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Flour millers demand abolition of Ramadan packages KARACHI Staff RePoRt
The flour millers on Saturday demanded the federal and provincial governments to do away with billions of rupees Ramadan packages. The PML-N led federal government has announced in the budget speech Rs 2 billion subsidy on daily-use essential items during the holy month of Ramadan. The Sindh and other provincial governments also have traditionally been announced same untargeted subsidies. “This (package) is a sheer wastage of national resources,” Syed Zahoor Ahmed Agha, central chairman of All Pakistan Flour Mills Association told a briefing at Karachi Press Club. Flanked by the provincial chiefs of APFMA, Agha said the billions of rupees subsidy during Ramadan has largely been subject to corruption by the food department officials, Utility Stores and other concerned across the country. “This package benefits everybody but the common man,” said the miller demanding that the governments, central and provincial, abolish the subsidy and adjust it in a way that it could lessen the burden of deserving people throughout the year. Calling for the appointment of honest food ministers in all four provinces, the millers said food departments had badly been plagued by corruption. “Receipts under fictitious heads, provision of sand-mixed and substandard wheat are matter of routine in the food departments now,” they claimed. Agha also demanded of Balochistan government to lift a ban under 144 on the transportation of wheat into the province from Punjab and Sindh. The embargo had left the flour mills in the province short of wheat, said Agha. “These bans are being misused as only those vehicles are allowed that bribe the officials concerned,” the flour miller alleged. If this situation continued the province would soon witness a drought as wheat price in the open market had already peaked to the highest level, warned Agha. The APFMA officials also demanded that the association’s respective provincial chief be taken onboard while the provincial governments make their wheat policy.
US, Pak business leaders emphasize huge investment opportunities WASHINGTON
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I G H L I G H T I N G Pakistan’s tremendous economic potential and robust performance of its capital markets, a delegation of Karachi Stock Exchange told American investors they stand to gain from business prospects the South Asian country of 180 million people offers. Muneer Kamal, Chairman, Karachi Stock Exchange and Nadeem Naqvi, the KSE Managing Director, spoke to a gathering of US-Pakistan Business Council, as Pakistani and American business leaders discussed ways to strengthen bilateral trade, economic and investment cooperation. Senior US and Pakistani diplomats including Ambassador Robin Raphel, Advisor to the Special Representative on Pakistan and Afghanistan and Charge d’ Affaires at the Pakistani embassy in Washington Dr Asad M Khan vowed to facilitate private sector collaboration between the two countries. According to a presentation made by
the KSE leaders, Pakistan had lower rapid telecom and media penetration volatility than 82% of nations around the across the country. Pakistan, they said, is the 25th largest globe, including the United States. “Over economy in the world and has the five years, Pakistan’s risk ad7th largest labour force, and justed returns ranked recorded a 4.8% average eighth in the world. Over GDP growth in the From January to last decade. May 2013, five years, Moreover, the KSE-100 has Pakistani econrisen by Pakistan’s risk adjusted omy withstood 25%, the impact of best perreturns ranked eighth in the global finanformance world. From January to May cial crisis, devin emergastating floods ing Asia, 2013, KSE-100 has risen by in 2010/11 and while over negative reperthe last 25%, the best performance in cussions of the e l e v e n Afghan war. months it emerging Asia, while over The large has risen by agricultural sector 52%.” the last eleven months it accounts for 25% of The delegahas risen by 52% GDP but 60% of emtion informed the ployment while private American entrepreconsumption makes up about neurs that despite a mix of 75% of GDP. challenges, underlying fundamenIn view of the strong growth potential, tals of Pakistani economy remain strong with a large and growing middle class vast market and talented workforce, they consumer base rise in rural incomes, and also apprised the American and Pakistani-
KCCI for comprehensive Islamic financial system in country KARACHI Staff RePoRt
The absence of a comprehensive Islamic financial system with Shariah-based financial services would hinder the development of Islamic banking and finance in the country. This was stated by President Karachi Chamber of Commerce and Industry (KCCI) Muhammad Haroon Agar. He said over the years, growth and turnaround in the country’s banking sector had been unprecedented. The profitability of banks had risen to an exceptional level, credit was fairly diversified and bankwide system risks were well-contained. He was exchanging views with the President and CEO Burj Bank Ahmed Khizer Khan who visited KCCI Saturday along with Baqir Hussain, Head of External Relations, Burj Bank. Agar said Islamic banking and finance initially had evolved as a form of financial inter-mediation
for the Islamic community to conduct financial transactions that conform to Islamic tenets. Haroon Agar stated that today, the Islamic financial industry has gained wider acceptance and appreciation and has expanded beyond the traditional borders of the Muslim-based economies into the major industrial economies to become an integral component of the global financial system. Although Islamic finance is at emerging stage of development in Pakistan, it has experienced rapid expansion and is fast developing as a viable and robust form of financial intermediation with significant potential. President KCCI said that for Islamic Banking and Finance to be sustainable, compliance with Shariah principles alone is not sufficient. Over the long run, customers and businesses demand for quality in the products and services that Islamic finance offers. This is the challenge for Islamic banking and finance, to be able to provide a
comprehensive range of Islamic financial products and services that are not only innovative and competitive but Shariah compliant. He also invited the President of Burj Bank for participation in the Financial Pavilion of the KCCI’s 10th MyKarachi Exhibition 2013 scheduled in July 2013. President and CEO of Burj Bank Limited Ahmed Khizer Khan recognized the role of Karachi Chamber of Commerce & Industry in the socio-economic development of Pakistan and expressed gratitude to President KCCI for providing an opportunity to apprise about Burj Bank. He stated that the Burj Bank aims to provide innovative and efficient Islamic banking solutions to exceed customers’ expectations and optimize shareholders value. He stated that Burj Bank was offering various Shariah compliant products and was expanding its operations across Pakistan. Presently, 75 branches were operating countrywide.
American entrepreneurs of the expansion in the middle class income in the years ahead. Charge d’ Affaires, Dr Asad thanked the US-Pakistan Business Council for promoting trade and business linkages between Pakistan and the United States. He drew attention of the business gathering to some of the ongoing positive developments in Pakistan, which will have far-reaching impact in terms of political and economic stability of the country. Firstly, he said, Pakistan is witnessing a momentous institutional and democratic consolidation. Secondly, there is a desire in Pakistan to seek peace, stability and normalization of relations in the region. Thirdly, Pakistan is keen to build on the positive momentum in terms of our relations with the United States. The new government of Prime Minister Nawaz Sharif has reiterated its commitment to fostering good relations with the United States and sees promise in bilateral relations. In her remarks, Ambassador Robin Raphel touched on efforts the US administration is making with regard to encouraging trade and economic ties between the two countries.
PML-N burdening masses, going back on commitments: IWCCI ISLAMABAD INP
Founder President Islamabad Women’s Chamber of Commerce and Industry (IWCCI) Samina Fazil on Saturday said budget has proved to be a huge disappointment for the people. Masses were anticipating some relief in the budget but it inflicted misery and destabilized financial plans of the households which has shattered the faith of the masses in the leadership of PML-N. Speaking to female entrepreneurs, she said that the negative impact of the budget has started hurting masses, especially the poor and middle class. The government has burdened the common man while going back on its commitments, she said. Samina Fazil said that the budget is based on expectations while ambitious target will further weaken the private sector and choke growth. “Giving FBR access to the banking system will promote informal banking, corruption under invoicing and depression among the business community,” she observed. Speaking at the occasion, Dr Murtaza Mughal said that circular debt can only be tackled if the energy mix of the country is improved. The government’s education system remains dysfunctional while economic managers have made learning more costly which will hurt low and middle income groups, said Dr Mughal. This decision to impose taxes on private schools will augment dropouts and increase the number of child labour as poor parents will see no point in education. Budget is discriminatory to all the people of Pakistan except less than one per cent elite, he observed.
Is LNG the aNswer? Crude AwAKening
Kunwar Khuldune Shahid
By completely ignoring the Iran-Pakistan (IP) Pipeline in this week’s budget announcement, this government has followed in the footsteps of its predecessors by using IP as a smokescreen for doing the square root of zilch on the energy front – or so it would seem. With the UN and US sanctions looming over the
pipeline, the cons beat the living daylight out of the pros on the IP front. However the million – rather the two billion – dollar question is, what is being doodled on the Islamabad drawing with regards to answering the energy - and more specifically the gas – question? IP’s alternative was always thought to be the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline, but with the A in TAPI being the biggest concern, that project doesn’t seem like being materialised any time soon – if at all. Any gas pipeline from the opulent Central Asian zone would need to traverse the volatile North of Afghanistan, before it enters Pakistan, while any commercial activity with Iran is accompanied with the dreaded “S” word. Petroleum Policy 2012, and the new prices for foreign excavating firms, would result in an increase in exploration activities, but that process would take a lot of time, and we need a short-term solution to the gas troubles.
With pipelines seemingly being buried under the political pressure and terroristic threat, there seems to be only one feasible way of importing gas without ringing any global alarm bells: LNG. I was fortunate enough to have a little chat with renowned political scientist, game and economic theorist Farrukh Saleem on Friday and his take on IP’s exclusion from the budget was pretty interesting. In addition to the sanctions and the fact that we have no money to import IP gas at $15 per unit, he categorically stated that pipelines are a thing of the ‘60s and ‘70s. When one considers the volatility in the region, pipeline construction does seem like being too much of a risk for the government to take. And hence it is actually the construction of LNG terminals that supersedes the construction of pipelines in terms of feasibility in our neck of the woods. LNG, liquefied natural gas, is a conven-
ient and useful means of transporting natural gas over long distances and purpose built ports are terminals exclusively built for LNG import. LNG imports in Pakistan are scheduled to kick-start this year with the government expecting to import around 2bcm (billion cubic metres) of LNG this year. This gas would be acquired on the spot market and would be received at Port Qasim. With discussions already going on with the US and Qatar regarding LNG import, international supply contracts are said to be allocated for around 8bcm in the near future. And if the recent noise being generated in the Petroleum and Natural Resources ministry is anything to go by, newly appointed Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi seems to be pretty keen on LNG import. Recent developments reveal that we are also having talks with India regarding import
of 400 million cubic feet of gas per day, through a pipeline being built from Jalandhar to Wagah via Attari. LNG will be gasified by the Indian side, and then pumped into the pipeline. However, with so many other bones of contention between the two countries, this would be another pipeline constructed under the backdrop of political ramifications – just like most other bilateral or multilateral pipelines. The safest option for the time being does seem like LNG import, and the government needs to focus on constructing more LNG terminals to facilitate the import. Performance on the energy front is what this government is going to be judged on five years from now, and LNG import would be a good path to start taking baby steps on. The writer is Energy & Correspondent, Pakistan Today
Finance
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CHiniOT: women buy stuffed toys from a roadside vendor. INP
IMF criticises US spending cuts
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HE International Monetary Fund has assailed US government spending cuts as “excessively rapid and illdesigned” as it cut the economy’s growth forecast for 2014. Warning that the country still faces downside risks to its recovery, the IMF cheered the Federal Reserve’s stimulus efforts and urged Congress to help firm up growth by repealing the severe “sequester” budget cuts. In its annual report on the US economy, the IMF said growth would be only 1.9 percent this year, due to the sequester’s impact, when it had the potential of growing as much as 1.75 percentage points faster. For next year, it lowered its forecast made in April of 3.0 percent to just 2.7 percent. “We had assumed that the sequestration would be phased out,” when the prior forecast was made, said IMF Managing Director Christine Lagarde. But the Fund no longer makes that assumption, with political parties still deadlocked over how to cut the budget deficit and debt burden over the medium term. That means that, after $85bn for the March-September period, another $109 billion has to be pared from fiscal 2014 spending. ‘Heavy toll’ The Fund called on Congress to revoke the sequester, saying that stronger growth in the short term is important both for the US and global economies. “The automatic spending cuts not only exert a heavy
toll on growth in the short term, but the indiscriminate reductions in education, science, and infrastructure spending could also reduce medium-term potential growth,” the IMF said. The sequester cuts for this year have had one beneficial outcome, cutting the fiscal deficit by a huge 2.5 percent, according to the report. But that is likely too much in a short period. “The deficit reduction in 2013 has been excessively rapid and ill-designed,” it said. “A slower pace of deficit reduction would help the recovery at a time when monetary policy has limited room to support it further.” Fiscal imbalances Despite encouraging a looser fiscal stance now, and despite the narrowing of the fiscal gap, the IMF still warned that Washington needs to do more to address its longer term fiscal imbalances. With the economy picking up, gross US government debt was projected to peak at 110 percent of gross domestic product in 2015 and start to decline. “But the longer-term debt profile remains unsustainable,” the report said. “Despite the slowdown in growth rates over the past few years, spending on major health-care programs and Social Security, absent additional reforms, is expected to increase by two percentage points over the next decade.” That will cause the deficit to begin widening and start pushing the debt ratio back up. It suggested fundamental tax reforms as part of actions to confront the longer term fiscal shortfall, including eliminating many exemptions and loopholes, and introducing a value-added tax and a carbon tax.
LAHOre: Muhammad Ali, Muhammad Musadaq, Sheikh naeem and Awais Musadaq at the launch of urban Sole’s new design for Pierre Cardin. Staff PHoto
rayyan air to commence direct air service between Islamabad, Kashgar ISLAMABAD oNLINe
Captain Fateh Sher Bhatti, Chief Executive Officer of Rayyan Air, on Saturday said that Rayyan Air is going to commence direct air flights between Islamabad and Kashgar city of China. During a visit to the Islamabad Chamber of Commerce and Industry, Fateh said first flight from Islamabad to Kashgar will fly on June 26. Initially the frequency of flights will be one flight in a week on every Wednesday and in due course of
time, the flights would be increased to two flights per week. Capt FS Bhatti said that Kashgar Administration has assured support to Rayyan Air for launching the air service with additional concessions and streamlined procedures for this purpose. He was of the view that launching of direct flights between Islamabad and Kashgar would provide benefits to Pakistan and China. He said Kashgar is emerging as one of the largest Special Economic Zones in the world and direct air service between Pakistan and Kash-
gar would open many new avenues of trade, exports, investment and joint ventures between the two countries. He thanked President ICCI for encouraging this initiative and affirmed to work with ICCI to facilitate Pakistani businessmen in increasing trade and commercial activities between Pakistan and China. Speaking on the occasion, Zafar Bakhtawari, President, Islamabad Chamber of Commerce & Industry (ICCI) greatly appreciated the initiative of Rayyan Air for starting air service between two important cities of Pakistan and China.
FPCCI presents economic revival plan for Balochistan
Regional integration key to economic development, says Pak envoy to Germany
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Vice President Mir Naveed Jan Baloch on Saturday met with Balochistan Chief Minister Dr Abdul Malik Baloch and presented a four-point economic revival plan for the province. Naveed Jan led a delegation of the business community comprising Raheem Zafar, President of the Gwadar Chamber of Commerce and Industry; Qazi Ghulam Rasool, former president of the Anjuman-e-Tajran Balochistan and Shahab Zafar, Executive Committee Member of the Gwadar Chamber of Commerce and Industry. In his revival plan for the economy of Balochistan, Naveed Jan Baloch emphasized the following four priority areas: improvement of regional trade, livestock and fisheries, the mining sector and agriculture. He said that if the Gwadar-Ratodero road is built then Balochistan’s link with Punjab and China will become very easy. Another important road that has to be built is Gwadar–Noshki road which will connect all mineral rich areas of Balochistan with Gwadar. He said that currently the distance from Noshki to Karachi port is approximately 1,100 kilometres, with the construction of Gwadar-Noshki road the distance will be cut down to half. He said that Balochistan has borders with Iran and Afghanistan. Currently there are four borders with Iran out of which only Taftan is open for trade and immigration. He proposed that the other 3 borders of Balochistan which are Gwadar, Panjgur and Mand be opened as well for trade. Similarly, With Afghanistan, Noshki district border should also be opened, he said. Staff RePoRt
BERLIN: Pakistan attaches immense importance to its relations with its neighbouring countries as regional economic integration through enhancing all-encompassing connectivity will benefit all regional countries. This was stated by Pakistan Ambassador to Germany Abdul Basit while giving talk on “Reviving the Spirit of the Silk Road: Pakistan and the Region”, organised by the Geographic Society of Berlin on Saturday. Basit said that the relevance of these ancient routes had not diminished over the period of time rather had grown, though the realities on ground had drastically changed. Today, these routes hold the prospects of not only modern trade-ways but also to build better understanding among different cultures and religions, he added. Pakistan supported the international initiatives for the revival of ancient silk routes and had already embarked upon several mega projects. A rail link from Kashgahar to Gwadar would open even new economic opportunities for increasing economic integration in the region. Pakistan fully supported CASA 1000 and Turkmenistan-AfghanistanPakistan-India Gas Pipeline (TAPI), he observed. Referring to Afghanistan, Basit said that three decades of political instability and two long wars in Afghanistan have badly affected the socio-economic development of Pakistan and Afghanistan. Long term solution to the Afghan problem lies in its economic prosperity and development of positive stakes within the region, he concluded. Earlier, President of the Society Prof Dr Hartmut Asche gave an overview of the historical importance of Silk Routes and informed the audience that the term Silk Road (Seidenstrasse in German) was first coined by a German geographer and former President of the Geographical Society, Prof. Fordinand Freihrr Von Richthofen in 1877. INP