PRO 24-08-2012_Layout 1 8/24/2012 1:05 AM Page 1
Friday, 24 August, 2012
EXPANDING THE PATH TO RECOVERY nHa to spend rs 8550.425m on widening of n-45 ISLAMABAD
T
APP
HE National Highway Authority plans to spend Rs 8550.425 million on improvement and widening of NowshehraChitral Highway (N-45). “Improvement and widening of Chakdara-Timergrah-Dir-Chitral (141 km) section” is a new project which will complete left over sections of the project “improvement of N-45 for dualisation, rehabilitation and reconstruction, which was undertaken in 2006 at the cost of Rs 2399 million,” a source in the Ministry of Communications told APP on Thursday. Regarding the new project global PC-I worth Rs 9202.488 mln was discussed by Central Development Working Party (CDWP) in October 2011,
BERLIN AFP
Giving Greece more time to implement necessary structural reforms and austerity measures would not solve its severe problems, German Finance Minister Wolfgang Schaeuble told public radio on Thursday. “More time is not a solution to the problems,” Schaeuble told SWR radio. “More time would, in case of doubt, mean more money” and the eurozone had already gone to its very limits in hammering out the deal with Athens last year, the minister argued. It was not an issue “of being more generous or less generous” but about finding a way for the eurozone as a whole to regain the confidence of the fi-
which was recommended with revised scope of work with rationalized cost of Rs 8550.425 million, he said. The Takhtbai flyover project was also included in the PC-I of the project, he added. However, the commencement of work on the project, he said, depended on the approval by ECNEC and allocation of funds. A durable and effective communications infrastructure is very important for the promotion of trade, tourism, industry and agriculture in Swat and Malakand areas and the Ministry of Communications is carrying out
construction activity on priority basis in these areas where people have suffered great hardships, he added. FOURTH SECTION OF N-50 TO BE COMPLETED NEXT YEAR: The National Highway Authority (NHA) has completed work on three sections of road from Khanozai to D I Khan via Muslim Bagh, Qila Saifullah and Zhob (N50) while the fourth section will be completed by May next year. The NHA has undertaken work on five sections of N-50, including Kuchlac-
Not a solutioN More tiMe for Greece ‘not a solution’: Germany’s schaeuble nancial markets, Schaeuble argued. In a newspaper interview Wednesday, Greek Prime Minister Antonis Samaras called for more time to make spending cuts and reforms to unlock funds to keep the debt-wracked country afloat. “All that we want is a little ‘breathing space’ to revive the economy quickly and raise state income. More time does not
automatically mean more money,” Samaras told the German daily Bild ahead of talks with Chancellor Angela Merkel in Berlin on Friday. As part of a rescue package with its international creditors, Greece has committed to slashing some 11.5 billion euros ($14.2 billion) from spending over two years from 2013. Samaras reportedly wants to discuss extending that period to four years in his
Pakistan cement exports to Afghanistan plummet
Sales fall with the rise of local unemployment rates: IMF
KARACHI: Pakistan cement exports to Afghanistan have plummeted by 10 percent annually, owing to availability of cheaper Iranian cement there. The Pakistan cement manufacturers claim that the energy crisis and increasing prices of petroleum products have made its product uncompetitive in Afghanistan. Afghanistan has been the steadiest market for the Pakistani cement industry, according to an ARI report Thursday. The U.S. sanctions on Iran had been an impediment for Iranian exports to penetrate in Afghanistan. This allowed Pakistan to benefit with exports to the country growing at a four-year CAGR of 14 percent. The overall cement exports plunged by 9.2 percent YoY to 0.76Mt. Total cement sales in July 2012 were registered at 2.81Mt compared to 2.86Mt last year, depicting a decline of 1.6 percent YoY. The recent pledge of US$16bn at an international donor conference as civilian aid for economic development of Afghanistan is likely to bolster construction activity in the country. This should increase the demand for Pakistani cement in the long run. NNI
ISLAMABAD: The International Monetary Fund (IMF) said that the frequency and size of sales fall with the rise of local unemployment rates and yet the inflation rate for effective prices paid by consumer’s declines significantly with higher unemployment. The IMF latest Study said that this discrepancy can be reconciled by consumers reallocating their expenditures across retailers, a feature of the data and quantify for which the Fund propose a simple model with household shopping effort and store-switching consistent with these stylized facts and document its implications for business cycles and policymakers. The Study argued that both the counterintuitive cyclical behavior of sales prices and the discrepancy between the cyclical changes in posted and paid prices can be accounted for by consumers switching across stores in response to economic conditions. Intuitively, given considerable dispersion of prices across stores in any given time period, a deterioration in local economic conditions should lead some price sensitive consumers to reallocate some of their consumption expenditures toward low-price retailers, thereby lowering the average price paid for any given good. ONLINE
Khanozai-Muslim Bagh section, Muslim Bagh-Qila Saifullah section, Qila Saifullah - Zhob section, Zhob-Mughalkot section and Mughalkot-D.I. Khan section. Work on three sections, including 73-kilometre Kuchlac Khanozai- Muslim Bagh section, 50-km Muslim Bagh-Qila Saifullah section for which financial assistance was given by Asian Development Bank (ADB) and 143-km Mughalkot-D I Khan section, which falls in Khyber Pakhtunkhwa, was completed in 2009. Work on 155-km Qila Saifullah Zhob section is going on with the financial assistance of ADB. Uptill June 2012, it progress was over 55 per cent and its completion date is May 2013. Meanwhile, 78-km Zhob-Mughalkot section of N-50 is at planning stage through ADB funding and work is likely to commence next year.
talks in Berlin and with French President Francois Hollande in Paris on Saturday. Berlin has insisted that there can be no wiggle room for Greece either in terms of the substance of the reforms and cuts it must make or in terms of the time it takes to achieve them. A team of auditors from the socalled Troika — the European Commission, International Monetary Fund and European Central Bank — is due to report next month on whether Greece has done enough to unlock a further tranche of aid to stave off bankruptcy. In his interview on Thursday, the German finance minister said the findings of that report would have to be made public first before deciding the way forward for Greece.
Oil prices drop after recent rally LONDON: Crude oil prices fell Wednesday following recent gains, mirroring events across world stock markets, as traders showed caution ahead of Greek talks, Fed minutes and US energy inventory data. Brent North Sea crude for delivery in October dropped 79 cents to stand at $113.85 a barrel in London midday trade compared with Tuesday’s closing level. New York’s main contract, light sweet crude for October slipped 22 cents to $96.62. Crude oil prices had risen in earlier Asian deals, building on the week’s strong gains, on growing hopes of imminent European Central Bank intervention to ameliorate the eurozone debt crisis. New York crude on Tuesday reached $97.60 a barrel, which was the highest level since May 10. Middle East tensions have also lent support to oil prices in recent days, traders said. In Europe, Greek Prime Minister Antonis Samaras on Wednesday called for more time to make spending cuts and reforms to unlock funds to keep the debtwracked country afloat, two days before Greece’s crunch talks in Germany. Investors were also waiting for the release of minutes from the Federal Reserve’s last monetary policy meeting. AFP
EU hails Russia’s WTO accession BRUSSELS AFP
EU trade commissioner Karel De Gucht on Wednesday hailed Russia’s World Trade Organization entry as a major boost for the recession-threatened European economy. “Today’s WTO accession is a major step for Russia’s further integration into the world economy,” De Gucht said in a statement as Moscow crowned a tortuous 18-year campaign and finally joined the world’s premier free-trade club. De Gucht said that the accession of Russia and its $2.0-trillion economy (1.6 trillion euros) to the Geneva-based trade policing body “will facilitate investment and trade, help to accelerate the modernisation of the Russian economy and offer plenty of business opportunities for both Russian and European companies.” De Gucht said: “I trust that Russia will meet the international trading rules and standards to which it has committed.” The European Union is Russia’s first trading partner and Russia the EU’s third. In 2011, EU imports from Russia totalled 199.5 billion euros, a large proportion being cars or auto parts and medicines, and Russian imports from the EU reached 108.4 billion euros, the bulk of which was oil and gas.
Fish, meat exports surge in July ISLAMABAD APP
Despite decline in overall food trade, the exports of fish and fish preparations increased by 23.83 percent during the first month of the current fiscal year (2012-13) as compared to the same month of last year. However, as compared to the exports of June 2012, the seafood exports in July 2012 witnessed negative growth of 5.20 percent, Pakistan Bureau of Statistics (PBS) reported. The over all exports of fish and fish preparations during the month under review were recorded at US$ 17.769 million against the exports of US$14.350 million in July 2011 and US$18.742 million in June 2012. Export of meat and meat preparations also increased by 31.62 percent and 31.16 percent during July 2012 as compared to the exports of July 2011 and June 2012. The exports of meat and meat preparations reached to US$22.632 million in July 2012 as compared to the exports of US$17.195 million in July 2011 and US$17.255 in June 2012, the data revealed. The other food items that witnessed increase in exports during July 2012 included spices, exports of which increased by 2.70 percent as compared to the exports of July 2011. However, as compared to the exports of June 2011, the export of spices also declined by 17.39 percent. Exports of sugar increased by 100 percent and 51.55 percent in July 2012 as compared to the exports of July 2011 and June 2012, respectively, the data revealed.
spain to ease liquidation of troubled banks MADRID AFP
Spain will empower its banking authorities to swoop in on lenders that appear to be heading to trouble and if necessary liquidate them, Spanish media said Thursday. The new legislation, reportedly to be passed by government ministers either this Friday or on August 31, was leaked to the leading daily El Pais and the business paper Expansion. Aimed at preventing new banking catastrophes, it gives the Bank of Spain and the state-backed Fund for Orderly Bank Restructuring (FROB) new powers to in-
tervene before crises erupt. Spain’s eurozone partners agreed in June to lend up to 100 billion euros ($124 billion) to salvage the nation’s banks, buckling under record bad loans built up since a 2008 property crash. Eurozone powers agreed the loan in return for a list of conditions drawn up in a June 20 memorandum of understanding. The new laws aim to comply with those demands. The Bank of Spain could intervene early even in a bank that complies with liquidity and solvency requirements, if there is objective evidence that it cannot continue to meet those standards, the papers said.
The central bank would have extensive powers to demand that the suspect bank provide an action plan within 10 days, agree a debt restructuring plan with creditors or fire the management. The FROB would be in charge of the restructuring or “orderly resolution” of banks, with powers to liquidate those entities it considers to be non-viable and unable to repay public money in a reasonable time frame. According to Expansion, already nationalised banks would be first in line for the new treatement, except for those whose liquidation would present “systemic risk”, an allusion to Bankia. Non-viable banks may be placed in
bankruptcy or subjected to a resolution plan by the FROB. A FROB resolution plan would have to include a valuation of the lender, the method to be used to dispose of the bank, and the financing required by the Deposit Guarantee Fund. The FROB has three options to dispose of a bank, said Expansion: Sell the business; transfer its assets and liabilities to a “bridge bank”; or cede them to an asset management company. The new legislation foresees the creation of a “bad bank” to pool troubled banks’ bad assets and also a “bridge bank” to manage healthy assets for up to five years until a buyer can be found, the reports said. Whether a bank is restruc-
tured or liquidated, investors in the lender would suffer, the reports said. Shareholders and subordinated creditors would have to suffer losses in case of restructuring or liquidations under the new law, Expansion said, complying with a condition set by the eurozone. Such a requirement would hurt many ordinary customers who were pursuaded by their banks to invest in preference shares without fully understanding the risks, Expansion said. Three nationalised banks — Bankia, CatalunyaCaixa and NovaGalicia — alone had 150,000 such customers with a total investment of 4.5 billon euros in preference shares, Expansion said.