PRO 05-08-2012_Layout 1 8/4/2012 11:14 PM Page 1
Sunday, 5 August, 2012
Food for thought… Food imports fall 0.60 percent
ECB saves Greece from bankruptcy by securing emergency loans-paper The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said. BERLIN AGENCIES
The ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in its Saturday edition. Until now the Bank of Greece could only accept T-Bills up to a limit of 3 billion euros ($3.70 billion) as collateral for emergency liquidity assistance (ELA) but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources. The ECB Governing Council gave this wish the green light, the paper said. The move should enable the Greek government to access up to an extra 4 billion euros of funds, the paper said, adding that this should ensure the country keeps its head above water until the “troika” of the European Union, the European Central Bank and the International Monetary Fund decide on the disbursement of the next tranche of money from its aid program in September.
ISLAMABAD
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APP
ooD imports into the country decreased to $ 5.048 billion during Financial Year (201112), showing negative growth of 0.60 percent when compared
to the exports of $ 5.078 billion during the corresponding period of the previous year. The major food products that witnessed negative growth in imports during the period under review included milk, cream and milk food for infants, imports of which decreased by 2.81 percent, according to the data of Pakistan Bureau of Statistics (PBS). The imports of milk, cream and milk food were recorded at $161.169million in 2011-12 against the imports of $165.834 million during 2010-11. Imports of wheat also decreased from $10.725 million to zero, showing hundred percent downfall while the imports of spices decreased from $103.992 million to $100.929 million, showing decrease of 2.95 percent. Imports of soybean oil also witnessed considerable fall of 23.18 percent by going down from $66.930 million in 201011 to $ 51.418mmillion while the imports of sugar decreased from $684.629 million to $15.460 million, a fall of 97.74 percent. Meanwhile, the food products that witnessed positive growth in imports during the period under review included dry fruits and nuts, imports of which decreased by 2.76 percent. Similarly, the tea imports into the country increase by five percent from $334.064 million to $350.772 million while the imports of palm oil increased by 17.53 percent by going up from $2.020 billion to $2.374 billion. The imports of pulses (leguminous vegetables) went up from $403.119 million to $433.436 million, an increase of 7.52 percent while the imports of all other food items increased by 22.42 percent, from $1.200 billion to $1.469 billion, the PBS data revealed. It is pertinent to mention here that the overall imports into the country during the period under review increase by 11.13 percent. The imports into the country during July-June (2011-12) stood at $44.912 billion against the imports of $40.414 billion recorded during July-June (2010-11), according to the date.
Rs 169b lost due to post production of milk losses
Time to cry over spilt milk ISLAMABAD: Pakistan has faced an annual loss of around Rs.169 billion due to post production losses of milk despite being included in the five largest milk producing countries of the world, say an official. The official said, the lack of infrastructure such as cooling facilities at farms or collection points as well as transportation of milk is the prime cause for the post production losses of the milk, which is being addressed through various development projects. However, Pakistan Dairy Development Company (PDDC) has made some significant contribution for improvement of the dairy sector for which provinces need to take up the responsibility for improving the dairy sector and devise sustainable strategy for cool chain development for reducing the milk losses. For the year 2011-12, the performance of livestock sector remained somehow satisfactory. The production of meat at 3,232 thousand tonnes exceeded its target of 3,056 thousand tonnes. Production of all beef, mutton and poultry meat exceeded their targets. The encouraging and remarkable performance consoled farming community struck by floods and failures of some other production sectors. The milk production at 38,690 thousand tonnes was below its target of 45,883 thousand tonnes. It is quite relevant to mention here that the contribution of livestock including poultry in total Gross Domestic Product (GDP) at 11.6 per cent and in agriculture GDP 55 per cent is quite significant. When farmers lose their expected income from crops due to floods and other epidemics, livestock proves itself a sustainable source of income to the poor masses. For the past many years livestock has emerged as largest single contributor to the agriculture. A growth rate of 4 per cent was achieved in recently ended financial year 2011-12 which was equal to the target. ONLINE
GLOBAL STOCKS, oil jump on US job gains, Europe optimism World stocks rallied, US oil jumped nearly 5 percent and the euro surged on news US employers increased hiring in July by the most in five months and on renewed optimism that Europe was closer to action on its debt crisis NEW YORK AGENCIES
Investors took a second look at Thursday’s statement by European Central Bank President Mario Draghi and concluded that help was on the way, even though it would take more time than many hoped. The U.S. jobs report showed stronger-than-expected hiring but also a rise in the unemployment rate to 8.3 percent, which keeps alive the hope of further support for the economy from the Federal Reserve. The jobs data came at the end of a volatile week, packed with Fed and ECB policy meetings that disappointed those hoping for more aid for the U.S. economy and Europe’s debt-stricken nations. The news dispelled some investors’ worst fears about the economy, said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. “People got very worried over the last weeks … but it looks like the U.S. economy is not falling off the face of the earth.” The euro rose as high as $1.2392 on Reuters data and was last up 1.6 percent at $1.2370. The dollar gained 0.5 percent against the yen, to 78.60 yen, after hitting a two-week high of 78.77, according to Reuters data. The ECB indicated on Thursday it may start buying government bonds again to reduce crippling borrowing costs for Spain and , but Draghi hinted that any intervention would not come before September. “A lot of market participants began to rethink yesterday’s ECB statement and look at it from a more positive perspective. overall, a lot of investors thought, ‘maybe it’s not as
‘Iran-Afghan trade ties up by 15%’ TEHRAN: The trade exchanges between Iran and Afghanistan have witnessed a 15% increase during the current Iranian year (started on March 20) compared with the same period last year, an Afghan trade official announced on Saturday. According to FNA dispatches, Head of the Industrialist Union of Afghanistan’s Western province of Harat Hamidallah Khadem made the announcement in an interview with Jomhor news agency. He further mentioned that the increase in the consulate services presented by Iran has encouraged Afghan traders to boost their trade exchanges with the Islamic Republic. Iranian Consul-General in Herat Rahim Mohammadi Yekta, for his part, voiced Iran’s willingness to purchase Afghanistan’s surplus production, including fruits as well as industrial products. NNI
Industry demands mark up into single digit bad as it originally sounded,’” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. Inched closer to seeking a sovereign bailout on Friday, but Prime Minister Mariano Rajoy said he needed first to know the conditions as well as the form any European Union rescue would take. The MSCI world equity index .MIWD00000PUS was last up 1.9 percent. European shares ended 2.5 percent higher. on Wall Street, the S&P 500 rallied to its highest level since early May. The Dow Jones industrial average was up 217.29 points, or 1.69 percent, at 13,096.17. The Standard & Poor’s 500 Index was up 25.99 points, or 1.90 percent, at 1,390.99. The Nasdaq Composite Index was up 58.13 points, or 2.00 percent, at 2,967.90. The Federal Reserve on Wednesday sent a stronger signal that a new round of major support could be on
the way if the recovery did not pick up. In the oil market, NYMEX September crude settled at $91.40 a barrel, jumping 4.9 percent, front-month crude’s biggest one-day gain since June 29. The unexpectedly strong U.S. jobs growth in July sparked upbeat sentiment on the oil demand outlook. Rose $3.04, or 2.87 percent, to settle at $108.94. Gold also climbed, with spot gold up 0.9 percent at $1,604.10 an ounce. U.S. Treasury prices fell as benchmark yields flirted with their highest levels in a month after a better-than-expected domestic jobs report spurred investors to reduce safe-haven holdings of U.S. government debt. Benchmark 10-year Treasury notes were 25/32 lower in price at 101-21/32 for a yield of 1.565 percent, up 9 basis points from late on Thursday. The day’s other U.S. data showed the pace of growth in the vast U.S. services sector edged up in July as new orders gained traction.
KARACHI: Trade and industry has demanded of the government to reduce interest rate in the forthcoming Monetary Policy by the State Bank of Pakistan (SBP). The Korangi Association of Trade and Industry (KATI) patron inchief S M Muneer, Chairman Ehtesham Uddin, All Karachi Industrial Alliance (AKIA) President Mian Zahid Hussain, Vice Chairmen, Hasham A Razzak, Tariq Malik and prominent industrialist Syed Johar Ali Qandhari said that SBP is scheduled to announce Monetary Policy on August 10, 2012 and Governor SBP Yasin Anwar should reduce bank interest significantly as mark up rate in Pakistan is still highest in the region. They said that due to high mark up rates in Pakistan industry is suffering badly and the volume of non-performing loans (NPLs) is increasing alarmingly. Muneer said that the State Bank of Pakistan (SBP) statistics revealed that an incremental of 10 percent or Rs 56.54 billion has been witnessed in total NPLs of banking industry during CY11 said a report. NNI
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Business 02 Lagging behind electronically ISLAMABAD ONLINE
INDIA’S ECONOMIC growth seen lower as rains play truant NEW DELHI
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NDIA’S economic growth could fall to near six percent this year with the country facing the spectre of its third drought in a decade, a top government policymaker says. In the last few months, the outlook for the once-booming economy has worsened, hit by government policy paralysis, steep interest rates, nosediving business confidence, the eurozone debt crisis and now growing worry of drought. “If we factor in that agriculture which will not be strong ... (growth) will be closer to six percent” for the fiscal year to March 2013, Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters in New Delhi. His forecast, delivered Friday, is down from the 6.5 percent expansion India notched up last
year, and far below the close to 10 percent expansion seen during a good part of the past decade. It comes comes as private economists also pare their growth estimates for Asia’s third-largest economy, citing concern about “deficient” monsoon rains that sweep India from June to September. A survey of economists and industry leaders by the Associated Chambers of Commerce and Industry of India, released Saturday, said the weak monsoon and a deteriorating global situation were expected to lower growth to 6.06.3 percent. The projected growth is far below the 7.6 percent expansion forecast for this year in the Congress-led government’s March budget. While around six percent growth is still much faster than most other countries, the left-leaning government says India needs much higher growth to lift the living standards of its hun-
dreds of millions of poor. on Thursday, the weather office said the monsoon rains were likely to be “15 percent deficient” — bad news for farmers with over half of India’s arable land lacking irrigation. If the rains do not improve, 2012 may turn out to be another drought year in India, which is one of the world’s biggest consumers and producers of food with its population of 1.2 billion, experts say. A drought is declared if rainfall is below 90 percent of average annual levels. The monsoon so far has been more than 20 percent below average. In 2009, India was hit by its worst drought in nearly four decades. The country also suffered a drought in 2002. Goldman Sachs economist Tushar Poddar expects even lower expansion, saying in a new note to clients he was revising down his growth forecast to 5.7 percent from an earlier 6.6 percent.
Only 25% low income countries process cash transfers electronically
only 25 percent of lowincome countries process cash transfers and social benefits electronically and this percentage is only slightly higher for public sector salaries and pensions, said Gaiv Tata, World Bank Director, Financial Inclusion Global Practice. He said this means that many governments are stretching limited resources, and spending more than they should on paying benefits and salaries. “Improvements that make government payment programs more efficient, safer and more transparent can cut related administrative costs by as much as 75 percent. As part of its commitment to helping governments modernize in this area, the World Bank is releasing “General Guidelines for the Development of Government Payment Programs”, which promotes best practices and establishes standards for developing and improving government payments programs. Millions of people in developing countries worldwide receive their salaries, benefits and pensions through government-toperson (G2P) payments. But in many cases, they are not being delivered in a cost-efficient way. The report focuses on cases such as Brazil’s “Bolsa Familia” social safety net program, where the government saved 75 percent on administrative costs by going electronic. Bolsa Familia easily brought universal coverage to 12.4 million low-income individuals, representing about 30% of the population below the poverty line. By providing beneficiaries with access to a payments account, G2P programs can also expand financial inclusion for millions of the unbanked by serving as their gateway to other financial services. Programs like “Bolsa Familia” provide a lifeline to low-income families so that they can spend on essentials such as food and education. More efficient government payment programs not only optimize government payouts, but they can also improve revenue generating activities. “It is estimated that government expenditures and tax collections, which make heavy use of government payment systems, amount to 15 percent-45 percent of the GDP,” explained Massimo Cirasino, World Bank Manager of Financial Infrastructure. “More efficient electronic payment systems not only save the government money, they can also potentially benefit taxpayers and all other users of electronic payments.”
India to Iran’s rescue? As Washington
CRUDE AWAKENING KUNWAR KHULDUNE SHAHID
throws in another sanctions curveball towards Tehran, ironically it is New Delhi that looks like being the emergency pinch-hitter
U
S President Barack obama, in a bid to muster in another foreign policy triumph in the lead up to the Presidential Elections, has pulled out new sanctions against Iranian oil. The sanctions “forbid” foreign banks from assisting Tehran in selling its oil by any means whatsoever, which, if Bloomberg is to be believed, cost the country around $133 million every day in lost revenues. Following the EU embargo which kicked in from July 1 this year, this is another move to tighten the screws on Iran’s uranium enrichment program designed ostensibly to give Tehran the nuclear wherewithal to wreak havoc in what is undoubtedly the most volatile region on earth. Even so, with the West refusing to play ball on the oil front, there are quite a few other players warming up in the ballpark: the emerging markets. New Delhi follows Beijing and Tokyo in offering insurance to the tankers that are transporting crude oil from Tehran. Indian Shipping Corp would begin services to Iran, with insurers from India vowing to five $100 million cover for each voyage along the lines of European companies that used to give unlimited insurance in case of spills, collisions and other risks. India is one of a dozen Iranian oil importers that have been “given temporary exemption” from the sanctions and is the third biggest purchaser of Iranian crude oil. Now with the insurance issues settled, MRPL (Mangalore Refinery & Petrochemicals Ltd), which is India’s biggest Iranian crude buyer, and other Indian processors can now fill in the oil void that has also exacerbated industries in C h i n a , South Korea and Japan.
The insurance settlement was extremely important because most of the oil tankers delivering oil to these countries were insured by Western companies – 95 percent of the tankers are insured by P&I Clubs which is a Londonbased group. The Indian hierarchy – and by that we mean Rajan Mathai and Jaipal Reddy, the respective Foreign Secretary and oil Minister – are adamant that New Delhi would only follow the sanctions that are imposed by the UN, and isn’t paying much heed to what Washington or Brussels have to say about the issue. This is an intriguing turn of events, for New Delhi hobnobbing with Washington has been pretty patent of late, and it would be a leaf out of Victorian irony, if it were India to come to Iran’s rescue as Washington vies to stampede on Tehran fiscal nerve-center. Furthermore, Hajara has also iterated that leading insurers – like United India Insurance Co and also General Insurance Corp – are set to offer lower cover for the ship-
ments from Iran when juxtaposed with what the European counterparts put on table. And the insurers are also going to offer a further $50 million for ‘hull and machinery cover’ and another $50 million for ‘protection and indemnity per voyage’, Hajara has claimed. So yes, India is pretty clear where it stands on the Iranian sanctions, as the emerging markets’ love-in with Tehran’s black gold looks likes giving Uncle Sam a mini-predicament in his quest to desiccate Iran’s oil supply to the world. India’s stance is of course great news for Iran, and even China, with the former looking for options to fill the export void created by last month’s EU oil embargo, and the latter knowing that it’s not alone in questioning the legitimacy of what are evidently unilaterally imposed sanctions. New Delhi giving Beijing reassurances, helping out Tehran, and threatening to estrange Washington: when exchequers cry out for some much needed influx, oil politics can throw in quite a few oddballs.
Sunday, 5 August, 2012