PRO 27-04-2012_Layout 1 4/26/2012 11:37 PM Page 1
On the origin of incomes Page 02 profit.com.pk
Friday, 27 April, 2012
CoMMEnt So CLoSE YEt So FAR… In FACt not CLoSE At ALL
MCB sets the tone
It’s 3.2 Doc, not 4.0 g
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Pakistan’s economy to grow 3.2 percent for current fiscal year: nAC If the prophecy comes true it would still be a 0.2 percent rise ISLAMABAD AMER SIAL
OntRaRY to the claims of Finance Minister Dr. abdul Hafeez shaikh of achieving 4 percent growth rate during the current financial year, the national accounts Committee (naC) has made a provisional estimate of 3.2 percent growth in the gross domestic product (GDP) for the current fiscal year. Briefing reporters after the meeting on thursday, secretary statistics Division sohail ahmad said that from the available data of last eight to nine months, the provisional growth is estimated 3.2 percent for the current fiscal year, as compared to growth of 3 percent last fiscal year. the increase has been made possible by growth in agriculture sector by 3.6 percent, while industrial sector grew by 3.4 percent and services sector by 2.1 percent. the government has earlier projected the GDP growth of 4.2 percent but later on revised it to 3.6 percent for the current fiscal year. He said for assessing the economy for the current fiscal year, the Pakistan Bureau of statistics (PBs) also revised the base year from 1999-2000 to 2005-2006. He said
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revision exercise is common in every country after 5 to 10 years. the revised data GDP and overall economic growth since 2005-06 did not change much as compared to the old data base. the revision shows that agriculture share in GDP has increased from 24.1 percent to 24.7 percent, industrial sector increased from 21.7 percent to 22 percent while services sector share increased from 47.2 percent to 53.1 percent. Overall GDP at market prices for the new base year has slightly decreased by 0.4 percent. the average annual growth rate between 2005-06 and 2010-11 has decreased from 3.7 percent to 2.9 percent. sohail said that the revision was necessary and brought significant improvements but did not rewrite the economic history of the country. He said that the rebasing was done in a very professional manner and international best practices were adopted. Experts from German international development agency, GiZ closely monitored the implementation process. after changing the base year, GDP size at cost and price is assessed Rs 9113.2 billion this fiscal year with per capita income of Rs 53,137. the Planning Commission has assessed the population at 178.9 million as
compared to 175.3 million last year. in the agriculture sector the crops registered an increase of 3 percent, livestock 4.1 percent, forestry 4.1 percent and fishing 1.8 percent. the mining and quarrying category in industrial sector increased by 1.7 percent, manufacturing 2.4 percent, construction 2.8 percent and energy by 14.3 percent. Explaining the reason for abnormal growth in electricity generation and distribution and gas distribution, Head of PBs arif Cheema said that it was calculated on the basis on subsidy provided to the sector by the government. He said it is calculated in the same way internationally. in the services sector, transport and communication increased by 3.2 percent, wholesale and retail trade 2.1 percent, financial and insurance declined by 11 percent, ownership and dwellings 3.4 percent, public administration and defence by 3.4 percent, and social and public services by 3.4 percent. about the decline in financial and insurance, Cheema explained that it was calculated on constant term but on current prices they figure might be in positive. PBs explained to the meeting that with the rebasing 2005-06, Pakistan will be focusing mainly on GDP instead of
Gross national Product (GnP), which is outdated, and replaced by Gross national income (Gni). international comparisons require application of internationally agreed classifications. the rebasing 2005-06 employs a national adaptation of United nations, international standard industrial Classification of all activities (isiC). the adaptation is called Pakistan standard industrial Classification (PsiC 2007). switching to the modern classification implies to show the output and the value added of government units under the headings of the respective activities like public administration and defense, education, health social services. Un has already released an even more modern classification which in Pakistan has come into use with the census of manufacturing industries 2011, and which will be soon employed in national accounts. at present, the national accounts in the country are calculated on annual basis, but when the rebasing 2005-06 is finalised then the annual time series will be quarterized and quarterly accounts will be launched. and PBs will in parallel enter into compilation of institutional sector accounts.
O MCB posts extraordinary first quarter results just when the banking sector must take centre stage if liquidity is to be brought back to choked credit markets, betting on just enough private sector offtake to grow out of persistent stagflation. Good development, especially since conditions have been just about right for much of the sector to follow suit. Despite hawks prevailing in the monetary policy committee, the business environment has been busy over the last quarter, especially in the commerce ministry. Word has it that islamabad’s recent spirited drive to reach out to new export markets has facilitated a welcome return to form on the part of commercial banks. as trade increases, so does the need for banks to innovate, offer facilities, do more business, create more money, and generate greater multiplier. Yet more than the exogenous support, it is positive movement on nPLs that stands out, indicating a clear shift in near-to-medium term outlook. Risk management problems have long been central to the banking sector’s willingness to cater to abnormal government borrowing. Posturing proactively on the issue shows MCB’s policy in the days ahead, developing instruments aimed at facilitating private sector growth and innovation, the life and blood of an emerging economy. Expect banks to do better in the local bourse, with hoards that rode the recent cement boom diversifying into banking scrips – a trend with its own irrefutable logic since increased cement demand that fed on enhanced trade opportunities played no small part in improving bank earnings over the quarter just ended. MCB has set the tone with an impressive first quarter show. as the sector gains momentum and adds to market buoyancy, its bigger players will realize the central role it has to play in the wider economy. Coming quarters will tell much about which way the economy will tilt, and what role its money lenders play.
RICE RIVALRIES
Our Basmati kingdom under attack g
Pakistan may lose its hegemony over Basmati exports Philippines to put its Basmati rice on the Middle East table g
KARACHI
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GHULAM ABBAS
akistan, being an agro based economy, is primarily known for its aromatic Basmati rice in the world but it may lose the position in Middle East as Philippine is all set to introduce the same Variety of rice in the region. the foreign country which once itself was a rice importing country is now looking forward to export the Basmati rice to the gulf region after being self sufficient in various varieties of rice.
Philippine has almost stopped importing rice so far and it was looking for exports of high quality rice (Basmati) which may pose serious threat to Pakistani products in the region, taufiq ahmed khan of Rice Exporters association of Pakistan told Pakistan today. “in the absence of any research and value addition mechanism in the country Pakistan may lose the important markets where its aromatic Basmati has a high demand,” he said adding that many foreign countries were already experimenting to grow the highly demanded varieties of rice and other
agricultural products. “the most impact of the introduction of Philippine rice in the region would be on Pakistani products, causing the loss of over $ 1 billion worth exports,” he said adding “approximately 70 percent of the country’s rice goes to Middle East”. in order to have the hold on the existing markets besides taping new markets the country was needed to have research facilities, high tech milling machinery and local fabrication, and maintenance and improvement of quality of the agricultural product. according to sources Qatar and
kuwait were the leading Middle Eastern countries which were willing to import the Basmati rice from Manila. the Philippine and Qatar government recently signed several agreements to boost trade and investment ties. One of the agreements focused on agriculture and fisheries sectors. the Philippines used to be the world’s top rice importer, purchasing as much as 2 million tons of rice in 2010. the foreign country has vowed to make itself sufficient in rice by 2013. since 2011, the country has drastically cut down its import requirement. it is worth mentioning here that rice
is the third largest crop after wheat and cotton. it is grown over 10 percent of the total cropped area. Rice is highly valued cash crop and is also major export item. it accounts for 6.7 percent in value added in agriculture and 1.6 percent in GDP. Pakistangrows enough high quality rice to meet both domestic demand and allow for exports of around one million ton per annum. Different varieties of rice are grown in Pakistan for example super Basmati, Basmati Pk-385, irri-6, irri-9 and ks-282 etc. Pakistan is primarily known for its aromatic rice (super Basmati/Basmati Pk-385).