PRO 19-04-2012_Layout 1 4/19/2012 2:55 AM Page 1
Wall Street eases on IBM, Intel; Chesapeake slumps Page 02
profit.com.pk
Thursday, 19 April, 2012
COMMENT
NOT THAT BOTHERED
India NTB about enhancing trade
When inflation intends to stay
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Local exporters still face multitude of non-tariff barriers Integrated check-post; loads of hype, little end product 10-wheel, 40-tonne Pakistani trucks restricted, scanners not functional g
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LAHORE
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IMRAN ADNAN
espite opening of special trade gate at Wagha Border and tall claims of liberalising bilateral trade with india, local exporters are facing multiple nontariff barriers (NtBs) imposed by india in way of pakistani exports, pakistan today observes. pakistani exporters point out that the much talked about trade gate (integrated Check post) was opened at Attari on April 13, which encouraged the bilateral trade between two neighbours. But the indian government had restricted the movement of pakistani trucks by imposing ban on trucks having more than 10 wheels or 40 tons loading capacity. speaking to pakistan today, local exporters highlight that indian government has halted the movement of all pakistani trucks having loading capacity of more than 40 tons with a stroke of pen, which resulted in that a number of pakistani trucks having
loading capacity of more than 80 tons has stuck up at Wahga Border. they further point out that even after the delayed opening of trade gate, truck scanners installed at integrated Check post are not functional that created another hurdle in the way of pakistani exports to india. they believe that despite all government claims at both sides of the border, environment at Wahga Border is not conducive for business and trade as infrastructure is not efficient enough to handle the increased volumes of trade. pakistani is primarily exporting cement and gypsum to india through Wahga Border, but industry pundits in these sectors are also unhappy with the trade facilities on the other side of border. Cement industry gurus underscore that cement is one the major commodities that is abundantly available in pakistan and can be exported to india through this land route. But, most of the available transportation for cement has a loading capacity of more than 40 tons. they said availability of 10 wheeler trucks with a loading capacity up to 40 tons for cement
WHEAT PROCUREMENT
Harvesting hope Rs 209b required to procure 7.72MT wheat g Procurement to start on April 20 g Punjab needs Rs105.3b, Sindh Rs34.125b, KP 8.53b and Balochistan Rs2.62b g
ISLAMABAD
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ONLINE
sum of over Rs 209 billion would be required for procurement of targeted 7.72 million tons (Mt) of
wheat this year, well-placed sources told Online on Wednesday. the wheat procurement campaign on part of the federal and provincial governments for the year 2012-13 would formally start from April 20. Harvest of the country’s gold crop
is limited and this restriction will increase the transportation cost for not only cement but also for other commodities as well, resulting in the cement industry being unable to compete in india, they underlines. they further points out that indian authorities have already imposed numbers of NtBs, like license restriction, lack of infrastructure, etc., due to which cement industry is unable to perform. Now, another non-tariff barrier shall not help the industry to increase its exports and earn much needed foreign exchange for the country resulting is huge balance of trade deficit in favour of india. Official data available on the website of All pakistan Cement Manufacturers Association (ApCMA) shows the cement exports to india were around half million ton during 2011-12, while industry experts believed that once all NtBs were removed, pakistani exporters could swell cement exports to five million tons. Cement exporters point out that despite opening of separate trade gate only two 10-wheeler trucks loaded with cement
could cross border so far, while various cement consignments are waiting to cross border. this whole situation clearly indicates the infrastructure position, they added. A cement exporter on the condition of anonymity disclosed that earlier pakistani exporter had to bribe indian officials to get their consignments Customs cleared and unloaded in india and for that purpose they had hired indian to negotiate with local authorities. He pointed out that cement manufacturers lobby in india was so powerful that it influence its government department to delay pakistani exports, which ultimately increases export cost and made pakistani merchandise uncompetitive. He further revealed that indian government officials were so clever that they received bribe from both indian and pakistani businessmen on pretext of stopping or expediting release of merchandise. these all NtBs create hurdles of pakistani exports, he concluded.
has already started in low lying sindh and would commence in major wheat producing province punjab. According to the sources, four provinces in addition pakistan Agriculture storage and services Corporation (pAssCO) are busy making financial as well as logistics arrangements to ensure timely procurement of the grain of everyday consumption. “in punjab, farmers have cultivated wheat on 16 million acres aiming at produce of 19.2 million tons,” the sources said. “Likewise, sindh cultivated 2.5 million acres for target of 3.2 million tons’ production”, the sources added. According to the sources, punjab would require Rs. 105.300 billion to procure target of 4 million tons of
wheat. similarly, sindh to procure 1.3 Mt would need Rs 34.125 billion. Khyber pukhtunkhwa and Balochistan are looking for Rs 8.53 billion for 0.325 million tons, and Rs 2.62 billion to procure 0.100 Mt of wheat, respectively. At the same time, the federal government outfit pAssCO would be procuring a couple of million tons of wheat at the estimated cost of Rs 59 billion. “in this regard,” the sources added, “pAssCO has established 220 centers in 11 zones across the country to start its wheat procurement campaign for the year 2012-13.” Meanwhile a punjab government official told Online that the province would borrow the loan of Rs. 92 billion form the Bank of punjab for
sK any academic, policy maker or politician even remotely associated with economics about the one, sure kiss of death for a stagnant economy struggling with unemployment and the answer will be near about unanimous – inflation. And when M2 money creation outpaces GDp growth by 4-6 percentage points, Cpi is invariably on the verge of becoming the ‘un-bottled evil genie’ graduation text books warn of. And when almost all of that money has gone to government borrowing, as opposed to private sector offtake, the result is almost always disastrous. seeing as the only mega event to follow the budget will be the next general election (barring the unforeseen), the economic buildup following a supposedly people friendly budget does not seem encouraging for the incumbent government. it’s interesting that the state bank should attribute the poor state of affairs to “fiscal indiscipline” in islamabad, especially while its printing presses run overtime to feed unbelievable government addiction to debt. Add to that its inability to treat commercial banks’ chronic risk aversion, and its failure to channel greater liquidity towards private sector investment, and it comes out weak on both monetary stability and overseeing the banking sector. simply put, islamabad is bankrupt, and its aid lifeline is weakening, swelling a debt bubble that has already become unsustainable. there’s no doubt the finance ministry realizes what must be done urgently. Rising prices must be matched by increased production, and employment, otherwise the money multiplier will devastate the middle income group, further driving down productivity, and national income. However, for some time now we’ve seen both fiscal and monetary authorities paralysed when confronted with problems that can and will assume existential proportions if not checked. if inflation continues, and debt builds, and aid dries, and fiscal leakages continue, there are far worse times ahead.
wheat purchase. “Any grower applying for gunny bags will be entertained for maximum 200 jute bags or 400 polyethylene bags once during the first 15 days of procurement at the centre,” the official said. earlier, the federal government had set the procurement price at Rs 1,050 per 40kg along with Rs 7.5 per 100 kg wheat as delivery charges. Online broke the story a fortnight back that the government has fixed 24.2 million tons as overall production target for the current year. this year’s target is 0.8 million tons short of the last year’s total yield of 25 million tons. the federal government has also estimated annual requirement of wheat across the country to the tune of 24 million tons.