Monday, March 24, 2014
PML-N vows to materialise dream of Hazara province
Sticking to their guns
HARIPUR:
Though the resolution for a separate Hazara province has
divided opinion across the region, people from Hazara division have
welcomed the step as a positive one.
Speaking to The Express Tribune on Sunday, former MNA Gohar
Ayub Khan lauded the move and assured the Pakistan Muslim League-Nawaz
(PML-N) to which he belongs will get the resolution approved from the
Senate and Lower House.
To a question, he said the way the resolution was adopted did fulfill
the requirements for the creation of a new province. He, however,
claimed had Chief Minister (CM) Pervez Khattak voted in favour of it, it
would have strengthened the case.Gohar maintained those calling for the demand of Hazara province on linguistic grounds were actually throwing a spanner in the works as Tahirkhelis, Mashwanis, Jadoons, Tareens, Swati Khankhels and Dilazaks were all Pukthuns who had been living in Hazara for centuries. “Even if they have forgotten their mother tongue, their ethnicity as Pukhtuns remains unchanged,” he said.
He added the province was an administrative requirement and was a province till March 12, 1848 when Sikh Governor Sardar Chitar Singh surrendered before the British forces. He said during the era of Ahmed Shah Abdali, Hazara was called as Chach Hazara and then later named Hazara.
Gohar said after the Partition, India had nine provinces, while till last month it had 28. Now, he added, India added yet another province, with the smallest province having a population of 600,000. “The concept of small is beautiful is well accepted worldwide, so the creation of small administrative units is the need of the hour.”
Former CM and Provincial President of PML-N Pir Sabir Shah said his party had a clear stance on Hazara and would honour its promise. He said the province was the right of the people which was why they had incorporated the demand in their manifesto.
Replying to a query, he said the appointment of PML-N senior leader Mehtab Abbasi as the K-P governor has nothing to do with Hazara as a province, but he was bound to follow the party lines.
Celebrations abound
Workers of Pakistan Tehreek-e-Insaf (PTI), PML-N, Hazara Qaumi Mahaz, Tehrik Suba Hazara and its splinter group Suba Hazara came out on the streets and danced in jubilation. They congratulated each other and also distributed sweets.
“I do not foresee any hiccups in the way of the province’s creation as PML-N enjoys majority in the National Assembly,” claimed Liaqat Khan, a political analyst commenting on the situation. He lauded the role of PTI MPAs from Hazara but criticised the CM for his absence in the assembly session.
Published in The Express Tribune, March 24th, 2014.
PML-N government fulfils longstanding demand of residents
PML-N government fulfills longstanding demand of residents
Prime Minister Nawaz Sharif and Punjab Chief Minister Shahbaz Sharif, with the laying of foundation-stone of the Rawalpindi-Islamabad Metro Bus Service Project on Sunday, have fulfilled a longstanding demand of the residents of the twin cities with regard to provision of a modern transport system to them.
After the closure of Varan Tours Bus Service in the PML-Q government, the residents of Rawalpindi, facing problems, had been demanding a modern transport service. In the previous governments, high officials and concerned transport authorities had been making promises to the people in this regard, however, they failed to materialise them.
However, Prime Minister Nawaz Sharif and Punjab Chief Minister Shahbaz Sharif, who promised the residents a mass transit project for their twin cities during the PML-N election campaign last year, soon after coming into power, directed the concerned officials to prepare a plan for the Metro Bus Service Project.
In January 2014, Prime Minister Nawaz Sharif gave approval to the Metro Bus Project and directed the concerned authorities to 0initiate work on the scheme. Punjab Chief Minister Shahbaz Sharif, on February 1, 2014 in the light of the directions of the prime minister, gave approval to this project in a meeting of the Punjab Cabinet and work was immediately started for fulfilling the requirements and tender process for the project.
The Rawalpindi-Islamabad Metro Bus Project is being implemented as per vision of Prime Minister Nawaz Sharif and Chief Minister Shahbaz Sharif with the objective of providing an international standard mass transit system to the residents of the twin cities. The total cost of the Metro Bus Project is about Rs44.21 billion.
Federal and provincial governments would contribute 50% each of the total cost. The route of the Metro Bus Service would start from Flashman’s Hotel Chowk, Rawalpindi, and end at Pakistan Secretariat, Islamabad, after covering a distance of 23.2 kilometres.
Similarly, the portion of Metro Bus Service in Rawalpindi from Flashman’s Hotel to Faizabad, having a distance of 8.6 kilometres, would be on elevated track, while from Faizabad to Pakistan Secretariat via IJP Road and 9th Avenue up to the destination having a distance of 14.6 kilometres, will be ground road.
A total of 24 modern stations for passengers would be built on route out of which 10 will be on Benazir Road and the remaining 14 will be in Islamabad. Initially, 60 buses would be plied on the route and more than 150,000 passengers would benefit from the project.
About 29 kanals of land would be acquired for the project out of which about 20 kanals would be acquired on Benazir Bhutto Road, Rawalpindi. According to high-ups in the city district government, including the Rawalpindi commissioner, there would be no environmental effects of the project as no greenbelt would be affected during the construction of the project and this project would also have no effect on the overall master plan of the capital.
The Rawalpindi-Islamabad Metro Bus Service Project is being undertaken keeping in view the long-run mass transit requirements of the twin cities and if in future the load of passengers is increased, the Metro Train, after laying its track, might also be run on this track.
According to higher authorities in the city district government, the PEPRA and other related laws have been strictly followed to ensure transparency in the project and there would be no compromise on construction standards of the project. Keeping in view the experiences of Lahore Metro Bus Service Project, the prime minister and the chief minister have directed the concerned authorities to ensure completion of the project on better level and standards so it may cater to the long-term requirements of mass transit system.
PML-N to revive ideology of Pakistan
PMLN to revive ideology of Pakistan
Monday, March 24, 2014 - Attock—State Minister for parliamentary Affairs Sheikh Aftab Ahmad has said that Lahore resolution passed on 23rd March 1940 the most important event of Pakistan Moment and the propose of it celebration s to keep the young lot aware of its importance, he said this while talking to this correspondent here at his residence.
He said that the govt of PML (N) is committed to revive the ideology of Pakistan and its ample proof is that after years break this day is being celebrated with great zeal and zest at govt level.
He said, two-nation theory highlighted that Muslims and Hindus were two separate nations. He said that the importance of this resolution was not less than the declaration of independence.
The purpose of 23rd March resolution was the establishment of modern Islamic and democratic state he said. The minister said, Pakistan ideology meant to create a modern state where Islamic principles were implemented. He said that resolution for establishment of a separate homeland for the Muslims of British India passed in the annual session of All India Muslim League held in Lahore.
He said, this resolution was passed unanimously and is a landmark document of the history of Pakistan.
He said the passing of this resolution marked the transformation of Muslim minority in British India into a nation with its distinguishing socio-cultural and political features.
Thursday, March 20, 2014
#RoshanPakistan | Dasu Dam construction to be started this year
Work on $4.2bn Dasu power project to begin this year
ISLAMABAD: An amount of $4.2 billion required for the 4,230MW Dasu Hydropower Project has been arranged and the construction work will begin this year, according to chief of the Water and Power Development Authority (Wapda).
Wapda Chairman Raghib Abbas Shah told the Senate Standing Committee on Water and Power on Wednesday that board of governors of the World Bank was expected to approve the project at its meeting next month.
He said that after completion of its first phase, which involves construction of two tunnels, the project would begin producing 2,160MW of electricity.
Upon completion of the second phase by 2019, the project’s capacity would go up to 4,230MW.
Mr Shah said the project was the first one for which the World Bank had agreed to finance even land acquisition, thus facilitating its launch this year.
He said the German government would provide $1bn for the project, the Industrial and Commercial Bank of China $2bn, the World Bank $500 million and the remaining $700m would be arranged by the government and Wapda.
Answering a question, the Wapda chief told the committee that order for the project was expected to be issued next month after vetting of contractors by the Pakistan Engineering Council.
He said that 70 per cent of the work would be awarded to international contractors and the remaining 30 per cent to local companies.
Mr Shah said that after completion the Dasu project would generate 12bn units of electricity every year.
Initially, he said, the World Bank offered to support the construction of only two tunnels but on the government’s request later agreed to help build all the four tunnels of the project.
He said the government was in contact with the World Bank to allay the latter’s concerns over the Diamer-Bhasha dam project which could be built in six years at an estimated cost of $12bn.
Minister of State for Water and Power Abid Sher Ali assured the Senators that he would provide to them the lists of boards of directors of all electricity distribution companies, except K-Electric, within a week.
http://www.dawn.com/news/1094250/work-on-42bn-dasu-power-project-to-begin-this-year
Monday, March 17, 2014
Pakistan to Auction Next-Generation Cellphone Licenses
Government Hoping to Raise $1.6 Billion
March 14, 2014
KARACHI, Pakistan—Pakistan said it would auction next-generation cellphone licenses on April 23, in a move that the government hopes will raise at least $1.6 billion and create new jobs.
Pakistan is the only major country in the region that still doesn't offer 3G services, surpassed even by war-torn Afghanistan. It will sell both the 3G and the more advanced 4G LTE spectrum, government officials said.
The auction is part of a series of measures that the government of Prime Minister Nawaz Sharif is adopting to spur the country's stagnant economy and attract investment.
"We expect to receive bids for up to five licenses for 3G and 4G LTE bandwidths. Gauging from the interest so far we hope that the revenues will be more than estimated," said Syed Ismail Shah, chairman of the Pakistan Telecommunication Authority.
The country's Finance Minister Ishaq Dar approved the auction at a meeting in Islamabad on Thursday.
A government-commissioned study by Plum Consulting forecast that the 3G spectrum auction could raise Pakistan's gross domestic product by $8 billion and indirectly create up to 900,000 new jobs.
The government said that bids for 3G license will start at $295 million, and for 4G LTE licenses at $210 million. Mr. Dar said in a recent Wall Street Journal interview he is hoping the process would rake in as much as $2 billion.
Currently, Pakistan has five telecom operators. At least four of them are expected to participate in the bidding process.
"The entire process was carried out in a very clear, transparent and professional way and we are satisfied with it," said Omar Manzoor, spokesman for Mobilink, Pakistan's largest cellular operator.
In addition to existing operators, a Turkish and a Middle Eastern operator expressed interest, Mr. Shah said.
Officials and telecom operators said that 3G services could come online within a few weeks of the auction.
"There is a consensus now among all the stakeholders that the auction should proceed quickly," said Mohammad Tahir Saeed, an analyst at Topline Securities, a Pakistani brokerage firm. "Apart from the telecom industry, it is the services sector that stands to benefit the most once the 3G network starts operating."
Pakistan has about 132 million cellphone users, but only 15 million of them use the slow mobile Internet currently available in the country.
Sunday, March 16, 2014
Investment in stock markets corssed 65 trillion
Daily express news report dated March 16, 2014
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Saturday, March 15, 2014
Ishaq Dar a performer, not used to making hollow promises
A thorough professional like Dar hardly knows political antics and gimmickry. Since joining politics, he has not been known for making shallow political promises to attract attention and garner political support. He is always focused on the specialized job he is assigned. He takes it as a challenge. He did the same when he previously served as commerce minister and finance minister during earlier Nawaz Sharif government. It was because of Dar’s suave nature, competence and dedication that Asif Ali Zardari had preferred him as the finance minister of his government when the Pakistan Muslim League-Nawaz (PML-N) had joined hands with the Pakistan Peoples Party for a while in 2008. He did not serve for too long as the alliance fell apart due to political compulsions. Dar is one of less than half a dozen federal ministers, who are the real assets of Nawaz Sharif’s team. They are working overtime to make a difference in the portfolios they have been allotted. The prime minister is happy with this lot and is displeased with others, who are taking their assignments lightly. Dar’s test would be to stabilise the exchange rate. In December last, he declared to reduce the greenback to less than Rs100. He then asked those who have amassed dollars to cash them hurriedly otherwise they would suffer huge losses. Such investors who did not heed his advice are now at a loss. Sheikh Rashid stood out among the leading disbelievers and had announced that he would resign his National Assembly seat if the finance minister fulfilled his promise of bringing dollar to Rs98. The good news is that the greenback touched this figure on Wednesday with its constant depreciation. However, as this was about to happen, Sheikh Rashid made it known that he would not quit and instead alluded to a conspiracy theory in the appreciation of the rupee. He hasn’t elaborated the plot, but asked the government during a TV interview to explain how it got $1.5 billion. “It should tell how rupee rose and dollar slid otherwise I will spill the beans,” he threatened. But Dar did not want Sheikh Rashid to go home and said in a TV interview that he was thankful to those who threw the challenge to him that kept him on his toes to meet his commitment. Sheikh Rashid is the lone warrior, who is not willing to accept the magic done by the finance minister. Many others compliment the achievement.The Pakistan Economy Watch (PEW) said on Wednesday that dollar’s continued retreat would help stabilise economy, tame inflation and restore investors’ confidence. “The rising rupee will further push the US dollar down to set new records but stabilising the exchange rate which has remained volatile since long will be a test for the economic managers,” PEW president Dr. Murtaza Mughal said. He believed that fulfillment of the commitment by the finance minister will bring down prices of imported commodities and will have a positive impact on every person in Pakistan. He attributed the strength of rupee to excess supply of dollar, ban on gold import since January, encouraging International Monetary Fund (IMF) reports, Chinese decision to invest billions in Pakistan, award of GSP plus, expected sale of next generation telecom licences, positive interference by State Bank of Pakistan and 11% hike in remittances. Mughal said that exports have not increased to the satisfactory level which was must to maintain the trend. Terming the dramatic fall of dollar and its reducing demand a good omen for the economy, he said that dollar should remain under pressure despite hue and cry by exporters. The government should keep a hawk’s eye on speculators, currency dealers and on some banks who have been playing havoc with the economy for personal gains, and must encourage the deprecation of dollar below Rs98 in the national interest. A report said that Pakistan is expected to receive some $1.1 billion through auctions of 3G and 4G telecom licences, about $1 billion and $500 million from the World Bank and the Asian Development Bank and $550 million from the IMF along with $500 million raised through the issuance of Eurobonds.
http://www.thenews.com.pk/Todays-News-2-238153-Ishaq-Dar-a-performer,-not-used-to-making-hollow-promises
Last 8 months | Direct foreign invesment boosted by 18 %
Published in Daily Express dated March 15, 2014
http://express.com.pk/images/NP_LHE/20140315/Sub_Images/1102124987-2.gif
Thursday, March 13, 2014
Wednesday, March 12, 2014
Sunday, March 9, 2014
Is the economy turning around?
Column by Dr. Farrukh Saleem
Is the economy turning around? The good news is that the economy is growing at its fastest pace since 2008. The bad news is that inflation remains a potent threat. Is the economy turning around? Well, there are economic indicators that turn around before the economy as a whole turns around. These indicators have a certain degree of predictability value and are thus known as leading economic indicators.
Is the economy turning around? Has the private sector started borrowing? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident it starts borrowing and when it starts borrowing it starts investing and once it invests the economy turns around.
In July 2013, within a month of the new government taking over, the Overseas Investors Chamber of Commerce and Industry (OICCI) reported that “there is remarkable buoyancy in business circles coinciding with the change of government…. Business sentiments have gone up dramatically from minus 34 percent to positive 2 percent.” Lo and behold, in the first six months of 2013-14 credit to the private sector has gone up from Rs53 billion last year to Rs231 billion – an increase of 4.35 times.
Is the economy turning around? Are investors incorporating new companies? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident the Securities and Exchange Commission of Pakistan (SECP) experiences an increased number of entrepreneurs approaching the SECP for the registration of new companies. Lo and behold, the incorporation of new companies has gone up by a wholesome 17 percent from the 1st of July, 2013 to the 30th of November, 2013 as compared to the same period in 2012.
Is the economy turning around? Is the private sector importing machinery? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident it begins to import machinery. Lo and behold, machinery import is up 26 percent. When the private sector becomes confident it begins to construct. Lo and behold, as of February 2014, local cement dispatches have gone up by a healthy nine percent.
The theory behind leading economic indicators is that they turn positive prior to the economy turning positive. Question: Is the economy finally turning around? Answer: Leading economic indicators are painting an optimistic scenario.
The biggest threat remains terrorism for which the government has ad-hocism in place of strategy. In the monetary domain, the State Bank of Pakistan’s independence has been compromised and that cannot be good for anything financial. The other threat is from the stream of external payments that are bound to keep the economy under pressure.
Yes, there are other threats as well. Among them: the budgetary deficit, bank lending to the government, a sharp decline in net foreign assets, an anaemic revenue base and expenditures running way ahead of revenues.
On the ground there are three growth prerequisites: political certainty, economic certainty and policy predictability. According to the World Bank, “A range of governance and business environment indicators suggest that deep improvements in governance are needed to unleash Pakistan’s growth potential.”
“Economics is extremely useful as a form of employment for economists” – Galbraith
The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com
Twitter: @saleemfarrukh
Is the economy turning around? Has the private sector started borrowing? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident it starts borrowing and when it starts borrowing it starts investing and once it invests the economy turns around.
In July 2013, within a month of the new government taking over, the Overseas Investors Chamber of Commerce and Industry (OICCI) reported that “there is remarkable buoyancy in business circles coinciding with the change of government…. Business sentiments have gone up dramatically from minus 34 percent to positive 2 percent.” Lo and behold, in the first six months of 2013-14 credit to the private sector has gone up from Rs53 billion last year to Rs231 billion – an increase of 4.35 times.
Is the economy turning around? Are investors incorporating new companies? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident the Securities and Exchange Commission of Pakistan (SECP) experiences an increased number of entrepreneurs approaching the SECP for the registration of new companies. Lo and behold, the incorporation of new companies has gone up by a wholesome 17 percent from the 1st of July, 2013 to the 30th of November, 2013 as compared to the same period in 2012.
Is the economy turning around? Is the private sector importing machinery? To be certain, the economy will only turn around if and when the private sector becomes confident. When the private sector becomes confident it begins to import machinery. Lo and behold, machinery import is up 26 percent. When the private sector becomes confident it begins to construct. Lo and behold, as of February 2014, local cement dispatches have gone up by a healthy nine percent.
The theory behind leading economic indicators is that they turn positive prior to the economy turning positive. Question: Is the economy finally turning around? Answer: Leading economic indicators are painting an optimistic scenario.
The biggest threat remains terrorism for which the government has ad-hocism in place of strategy. In the monetary domain, the State Bank of Pakistan’s independence has been compromised and that cannot be good for anything financial. The other threat is from the stream of external payments that are bound to keep the economy under pressure.
Yes, there are other threats as well. Among them: the budgetary deficit, bank lending to the government, a sharp decline in net foreign assets, an anaemic revenue base and expenditures running way ahead of revenues.
On the ground there are three growth prerequisites: political certainty, economic certainty and policy predictability. According to the World Bank, “A range of governance and business environment indicators suggest that deep improvements in governance are needed to unleash Pakistan’s growth potential.”
“Economics is extremely useful as a form of employment for economists” – Galbraith
The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com
Twitter: @saleemfarrukh
Friday, March 7, 2014
Thriving industry inevitable for economic progress: Nawaz
Thriving industry inevitable for economic progress: Nawaz
Prime Minister Nawaz Sharif Thursday said that Pakistan’s progress was linked with thriving industry, and the government has been exploring new vistas to provide avenues to the business community for economic progress.
Addressing the inaugural session of the Pakistan Auto Show at the Expo Centre, he said the world exports were spreading over 216 countries but 76 percent of Pakistan’s exports were confined to only 20 countries of the world, adding that the number needed to be enhanced.
The prime minister said the award of GSP+ status by the European Union (EU) was an achievement of the PML-N government, adding the facility would provide access to 90 per cent of the Pakistani products to the EU market at zero tariff. Nawaz said the volume of Pakistani exports would be increased to 1.5 million dollars during the fiscal year 2014-15, saying the government had been working on a comprehensive strategy to expand the exports network.
The prime minister said the government’s task was to provide conducive environment for the businesses to flourish. He said if industry thrives, the whole country prospers. The prime minister said January 1972 was a black day in the economic history of the country when 32 industries were nationalised causing unprecedented loss to the economy bringing it on the verge of disaster within days.
He said the government had inherited broken economy from the previous government and every institution was on the decline, adding the PML-N government had faced the challenges with conviction and did not lose heart at any moment.
“If we lose heart, the country’s economy will face the same situation as has been the case for the last 20 years”, Nawaz stressed. The prime minister said the country was facing many challenges including terrorism, energy crisis and unemployment, asserting that thorough commitment and hard work was required to overcome these challenges. Nawaz Sharif said the government had planned many development projects in collaboration with China and efforts were being made to complete these projects within the tenure of the government.
Regarding energy projects, the prime minister said 660 MW Port Qasim and 2,200 MW civil nuclear plant projects had been launched in Karachi while work had been started on Diamir-Bhasha Dam and Basu Dam which would generate thousands of megawatt of electricity. He said the fourth expansion plan of the Tarbela Dam had been inaugurated which would generate 1,410 megawatt electricity while Neelum-Jehlum transmission line was under construction and it would be completed within the next few years.
Nawaz Sharif said the Punjab government had launched two projects of 1,300 MW, adding the government also planned to work on 2,793 megawatt hydro power projects and 21,000 MW electricity would be added to the system once all these projects were completed.
He said only 16,000 MW capability was achieved during the past 65 years and the PML-N government would add 16,000 MW more electricity to the national grid during the next five years. The prime minister said the Lahore-Karachi motorway would be started this year, adding that the feasibility of the project had been completed.
He said the life of Lahore-Islamabad motorway was 10 years but, unfortunately, no attention was paid even after 15 years by the previous regimes.
The prime minister said projects of 30 to 40 billion of rupees would be completed during the next one and half years while work was underway on the Karakorum Highway, adding that railway track from Karachi to Peshawar would also be upgraded. Nawaz Sharif said the government had finalised seven years projects worth 32.690 billion dollars with China which would attract an annual foreign investment of 4 billion dollar in the country.
Nawaz Sharif said the government was fully committed to improve law and order situation in the country. He said the nation had every right to question the past rulers regarding the sorry state of affairs about electricity and gas. The prime minister also directed Federal Finance Minister Ishaq Dar to hold a meeting with the stake-holders of the engineering industry and resolve their issues. Nawaz Sharif asked the auto show management to follow Geneva and other models for effective auto shows and maintain the same standards.
Tuesday, March 4, 2014
National Economy | UP UP UP ..
Early signs of economic recovery
Pakistan's moribund economy is showing ‘signs of recovery’. So claims the nine-month-old Nawaz Sharif government. Indeed, some indicators of economic health have shown improvement.
The output of large-scale industry has increased by 6.8pc on improved energy supplies to Punjab’s factories; private credit has risen from Rs53bn in the first half of the last financial year to Rs231bn, with the government claiming that much of it was for fixed investment; machinery imports are up by a hefty 26pc; overseas workers’ remittances have spiked by over 10pc to $9.03bn in seven months to January.
Tax collection registered a 17.2pc rise to reach Rs1.197 trillion; exports have also slightly grown; and inflation has decelerated.
The government says the economy expanded by more than 5pc in the first quarter of the present fiscal year. The State Bank of Pakistan (SBP) agrees, but says the overall gross domestic product (GDP) growth will be in the range of 4-5pc.
The International Monetary Fund has also upgraded its GDP growth estimates to 3.1pc from its previous forecast of 2.8pc after the second quarterly review of the country’s economic performance under its $6.7b Extended Fund Facility. Other multilateral lenders are also optimistic about higher-than-estimated growth.
The corporate sector is also upbeat about growth prospects, as manufacturers report an increase in new orders. The first Purchasing Manager Index (PMI) launched by MCB Bank last week, which is based on a survey of 200 small to large industries across Pakistan in January, depicts improvement in business confidence. The PMI, which is used to assess the direction of economic growth in the near-term the world over, says the economy is growing and creating jobs.
Conversations with several businessmen based in Lahore, Faisalabad and Karachi endorse the findings of the PMI survey. But many of these were worried over the increase in energy shortages going forwards, as well as higher cost of credit and deterioration in security conditions in the wake of the breakdown in peace talks between the government and the Tehrik-i-Taliban Pakistan.
Some, nevertheless, say they are planning to invest in small solar and coal power generation plants because of higher margins on investment.
Yet, in spite of these ‘improvements’, some analysts believe that it will be too early to say that the decline in the economy has been arrested. “There are a number of challenges that the government needs to surmount,” says Shahid Zia, a Lahore-based financial analyst.
“We are still not sure if the government will be able to bridge the fiscal deficit, which the central bank says will remain well above the budgeted target of 6pc, despite significant cut in the development expenditure and increase in [indirect] tax collection. It all depends on the successful sale of 3G and 4G mobile phone spectrums and increase in foreign official and private inflows.”
He is not alone. A senior banker says foreign flows are crucial to reducing the fiscal and current account deficits. He says Ishaq Dar, the finance minister, had ‘talked down’ the rupee for now, but exchange rate stability is not sustainable unless the country’s foreign exchange reserves grow significantly and inflation comes down.
“You cannot artificially keep the exchange rate in control for long when your reserves have bottomed out and inflation is far above what is experienced by your trading partners.”
Some also do not see foreign or domestic investors starting to invest in the economy in a big way in the near-term. “Investment is declining,” says Ali Salman of the Islamabad-based think-tank on the market economy, the Policy Research Institute of Market Economy (Prime).
“Chinese investors have committed investment of billions of dollars in large infrastructure projects and in the manufacturing industry over the next several years, but all these promises are yet to materialise.”
People like Dr Ishrat Hussain, who as SBP Governor in the early 2000s oversaw massive domestic and foreign direct investment in the economy, cautions against forming an opinion on the basis of growth estimates of the government or recent improvements in economic fundaments. As long as we have hard data on which the government’s estimates are based, he argues, it will not be wise to make an opinion.
However, Dr Hussain, who is running the Institute of Business Administration in Karachi, says huge opportunities for investment exist, but delays in restructuring regulatory and service bodies and privatisation are adversely impacting economic expectations.
“People are waiting for the government to restructure regulatory bodies and public sector corporations to get a sense of the policy direction before bringing in their money. They’ve also put their investment plans on hold until the government starts privatising public corporations. Some of them may want to buy one of these businesses rather than invest in new projects.”
Published in Daily Dawn dated March 03, 2014
Sunday, March 2, 2014
Interview | President PMLN Mandibahaudin
Dewan Mushtaq
This interview was published on January 20, 2013.
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