Nationwide Updates

► EU trade chief, France clash on WTO proposals

France and some other European Union states said on Monday new proposals for a global trade deal ask too much of the bloc but EU trade chief Peter Mandelson said he had “overwhelming support” to press on with the talks. The World Trade Organisation’s Doha negotiations to lower barriers to exports around the world are now in their seventh year but face a crucial test in the next few weeks, after which the US presidential election may cause years of further delay.  Ahead of an expected meeting of ministers from WTO countries in June or July to seek a breakthrough, mediators last week published proposals they hope can help close the gaps. Anne-Marie Idrac, France’s junior trade minister, said those proposals were “less ambitious and balanced than ever”.   (Daily Times)

► WTO issues new proposals on services sector

A World Trade Organisation (WTO) mediator issued new proposals on Monday for freeing up trade in services such as banking and telecoms as part of a global deal. But Mexico’s WTO ambassador Fernando de Mateo y Venturini, who chairs WTO talks on services in the Doha round negotiations to open up world trade, told reporters that members had not yet agreed on dates for revised or final offers in the sector. “Members shared the view that substantial efforts were needed to reach a successful conclusion of the negotiations,” Mateo’s new paper follows revised negotiating texts issued last week for the core agriculture and industrial goods chapters of the Doha round, now in its seventh year.  (Daily Times)

► Govt may completely ban rice export to cool local prices

The government is likely to completely ban rice export to stabilise its prices in the local market, The News learnt on Monday. The Ministry of Food Agriculture and Livestock (MINFAL) has dispatched a summary to the Prime Minster Secretariat advising a ban on rice export with immediate effect to cool the soaring prices of the commodity, an official privy to the whole affairs of rice exports told this correspondent while requesting anonymity. Federal Minister for Food, Agriculture and Livestock, Nazar Muhammad Gondal soon after assuming the charge asked MINFAL to submit a summary for banning rice export, the same official added. The Federal Minister was not available for comments, his cell phone was switched off and spokesman for the MINFAL is in India for official engagement.  (The News)

► 12,000 tons of petrol exported

While the local petrol price has jumped four times, since March from Rs53 to Rs68.81 per litre, the country exported 12,008 tons of petrol to Afghanistan, Albania and the United Arab Emirates (UAE), fetching Rs662 million during July-Feb 2007-08. Out of total exports, the UAE was the main buyer of petrol with 6,000 tons, resulting in foreign exchange income of Rs376 million, followed by Afghanistan with an intake of 5,968 tons worth Rs283 million and Albania paying Rs2.4 million for a paltry shipment of 40 tons. In 2006-07, the country exported 38,654 tons of petrol worth Rs1.6 billion with the UAE share of 30,644 tons (Rs1.2 billion), Kabul 8,007 tons (Rs372 million) and the United Kingdom three tons.  (Dawn)

► Minfal to import 350,000 tons of urea

The Ministry of Food, Agriculture and Livestock has finalised arrangements to import urea fertiliser and wheat to overcome the shortage of these commodities in the country. According to a press release issued here on Monday, on special directives of the prime minister, Minfal has decided to import 350,000 tons of urea to meet domestic requirements. It said that 50,000 tons of urea will be reaching here by June from Saudi Arabia, while arrangement for import of 300,000 tons has been finalised and urea is expected to arrive in July this year. The fertiliser will be imported through the Trading Corporation of Pakistan, it said.  (Dawn)

► Budget 2008-09: Fruit exporters submit new proposals

Fruit exporters have submitted proposals to the Federal Finance Minister for their incorporation in the annual budget 2008-09 with special emphasis on shifting export trade from volume to value based exports. In a letter to the Federal Finance Ministry, All Pakistan Fruit and Vegetable Exporters and Importers and Merchants Association forwarding suggestions for budget 2008-09 claimed that in WTO regime, the sanitary and phyto–sanitary are main issues in import-export of fruits and vegetables.  Having no proper control over fruit flies, our produce does not meet the international standard.  (Daily Times)

► Economists back Pakistan’s rate rise, shares tumble

Investors fled Pakistan’s stock market Monday after last week’s sharp increase in interest rates, but economists praised the central bank’s decisive action to counter inflation.  SBP raised its discount rate to 12 percent from 10.5 percent on Thursday to help control ballooning fiscal and current account deficits and rein in inflation, which hit 17.2 percent in April, a level last seen in the mid-1970s.  It has lost nearly 8 percent in the two trading sessions since the rate hike was announced.  “Sentiment was weak already on economic and political uncertainty,” said Shuja Rizvi, director broking operations at Capital One Equities Ltd. “   (Daily Times)

► Budget-makers for tough steps to stem inflation

Budget-makers have recommended tight monetary measures and fiscal stringency to contain the inflation rate at eight per cent during the next financial year, it is learnt. Documents of the national budget for fiscal 2008-09 obtained by Dawn show that the main thrust of the government will be to keep the fiscal deficit within a sustainable limit in conformity with the Fiscal Responsibility and Debt Limitation Act, 2005, in its pursuit of a 6.5 per cent growth rate. The growth target has to be achieved to bring macro-economic stability by managing new resources for pro-poor expenditures and growth.  (Dawn)

► Priorities for the budget  

The newly elected government is in the process of devising the budget for the forthcoming fiscal year: a challenge by all accounts, made doubly so with the fear of increasing political polarisation over the judges issue which may well pit the government against its erstwhile coalition partner, PML (N), as well as the civil society. In these economically trying times the government must take all the stakeholders on board with respect to budget proposals in an effort to ensure a consensus approach that would transcend party lines, thereby ensuring the full implementation of budgetary policies. Notwithstanding some political hiccups in recent weeks, there is a political consensus about what are the major challenges facing the economy today.  (Business Recorder)

► Widening income gaps 

SOME of us have been worrying about the growing disparity in the distribution of incomes in Pakistan. Income inequalities have increased in several different ways. They have widened among different segments of the population. The share of total incomes being claimed by the top 10 per cent of the population has increased significantly while that of the poorest 40 per cent has declined. The income gap has also widened among different political jurisdictions. Although Pakistan does not have good data on provincial gross output and income per head of the population in the various provinces.  (Dawn)

► Food inflation will touch 26 percent by month-end: Shamshad  

The country's food price inflation is set to register another record high by the end of this month, the head of the State Bank said on Monday. "Food inflation will touch 26 percent and maybe more in the upcoming days," State Bank of Pakistan Governor Shamshad Akhtar said. The bank is also fighting a tough battle to stem overall inflation due to soaring international oil prices amid domestic and worldwide food shortages. The annual inflation has already doubled from 12.5 percent to 25.5 percent while the overall core inflation is also touching double digits. "I think our core inflation is going to be a record high of around 10 to 11 percent, I think 11 percent," Shamshad said in an interview with a TV cahnnel.  (Business Recorder)