Nationwide Updates

► WTO to hold meeting next month

The World Trade Organisation said on Tuesday that ministers will hold an informal meeting on the Doha liberalisation talks in Paris next month. The Australian embassy in Paris will host the meeting at which World Trade Organisation Director General Pascal Lamy will be present, a WTO spokeswoman told AFP. Aside from Lamy, around thirty ministers are expected to be present, she added. Aside from Lamy, around thirty ministers are expected to be present, she added. Aside from Lamy, around thirty ministers are expected to be present, she added.  (Dawn)

► Services sector deficit up by 44pc

The services’ trade deficit during July-April 2007-08 went up by 43.9 per cent to $5.57 billion as against $3.87 billion recorded in the corresponding period of the last fiscal. During these 10 months, services imports (outflow) were $8.24 billion, while exports (inflow) stood at only $2.67 billion. Last year during the same period, imports were recorded at $6.93 billion and exports at $3.6 billion. It was revealed that during the period under review, services exports went down by 12.77 per cent, while imports went up by 19 per cent over the corresponding period of the last fiscal year, the State Bank of Pakistan (SBP) reported on Monday. The rising service trade deficit, resulting of mismatch of supply.  (The News)

► Can Pakistan come out of persistent trade deficit?

WTO, despite its dictum on multinational trade discipline, has made provision for preferential and differential treatment in trade to accommodate developing countries to enable them to come at level playing field with industrially rich countries in global trade arena, which has no doubt resulted in serious challenges being encountered by WTO regime from emerging quite a number of trade blocs/regions and resultant trade disputes. At the same time it has helped developing countries to command approximately 35% of the world export trade by now. However, low income developing countries, including Pakistan, because of several constraints being faced by them.  (Business Recorder)

► Highest duty slab may be cut to 20 percent

The government is planning to bring down the highest slab of customs duty from 25 percent to 20 percent in the coming budget to encourage investment and reducing customs duty on import of raw materials, inputs, primary/secondary components and goods from 2008-09. Budget makers told Business Recorder on Tuesday that the Ministry of Commerce and Federal Board of Revenue (FBR) were jointly working on continuation of tariff reforms in the budget. In this regard, the tariff structure applicable in India is also under consideration, where gradual reduction in customs duty has facilitated its local industries. The proposal is to move the highest tariff downwards to 20 percent under the Pakistan Customs Tariff in the forthcoming budget.  (Business Recorder)

► Traders seek subsidy on wheat import

The Wheat Traders Association of Pakistan has urged the government to allow subsidy on import of wheat to make it viable. WTAP Secretary Saleem Ahmed said here on Tuesday that “wheat prices are very high in the international market and its import cannot be viable by the private sector without incentives”. He appreciated the government’s plan to involve the private sector in the import of wheat, but said that due to prevailing international market conditions, it was impossible for the private sector to import wheat without additional incentives.“We propose that a subsidy in US dollars or equivalent Pak rupees, subject to costing.  (Dawn)

► Price freeze not feasible economically

Reports have been surfacing recently alleging that the Government is seriously considering freezing the prices of essential commodities as well as electricity charges in the budget. There is little doubt that such stories fuel expectations within the general public and, in the likely event that the government may be unable to meet these expectations, a serious law and order situation may arise. Coming in the wake of existing security issues facing us today the country can ill afford food riots as well. That it is highly likely that the government will be unable to meet expectations of freezing prices of essential items with an in-built element of subsidisation, given the resource constraints it has been grappling with in recent months, cannot be denied.  (Business Recorder)

► Subsidy on oil to go, govt assures WB: Consumers to bear brunt of price hike

Pakistan’s newly elected government has, in the midst of budget preparation, told the World Bank that it plans to eliminate subsidies on imported oil in the new financial year in a landmark, but politically challenging, step to return to a previous regime of passing oil prices to consumers. The promise to pass on oil prices came in a meeting between Finance Minister Naveed Qamar and Praful Patel, the vice-president of the World Bank for South Asia, who is on a farewell visit to Pakistan before his retirement. The decision to pass on oil prices to consumers is central to the new government’s future steps in tackling an otherwise fast rising budget deficit.  (Dawn)

► Who is fuelling oil price hike?

Few may agree while some may not that we are living in an era of global casino. With burgeoning population growth, the global demand of food, oil and metals is certainly on the rise. But the high incidence of speculation about the prices of commodities is the worrisome factor. The last episode was the Asian bubble in 1997-98, then came the dot.com bubble in 2000 and now housing bubble in 2007-08, which has contributed towards global credit crunch. The panic in world financial markets has led to sharp falls in share prices and led to the contraction of credit markets. Liquidity is available, but quality credit is the real factor. Key indicators around the world have moved as recession fears grow.  (Business Recorder)

► Dealing with the oil-free crisis

As the price of crude oil touches new record heights, so have the global food prices. These food prices have risen 73 percent since 2006, but the increase for certain products has been even more dramatic. Edible oils are up 144 percent; cereals, including wheat and rice, are up 129 percent; dairy products have doubled in price. These prices are expected to remain elevated at least until 2009. According to World Bank president Robert Zoellick, the developing world's higher food bill will erase the past seven years of progress in reducing poverty. The World Food Programme has labelled the spreading food crisis a "silent tsunami."  Economists have since time immemorial been obsessed with fluctuations in oil prices.  (The News)

► Oil and the Arctic 

WHAT connects oil at $135 a barrel with last month’s discovery of huge cracks in the Ward Hunt ice shelf off Ellesmere Island at the top of Canada’s Arctic archipelago? And what might connect those two things with a new, even Colder War? The cracks in the ice, further evidence that the ice cover on the Arctic Ocean is melting fast, were discovered by scientists tagging along with a Canadian army snowmobile expedition that was officially called a “sovereignty patrol.” The army was showing the flag because Canada, like the other Arctic countries, suspects that valuable resources will become accessible there once the ice melts.  (Dawn)

► Food crisis has changed game on beating poverty

World leaders must radically change their strategy toward beating poverty now that hunger can no longer be staunched by cheap food, the head of the United Nations farm aid agency said. At a food summit in Rome next week, the international community must recognise that poverty challenges have changed and agree to reverse years of neglecting poor farmers, said the head of the International Fund for Agricultural Development. “They (governments and donors) have taken cheap, affordable food on the international market for granted. We no longer can do that and we have to realise it’s a profound structural problem,” IFAD President Lennart Bage said in an interview late on Monday.  (Daily Times)

► World Bank offers help to control food prices

The World Bank has offered financial and technical assistance to Pakistan for controlling the rising food prices and reducing the yawning budget deficit. The bank will provide the assistance from its food crisis response fund created in the wake of global food crisis. The offer was made by World Bank Vice-President Praful C. Patel during a meeting with Prime Minister Syed Yousuf Raza Gilani here on Tuesday. Senior officials of the World Bank and IMF are in Islamabad to review the economic situation and suggest measures to steer the country out of the economic crisis it is facing.  (Dawn)