Nationwide Updates

► Imports of food items up by 51.28% in July-May

Overall imports of selected food items in the July-May period of outgoing fiscal year 2007-08 increased by 51.28 percent to total $3.867 billion while last year imports stood at $2.556 billion. According to the figures of the Federal Bureau of Statistics (FBS), main contributors in agriculture import bill were the higher price of palm oil and wheat.  The government had spent $1.385 billion on the import of palm oil in the current year while last year it cost the government to $827 million. The second expensive imported item was wheat that cost $859 million while last year it was $41 million.  (Daily Times)

► Duty-free dredgers create confusion

The budget proposal for 2008-09 to allow duty-free import of dredgers has created a lot of confusion among maritime circles. The experts believe that the proposal has either been made to give equal benefits to foreign companies who had been importing dredgers on payment of duty to execute their local projects or there is some serious slippage because import of dredgers under Pakistan flag is already exempted from customs duty. It is feared if the government intention is to allow duty-free import of foreign dredgers.  (Dawn)

► LC margin on essential imports waived

The State Bank of Pakistan has waived requirement of 35 per cent cash margin on a number of essential import items with immediate effect. SBP Governor Dr Shamshad Akhtar made the announcement at the third meeting of the Private Sector Credit Advisory Council at the central bank here on Saturday. “With the issuance of this additional list, most of industrial raw materials and inputs have now been exempted from cash margin requirement,” she said, adding instructions have been issued to all banks in this regard.  (Dawn)

►Textile, clothing exports fall 2.5pc

Textile and clothing exports declined by 2.5 per cent to $9.591 billion during the first 11 months (July-May) of the current fiscal year from $9.837 billion over the same period last year, Statistics Division said on Friday. The over-all dismal performance of textile and clothing sector shows that the target of $19.2 billion exports is unlikely to be achieved. However, a substantial growth in non-textile categories suggests that export proceeds would be closer to the target by the end of the current month.  (Dawn)

► SBP gives relief under export finance scheme

The State Bank of Pakistan (SBP) has decided to provide the following relief in respect of refinance availed by exporters under the export finance scheme for fiscal year 2007-08 to address the problems facing the exporters. The exporter, who availed pre-shipment finance during 2007-08 and could not ship goods within a maximum period of 180 days, would be allowed a grace period of 15 days. In other words, there would be no fine for delayed shipment if qualified shipment is made within 195 days from the availing of loan.  (Dawn)

► The leftover budget

PAKISTAN has more livestock than it does school-going children; it ignores the potential inherent in both. According to the Pakistan Livestock Census 2006, our population of buffaloes and cattle has increased (despite our being a nation of carnivores) from 40 million in 1996 to 56 million today. Our children lag far behind — as students are wont to do on their way to school — at 33 million. These figures might have remained mere statistics in the malleable hands of economists, had the recent Economic Survey of 2007-08 not alerted us to the situation affecting our forgotten majority — the rural sector.  (Dawn)

► Flying high on optimism

As a statement of the fiscal policy, the annual national budget seeks to attain certain macro-economic objectives, such as growth, employment, price stability and correcting fiscal and external account imbalances. At times, these objectives may come into conflict with each other, forcing the policy-makers to effect a trade-off. For instance, while maintaining the growth momentum may necessitate increase in public expenditure, growing fiscal deficit may call for greater prudence in government spending. Fiscal policy objectives and the capacity to achieve them are conditioned by the state of the economy.  (The News)

► Sindh receives $2.5bn investment offer: Thar coal project

Sindh has received $2.5 billion investment offer for a mining project in Thar coalfield from reputed national and international investors. The project, advertised by the Mines and Mineral Department inviting expressions of interest from private sector parties, received a very good response and in all seven proposals were received. The joint venture project, in which the Sindh government will have 50 per cent equity, will ultimately grow into a 1,000MW coal-based power plant with a total investment of seven to eight billion dollars.  (Dawn)

► Tractor industry and budget 2008

Pakistan is basically an agricultural country and its almost 70% of the economy is based on agriculture. Today tractors and agricultural equipment's play a major role in mechanised farming instead of conventional way of ploughing lands. Due to shortage of water resources, input prices of agricultural seeds and fertiliser, lack of research and development and having no advisory services to farmers, the total sand utilisation could not be significantly increased. In 1991 it was 21.82 MHa and till 2006-07 it is 23.13 MHa, despite the fact that tractor units has increased over the last 10 years which is 500,000 today.  (Business Recorder)

► Wheat subsidy: to give or not to give  

The World Bank has urged the Government of Pakistan to withdraw subsidy on wheat. Subsidies, so it was argued in two recently held seminars on the subject as well as in the Bank's latest report on global development finance, do not benefit the rural poor who form the bulk of those living below the poverty line in Pakistan; instead, subsidies benefit only the urban poor. A better option, so suggested the Bank's economists, would be to issue food stamps which would be limited to the deserving poor, and not encompass an across the board subsidy.  (Business Recorder)

► WB loan to finance upgrading of Pakistan’s power network

The World Bank has approved a $256.85 million loan for the improvement of Pakistan’s electricity distribution and transmission network. The project will help strengthen the capacity of the distribution and transmission networks to meet increasing electricity demand in selected areas more efficiently and with better reliability and quality. It will also strengthen the institutional capacity of the selected distribution companies and support power sector reform.  (Daily Times)