cost of doing business in the country thus making Pakistani merchandise less attractive in the global marketplace.

Engineer Sohail Lashari said that enhanced economic activities would help government get rid of bank borrowings and maximum funds would be available to business community.

He said that same was the case with gas and petroleum sectors where no considerable work was done since 1980 and the situation has turned so bad that there is no gas available to the entire industrial sector.

Sohail Lashari while showing concern over the Indian Supreme Court order to implement an ambitious project to link major rivers, said that Indian aggression and water bomb has already posed serious threats for the country while Indian Supreme Court connivance with the Indian government directed to link 30 rivers that would make the Pakistan barren while Pakistani government was playing the role of silent spectator. He said that present regime had also shelved the project with a one stroke of pen.

Sohail Lashari demanded of the government to allocate sufficient funds for the construction of water reservoirs including Kalabagh Dam in the forthcoming Federal Budget 2012-13.

He said that government should avoid any pressure and complete Pak-Iran Gas Pipeline Project at the earliest while work on Thar Coal project should also be accelerated.

Saddened by the fact that TSP is going to miss its growth target this year.

4.2 percent growth target to be missed: Pide

There is a general consensus within and outside the country that the economy of Pakistan has never been in such a bad shape since its inception in 1947. Pakistan has faced serious difficulties off and on over the last 64 years but has managed to sail through because of a competent economic team and strong leadership. Now there is a general view in the country that such leadership and economic team and are missing today. It is for this reason that the people of Pakistan are nervous about the future outlook of the economy.

A long and harsh winter has gripped Pakistan’s economic landscape over the last several years. Slower economic growth, persistence of double-digit inflation, large fiscal deficit, unprecedented surge in public debt, rise in unemployment and poverty, and weakening of the country’s physical and human infrastructure are some of the ailments that the economy is confronted with.

Budget 2012-13 is likely to be the last budget of this dispensation and will be a truly election budget. The prime minister has already announced that no new tax measures will be imposed in the forthcoming budget but at the same time more “relief” would be provided to the people (apparently to win the next election). Such a policy stance does not augur well for the economy which is already in a dire strait.

Where would the economy of Pakistan be by the end of the ongoing fiscal year or before the presentation of Budget 2012-13? All available information suggests that economic growth may improve to 3.5-3.8 percent owing to good cotton crop as against 2.4 percent last year. Investment rate is likely to fall further from a 37-year low of last year (13.4 percent), industry may experience 2.0-2.5 percent growth, both unemployment and poverty are likely to increase further (the government has neither released the poverty number nor the basic data to measure poverty for the year 2010-11), inflation would continue to follow the trend of the last 50 months by remaining at double digits, and the fiscal situation is likely to worsen further with a budget deficit touching almost 7.0 percent of the GDP.

Pakistan’s public debt may touch Rs13 trillion or 62 percent of the GDP mainly on account of a large fiscal deficit and depreciation of exchange rate. The current account deficit may touch $5.0-5.5 billion or 2.3-2.5 percent of the GDP. Although the size of the deficit would be relatively small, the financing of it would be a serious challenge for the government. Export growth may turn negative and import growth may surge owing to the rise in oil prices.

The development of the external sector may lead to a decline in foreign exchange reserves to $15 billion from $18 billion at the end of last year. In other words, Pakistan may lose $3 billion in foreign exchange reserves, putting further pressure on the exchange rate. Pakistan may not seek a new IMF programme but will prefer to enter into a post programme monitoring with the IMF for which the discussion has already begun.

In short, the economy may further deteriorate by the time the government presents its election budget in May/June 2012. What are the critical constraints that a new dispensation will face after the election? It is absolutely clear that no single political party would be in a position to form a government. Hence there would be a coalition government facing serious constraints in taking difficult decisions to improve the economy. Pakistan’s economy has reached a point where the status quo is not an option. It will require political commitment and a series of short-to-medium-to-long term measures to put the economy on a path of sustained recovery.

Pakistan going to the IMF is written on the wall, it is only the timing that needs to be decided. In the midst of deteriorating trade and current account balances, declining external flows, falling foreign exchange reserves, heavy repayment of external debt obligations and depreciating exchange rate, it has no option but to seek the IMF’s resources to forestall an emerging serious balance of payment crisis. The question is: should Pakistan go to the IMF when it reaches a precarious condition or should it seek IMF support when it is in a relatively less vulnerable position? The prudent policy dictates that Pakistan should seek IMF assistance as soon as possible.

The fiscal stance, as revealed by the prime minister, for the election budget clearly rules out the possibility of Pakistan seeking IMF support any time soon. Hence, the present government is not likely to go to the IMF for a balance of payments support. My view is that the task of taking Pakistan back to the IMF will be left to the caretaker regime as the prior actions of the IMF programme will be extremely difficult for any political government to implement.

The new dispensation, besides facing the constraints of a coalition government, will also be facing the constraints of the IMF programme. The IMF will certainly ask the government to implement tax reforms to mobilize more resources and cut expenditure by gradually reducing subsidies; address the issues pertaining to rotten public sector enterprises, power sector, circular debt, and most importantly the NFC award with a view to reducing budget deficit.

It will be next to impossible for the new coalition government to implement such policies. It is therefore not difficult to predict the fate of the IMF programme which, in all probability, is likely to face suspension. Fiscal indiscipline will therefore, become the order of the day with disastrous consequences for the economy and national security.

I earnestly pray that I am proven wrong. And that the new coalition government pursues a disciplined fiscal policy, addresses all the challenges that the economy is facing, restores economic stability and takes the country towards prosperity and development.

The writer is principal and dean at NUST Business School (NBS) Islamabad. Email: ahkhan@ nbs.edu.pk

Minister puts debt level at Rs396 billion by March 15.

By Zahid Gishkori - Published: March 16, 2012

ISLAMABAD: It has not happened overnight but is an alarming development nonetheless, that the circular debt among energy companies has soared 465% in four years since the Pakistan Peoples Party-led coalition government came to power in March 2008.

“The power sector circular debt increased to Rs396.7 billion by March 15, 2012, which is Rs326 billion or 465.7% higher than the debt in March 2008,” Petroleum and Natural Resources Minister Asim Hussain told the National Assembly on Thursday.

In a written reply to a question, the petroleum minister attributed the runaway debt to delay in payments by power companies for oil and gas.

Pakistan Muslim League-Nawaz (PML-N) MNA Nisar Tanveer had asked for the exact amount of circular debt in the energy sector.

LNG to arrive in late 2013

Speaking during question hour, Hussain also said Pakistan planned to import 500 million cubic feet of liquefied natural gas (LNG) from Qatar, which was expected to begin in one and a half years.

An agreement to this effect has been signed with Qatar, but the price of LNG is yet to be decided between the two countries. However, Hussain said, the price would be in accordance with prevailing rates in the region.

PIA to buy more airplanes

Defence Minister Chaudhry Ahmad Mukhtar told the house that Pakistan International Airlines (PIA) would buy more aircraft in order to avoid flight delays and to better facilitate passengers.

He said that rules would be followed in the purchase of aircraft. “In the first phase, we will get airplanes on lease from Boeing while in the second phase aircraft will be purchased from Airbus,” he said.

Published in The Express Tribune, March 16th, 2012.

Investors purchase Rs25b worth of Pakistan Investment Bonds in auction.

By Shahbaz Rana - Published: March 16, 2012

ISLAMABAD: In what appeared to be a sign of liquidity shortage due to government borrowing, the yield on 10-year investment bonds has risen to 13.11%, an increase of 41 basis points in a month.

The government on Thursday borrowed Rs25 billion through auction of Pakistan Investment Bonds (PIBs), having maturity of three, five and 10 years, said an official of the finance ministry.

The auction results show that investors, mainly banks, purchased 10-year PIBs at 13.11%, which is 41 basis points higher than the last auction held on February 15. Similarly, the yield on five-year PIBs rose to 12.89% from 12.68%, up 21 basis points. Yield on three-year PIBs increased to 12.5%, 10 basis points higher than the last auction.

Analysts say the increase in bond yields not only indicates a shortage of liquidity, but also makes the discount rate – at which the central bank lends to commercial banks – ineffective. Currently, the discount rate stands at 12%.

Analysts say on the one hand the central bank injects money at around 12% through open market operations while on the other hand the government borrows the same from banks at higher interest rates. According to a recent report of the State Bank of Pakistan, profits of large banks rose by 27% last year.

However, both the central bank and finance ministry rejected talk of liquidity shortage.

“Weighted average yields of three, five and ten-year bonds rose by 10 basis points, which is okay in the given inflationary pressure,” said Rana Assad Amin, Special Secretary of the Ministry of Finance.

By March 12, he said, the government had borrowed Rs918 billion for budget financing, including Rs390 billion to clear power sector arrears.

“Had the government not borrowed Rs9 billion by selling 10-year bonds, the borrowing from the central bank would have increased by the same amount,” said Amin.

As foreign financing has almost dried up, heavy government borrowing from domestic sources has virtually left nothing for the private sector, hurting the growth of industry as well as jobs.

SBP chief spokesman Syed Wasimuddin was also of the view that there was no liquidity shortage in the market. Defending the increase in return on long-term bonds, he said, “the yield is merely a correction towards normal level.”

The International Monetary Fund (IMF) in its recent report on Pakistan criticised the central bank for directly and indirectly financing the government’s budget deficit. It termed the monetary policy “too accommodative”.

From July to March this year, the gap between national income and expenditure widened to 5.5 per cent of total national output or Rs1,153 billion, show provisional estimates.

Rates of return on treasury bills also rose last month. On three-month bills, the yield increased to 11.83%, up 23 basis points than the January rate. On six-month papers, the rate went up to 11.9%, 27 basis points higher than the previous auction.

Debt breakdown

According to official documents, domestic debt ballooned to around Rs7 trillion by end-January, a net increase of Rs953 billion since July. Of the total figure, the share of treasury bills stood at Rs2.4 trillion, a third of total debt.

Similarly, the share of market treasury bills was slightly over a fifth, standing at Rs1.4 trillion. Investment bonds made up 12% of total debt as the government borrowed Rs882 billion through auctions.

National savings schemes are the second biggest source of government borrowing. Their share was around Rs2 trillion, 29% of total domestic debt.

Published in The Express Tribune, March 16th, 2012.

Observed Economic Statistics

Pakistan received $6.4 million in aid in FY1996, and $2.5 million in FY1997 under the counternarcotics and food aid programs. (US Agency for International Development, FY1998 Congressional Presentation)

Pakistan paid $658 million for 28 F-16s, which were stored at a US air force base in Arizona after Pressler amendment barred transfer. (Associated Press, 25 May 1995)

"US aid had totaled about $650 million annually. But last month, the US, pinched by budget austerity, decided that even if Pakistan gives up its nuclear-weapons program, it only will receive about $200 million." (Wall Street Journal, 5 February 1991, A8)

Military spending accounts for almost half of Pakistan's $13 billion annual budget. India spends slightly more in absolute terms. (Associated Press, 8 January 1996)

"As 1998 began, the only tangible benefit Pakistan received [from the Brown amendment] was the delivery of $368 million worth of military equipment, which it had paid for already, and the renewal of investment guarantees." (Kux 168)

"Across Pakistan, the economic news worsens by the day. Since the nuclear tests in May, the prices of such basic goods as food and gasoline have shot up by as much as 25 percent. The Karachi Stock Exchange had lost 40 percent of its value before Thursday-and it dropped again after the missile strikes. The rupee, Pakistan's currency, has lost 30 percent of its value against the dollar." (International Herald Tribune, 8 August 1998, 1)

"Pakistan depends on foreign aid to cover its budget deficit, and was jolted when the IMF stopped one payment of a phased, three-year, $1.56 billion loan package as part of economic sanctions following the nuclear tests." (Associated Press, 7 September 1998)

"The immediate pressure is acute, with reportedly less than three weeks' import cover, and reserves insufficient to cover the estimated $1.7 billion owed over the next eight weeks to foreign commercial banks and to the World Bank and the IMF." (International Herald Tribune, 4 September 1998,

"Mr. Sharif's fall-back solution for the economy is an aid package expected from the Islamic Development Bank and other Middle Eastern donors. But though this could amount to as much as $1.5 billion, it is no long-term solution when the external funding shortfall this year is likely to be $4 billion or more." (Financial Times, 27 August 1998, 9)

"Since the Indian tests, the KSE-100 index has fallen more than 40 percent. But in the past two weeks, the market has clawed back 9.5 percent on expectations that Pakistan is about to sign the Comprehensive Test Ban Treaty to end its nuclear row with the west. Reports that the Jeddah-based Islamic Development Bank has extended a $200m loan to co-finance a $1.5bn Islamic loan fund for Pakistan also helped sentiment." (Financial Times, 22 September 1998, 38)

"There is now only about $500m left in liquid foreign reserves or just two weeks' worth of imports, down from over $1bn when the nuclear tests were conducted." (Financial Times, 7 October 1998, 4)

"The country's foreign exchange reserves have fallen sharply to just over $400m, … and it has accumulated almost $1.4b in unpaid debts to commercial banks and other creditors since June, when sanctions were imposed." (Financial Times, 2 December 1998, 4)

Singapore—Pakistan’s High Commissioner in Singapore Syed Hasan Javed said that recent advances in IT (?) and Telecom Apps (?), Genome (?) and bio-technology (?), Medical sciences (?), Defence (?) and Space technology (?) have put Pakistan in a different league of Nations. {Wow, which league is this liar talking about. BTW, what advances have they made apart from begging and terror industry}

He said that despite various challenges, Pakistan’s economy has maintained an average growth rate of 5 to 6 percent for the past six decades. Pakistan’s mineral resource endowments of US $ 30 trillion (double of US GDP) consisting some of the world’s largest reserves of Coal, gold, copper, chrome, gas, rare earth, rock salt, gemstone, marble, onyx and granite in addition to 42 other minerals, is only tip of the iceberg, with half of the country surveyed.

Singapore—Pakistan’s High Commissioner in Singapore Syed Hasan Javed said that recent advances in IT (?) and Telecom Apps (?), Genome (?) and bio-technology (?), Medical sciences (?), Defence (?) and Space technology (?) have put Pakistan in a different league of Nations. {Wow, which league is this liar talking about. BTW, what advances have they made apart from begging and terror industry}

He said that despite various challenges, Pakistan’s economy has maintained an average growth rate of 5 to 6 percent for the past six decades. Pakistan’s mineral resource endowments of US $ 30 trillion (double of US GDP) consisting some of the world’s largest reserves of Coal, gold, copper, chrome, gas, rare earth, rock salt, gemstone, marble, onyx and granite in addition to 42 other minerals, is only tip of the iceberg, with half of the country surveyed.

They said trade suffered a huge loss due to a sharp decline in sales in the city as buyers were avoiding risk of visiting markets over fear of anti-social elements.

The port activity remained shut and due to the closure of loading and unloading at the Karachi Port Trust ... around Rs 5 billion loss to imports and Rs 6 billion loss to exports were reported.

Apart from Karachi, economic activities also remained suspended in Hyderabad, Mirpurkhas, Sukkur, Shikarpur, Larkana, Naudero, Tando Allahyar and other parts of Sindh.

LAHORE – All Pakistan Textile Mills Association (APTMA) Chairman Mohsin Aziz, while expressing concern over constant decline in exports for the last two quarters, has observed that dreams of $16 billion exports target in 2011-12 is unlikely to be materialized by the end of fiscal year. Even the export target of previous year worth $14 billion will not be achieved mainly due to energy crisis, as the year may end up with meagre $12 billion textile exports, he added.He said energy shortage was the prime cause of decline in exports, as 40 per cent of production capacity of textile industry is dysfunctional due to short supply of electricity and gas. It is only raw cotton exports registering growth, which unfortunately is agriculture crop with no value addition until being processed through value-added textile chain, he lamented.Mohsin Aziz said textile exports in quantity terms have dropped by over 30 per cent in the month of February comparing with corresponding period. He said it was only first quarter of current fiscal year when textile exports showed steady growth which was due to the BMR in the previous year which had brought in hope of achieving $16 billion exports by the end of end of current fiscal. However, the latter two quarter results are quite dismal and exports are consecutively showing declining trend since October 2011 till date.Chairman APTMA said exports of cotton cloth, knitwear, bed wear and readymade garments are down on an average by 31 per cent, 36 per cent, 31 per cent and 19 per cent respectively in quantity terms since November.According to him, the textile industry based on independent and grouped feeders are facing serious setback due to load constraints and shut downs for four to eight hours a day. Resultantly, he said, textile industry has failed to produce export surplus and is not likely to meet $16 billion exports and is likely to close the year at $12 billion exports. Even, the European Union trade concessions will not bring in any desired results and effort would also go waste as we are not producing export surplus to be able to achieve new market access due to consecutive and frequent closures and shut down the mills are still facing financial losses out of proportion their abilities. The banking sector is reluctant to come up and extend helping hand and industry is now facing severe liquidity crunc

The ‘hidden’, refers to facilitation fee paid to political power yielders, speed money paid to different government departments involved in certifications, bribes to regulators and tax authorities and payments to extortionists and criminal elements

Included is also the cost incurred on account of unscheduled outages of gas and electricity, additional cost of availing more expensive mode of transportation to meet export delivery deadlines, penalties for delays, etc.

Karachi is said to be the most expensive in terms of undeclared costs.

The investment to GDP ratio currently at around 13 per cent is the lowest in the region.

Believe it or not, I have long given up on calculating the real total cost of my operations. I have no clue.

being veg is always healthier...look at the fitness level of antelope , horses and zebras...pakis can just follow that diet plan.

Pakistan is most promising emerging market



What on earth is telecom apps? Probably talking about apps for iPhone and iPad.

Pakistan has 53 percent population under twenty years