PRO 15-11-2012_Layout 1 11/15/2012 12:45 AM Page 1
Thursday, 15 November, 2012
From Russia, with suggestions
‘LNG import deal unworkable’ ISLAMABAD
Russia claims absence of direct links impede trade with Pakistan g Sees ‘good prospects’ for a PTA with Pakistan g Demidov says Russian mission can prepare feasibility study g
KARACHI
T
ISMAIL DILAWAR
RADE relations between Russia and Pakistan may face a set back as Moscow is feeling the heat of the long absent direct sea, air and banking links with Islamabad, something Russians believe are hindering mutual trade. Russia sees “good prospects” for the initiative as the traders and industrialists in Pakistan urge the need for a Preferential Trade Agreement (PTA) between the two countries to promote bilateral trade ties. “(The) unavailability of direct shipping-lines, airlines and banking channel are major obstacles impeding bilateral trade,” said Andrey V. Demidov, Russian Consul General during his visit to the Karachi Chamber of Commerce and Industry (KCCI) on Wednesday. At the Chamber, Demidov met KCCI President Muhammad Haroon Agar, Senior Vice President KCCI Shamim Firpo, Vice President Nasir Mehmood, Former President KCCI Majyd Aziz and members of the Chamber’s managing committee. The Russian consul general said good prospects for Pak-Russia PTA existed. “Russian Mission can prepare feasibility study on PTA as deliberations are required on certain legalities,” he added. Demidov viewed that to execute transit trade from Gawader Port, adequate infrastructure, railways, highways and bridges
were essential. He recalled that in early ‘90s PIA operated to Moscow and the restoration of such direct air-connectivity was important. “In past, PIA also used to stopover to Moscow while going to UK, while Russian Airline may stopover Islamabad or Karachi while going to UAE which can provide opportunity to visitors of both countries for interaction,” observed the Russian consul. Citing Pakistan Steel Mills (PSM) as a good example of past cooperation between the two countries, he said similar cooperation could be extended in many areas, particularly in energy as Russia was number one in the energy sector. About the postponed visit of President Vladimir Putin to Pakistan, Demidov said upon his visit various MoUs and cooperation documents would be signed between the two countries.
Seeing a huge demand for Pakistani textiles and leather garments in Russia, he said Pakistan could also export potato, rice, vegetables and fruits to his country. “Russia is manufacturing helicopters and commercial jets which can be provided to Pakistan. Pakistani natural pharmaceutical products have immense demand in Russia,” he said. Demidov said multilateral cooperation in several areas, between Pakistan, Russia andCentral Asia Republics, was also workable. Bilateral cooperation in education was continued and Pakistani students could also avail Russian scholarships programmes, said he. During talks with Demidov, KCCI President Muhammad Haroon Agar urged Islamabad and Moscowto expedite their arrangements leading to the signing of PTA. Agar noted the dire need of Pak-Russ-
ian inter-governmental arrangements to develop direct shipping and air links as well as establish banking channels to multiply bilateral trade. He said during the last 64 years Pakistan’s economic relations had largely been American and west oriented with aid being its main focus instead of easing market access, transfer of technology and investment. Recalling Pak-Russian cooperation in the past, the KCCI president emphasized that the two countries should replicate their past cooperation on the lines of PSM in areas like heavy machinery, engineering, automobiles, revamping railways, energy from coal, corporate farming, mining, health, education and others. Agar said with the multilateral cooperation of Central Asian Republics, Russian trade could be facilitated from Pakistani ports to other countries. On the occasion, Former KCCI President Majyd Aziz hoped that Putin’s visit to Pakistan would open new chapters of bilateral relations. Aziz said to cater national transportation requirement, particularly for cargo movement, Pakistan should also benefit from Russian automobiles particularly, trucks and heavy vehicles used in logistics. A paradigm shift is required from trade of commodities to machinery and equipment, he said adding that Russian investors could invest in Special Economic Zones and construct their own enclaves as President of Pakistan had signed the Special Economic Zones Bill.
ECC may allow additional export of 0.2 mt sugar ISLAMABAD ONLINE
The Economic Coordination Committee (ECC) of the Cabinet scheduled to meet on November 20, is expected to allow additional export of 0.2 million tons sugar. Last month, the apex economic decisions making body had also allowed 0.2 million tons sugar export. According to Pakistan Sugar Mills Association (PSMA), the permission for further export of 0.2 million tons sugar will go a long way to improve the financial positions of the mills and payments to sugarcane cultivators. According to the agenda items available with Online News agency, the ECC will consider the summary of Commerce Ministry which has sought the export of
0.2 million tons sugar in addition to 0.2 million tons allowed earlier. The committee will also take up the ministry of Industry’s summary in which they (ministry) sought the waver of sales tax at import stage on the import of Swede bus Pakistan. Following a resolution passed by the National Assembly, the Economic Coordination Committee of the cabinet is also expected to give a go-ahead to switch to a monthly oil pricing mechanism as the Ministry of Petroleum and Natural Resources will table the summary before the committee for its approval. The controversial weekly price review mechanism was also suspended by the government after giving an undertaking in the Supreme Court last month. The government has also been seen
to repeatedly ignore the continuous recommendations of the National Assembly Standing Committee on Petroleum and Natural Resources and the Oil and Gas Regulatory Authority (OGRA) to switch to the old oil pricing mechanism. The Ministry of Finance and OGRA had already opposed to the price review on a weekly basis when the summary was first tabled before the ECC for approval, but their concerns were not addressed. OGRA was of the view that the current price review was being exploited by refineries, oil marketing companies and hoarders. Flag protection of National shipping line, report on implementation of cabinet decisions and the review of economic indicators were also included in the agenda items of the upcoming meeting of Economic Coordination Committee.
ONLINE
Pakistan Economy Watch (PEW) on Wednesday said that recent deal to import Liquefied Natural Gas (LNG) from Qatar is unfeasible. The import agreement signed recently with Qatar is not practical as Pakistan lacks infrastructure to import LNG, it said. Government has been trying to import LNG since years during which billions were spent on studies, hiring of experts, foreign tours and road shows disregarding the fact that Pakistani ports cannot host any LNG vessel, said Dr. Murtaza Mughal, President PEW. Depth of water at Port Qasim and Kemari is 39 feet while the average depth of a loaded LNG carrier in the water is 45 to 48 feet. The lightest LNG ship scarcely available is that of fifty thousand tones with 42 feet draught that cannot serve the purpose. Dr. Murtaza Mughal said that before planning to import LNG, government should have initiated dredging (excavation activity to enable waterways navigable) which will cost 40 million dollar and take two years minimum. Moreover, there is no degasification facility available in Pakistan which will take 24-30 months to be in place if work on it is initiated today, said Dr. Murtaza Mughal. He added that country will also need a 50 km pipeline to connect degasification facility with SSGC main pipeline which will also require two years’ time and 30 million dollar in costs.
NBP to put Railways on track Agrees to provide Rs 6.1bn loan to Pakistan Railways LAHORE: National Bank of Pakistan (NBP) will provide cash-strapped Pakistan Railways a Rs6.10 billion-rupee loan to revamp its depleted fleet, media reports said on Wednesday. According to the sources, an agreement to this effect has been reached between the National Bank and PRACS – a subsidiary of Pakistan Railways. Under the agreement, the NBP will provide the funds in one-go but the loan amount will be payable in the next five years carrying a mark-up of 10.45 percent per annum. During the first two years, Pakistan Railways will only pay the mark-up after every six months whereas in the next three years Railways will also be liable to payback principle amount along with the mark-up. The loan will be used for repair and maintenance of Railways engines. ONLINE
ADB touts disaster prevention as key to fiscal progress Says investments in disaster risk management essential to sustaining growth and reducing poverty ISLAMABAD ONLINE
The growing incidence of natural disasters in Asia and the Pacific—where four of five cities globally classified as at extreme risk are located—threatens to undermine seriously rapid economic progress, calling for a much stronger focus among governments on disaster prevention. This is revealed in a new study “Independent Evaluation at the Asian Development Bank. “We have thought for too long that natural disasters come and go, that they are just an interruption to development, and that they can be dealt with after they strike,” says the Director General of Independent Evaluation, Vinod Thomas. “However, there is growing international recognition that the incidence and impact of natural disasters are increasing be-
cause of persistent poverty, population growth, and climate change.” In its review of ADB’s disaster-related projects and programs, the study notes that disaster prevention accounted for one-third of investment, compared with two-thirds spent on disaster recovery. Yet, by some measures, one dollar invested today in reducing disaster risk saves at least four dollars in future relief and rehabilitation costs. The independent evaluation study finds that ADB’s disaster-recovery projects have been much more successful than ADB-supported projects overall. But many of them had the limited objective of restoring particular types of infrastructure, rather than rehabilitating livelihoods, or increasing disaster resilience. So far, very few countries have focused on the disaster risks in their economic development plans. Member country govern-
ments and ADB must do more to highlight the need for investment in disaster prevention, not just in infrastructure, but also in relation to social development. During 1995–2011, ADB provided
funding of $10.37 billion for 264 natural disaster interventions, including 104 loans for $8.55 billion. A special review of ADB’s disaster response programs in Bangladesh, Indonesia, and Pakistan finds several areas where ADB and the rest of the development community could improve both disaster response and preparation. In Bangladesh, for example, ADB has been efficient at renovating damaged roads and bridges. But it can support the proactive and successful disaster management programs the government has implemented. These programs have dramatically lowered deaths in this disasterprone delta-region caused by regular, powerful cyclones. In a storm in 1997, for example, 111 were killed in contrast with 300,000 people in a similar storm in 1970. Another lesson learned in the earth-
quake-tsunami response is the hugely complex needs such disasters create. “You cannot simply rehabilitate roads and bridges and then build temporary shelter. Often, poverty, gender, ethnic issues, property rights and other problems compound the difficulties and require much greater attention and capacity for response from the development community,” says Tomoo Ueda, Principal Evaluation Specialist and the main author. In Pakistan, where the country’s defense forces have gained respect for their disaster response, there is significant need for greater support for civil disastermanagement institutions, such as the National Disaster Management Authority. “Throughout the region, we must recognize that investments in disaster risk management are an essential means to sustaining growth and poverty reduction,” says Thomas.