SBP cuts interest rate by 100 points

State Bank of Pakistan has slashed the discount rate by 100 basis points, report said on Saturday. At a press conference here Saturday, Governor SBP Syed Saleem Raza announced the monetary policy.

He announced that the SBP has decided to slash the discount rate by 100 basis points. “The SBP has cut the discount rate by one percentage points from the current 14 per cent,” Raza said. The governor said GDP ratio reaches 2.1 pc. He said foreign exchange reserves improved sharply and stood at $9.1 billion. The SBP has cut the discount rate by one percentage points from the current 14 per cent. It had cut the rate by one percentage point in April this year from 15 to 14 per cent.

The central bank also changed the interest rate mechanism to bring transparency in Repurchase Offered (repo) rate as well as reverse repo rate as recommended by the International Monetary Fund (IMF).

Central Bank wants reforms for entrepreneurial culture

State Bank of Pakistan, Syed Salim Raza Wednesday stressed need for reforms to foster an entrepreneurial culture.
Addressing conference on Entrepreneurship 2009, organized by Memon Professional Forum at local hotel, he said there is ample research available globally, which links entrepreneurship, innovation, growth to encourage policy makers to favour policies fostering reforms.
“In environment of innovative entrepreneurship, dynamic markets, businesses can grow rapidly, ensuring that employment grows and opportunity expands.”
In under-developed states like Pakistan, there is added bonus that such environment is also most poor-friendly and conducive to social mobility, he added.
He said that World Bank 2009 survey of cost-of-doing-business in 181 countries clearly stresses need for continued reforms in critical areas in Pakistan.
He said entrepreneurship encompasses innovative ideas, implementations that change way business is conducted in market. On other extreme, term applies equally well to lowly street vendor, who seeks to set up small stall of his own to provide living to his family, funded perhaps by micro-savings or micro credit, hoping to succeed by dint of sheer hard work and ability to satisfy a small market niche.
He said both definitions of entrepreneurship encompass some common elements: ability to envision an unmet market niche or innovation that can change market; willingness to invest their time, money, effort seeking to bring that vision to life and willingness to assume all resulting risks and rewards.
“It is thus probably no coincidence that most innovation occurs in countries that encourage entrepreneurs the most.”

Govt to improve law, order, power situation to achieve trade targets-Amin Fahim

Federal Minister for Trade Makhdoom Amin Fahim Monday said the law and order situation and power crisis across the country has had a negative impact on the overall trade.

Announcing the new trade policy 2009-12 here, Makhdoom Amin Fahim said the law and order situation will be improved and electricity crisis overcome in order to achieve the set targets.

Earlier today, the Federal Cabinet gave approval to the Trade Policy 2009-12.The Cabinet meeting was presided over by Prime Minister Syed Yusuf Raza Gilani.

The total imports of the country stood at 34.9 billion dollars in the last fiscal. The imports slashed by 13 percent and exports by 7 percent in the previous year.

The global economic growth shrunk by 9 percent as a result of world recession which also had its negative impact on Pakistan’s trade.

Textile exports decreased from 10.1 billion dollars to 9.6 billion while garments exports reduced by 21 percent.

Makhdoom Amin Fahim said exports of engineering goods recorded a 26 percent rise. Exports of gems and jewelry increased from 213 million dollars to 280 million.

He said the government has held consultations with all the stakeholders at a difficult time.

Steps will be taken for the capacity of building of local industries under the new trade policy, he said, adding “technological development be undertaken for enhancement of exports of unconventional goods.”

He announced that investment will be made in 10 sectors under Entrepreneur Fund.

Trade diplomacy will be enhanced through Doha development agenda for gaining better access to international markets including those of the US and Europe.

OGDCL wins 6th Annual Environment Excellent Award

Oil and Gas Development Company Limited (OGDCL) has won 6th Annual Environment Excellent Award 2009 on the basis of best environmental track record, services and performance.
Federal Minister for Environment Hameedullah Jan Afridi gave away the award to Managing Director, OGDCL at a function held at Karachi.
This is second time that the state-run Company has bagged this award, the first being in 2007.
This award instituted by NEFEH with support of United Nations Environment Program and Federation of Pakistan Chambers of Commerce and Industry.
The ceremony was attended by government officials, corporate, environmentalists, experts, civil society and media. The Minister said the OGDCL has maintained its position as a key provider of safe energy through indigenous sources by observing highest standards of Health, Safety and Environment in compliance with statutory regulations. Affirming its stand as an environmentally responsible Exploration and Production (E&P) organization, the OGDCL won the Annual Environment

KCCI urges registration to safeguard exports

KARACHI: Anjum Nisar, President, Karachi Chamber of Commerce & Industry, in a letter to Suleman Ghani, Federal Secretary, Ministry of Commerce urged for registration of geographical indications (GIs) as Certification Marks by the competent authority.
He drew the Ministry’s attention towards the promulgation of Geographical Indications (GIs) Law, and establishment of GI registry in Pakistan.
In the relevant context, while highlighting that India had previously promulgated GI Law & has established GI registry, he lamented that India had already registered and notified Pakistani well known variety of “Super Basmati” as their own variety of rice.
Besides, many other products / produces were under registration process and may claim internationally these as their own products.
He focused that in Pakistan draft Bill on GIs was still awaited to be promulgated and implemented though it was already approved by the stakeholders, meetings called by the Intellectual Property Organization (IPO).

Petrol, gas and electricity subsidy to end: Shaukat Tarin

KARACHI: Finance Advisor, Shaukat Tarin has said that a decision for putting an end to the subsidy on petrol, gas and electricity has been taken.
Addressing a seminar on ‘IMF role in Pakistan economy’ under the aegis of Institute of Business Administration (IBA), the finance advisor said that the government was facing economic challenges.
He said that the current fiscal year revenue recoveries would amount to Rs1180bn, but yet the recoveries have been crucial problem for the govt and this was the reason that the prices of petroleum products were not reduced.
Shaukat Tarin said that serious notice has been taken of the FBR harassing consumers. He said that the focus for the next year would be to revive the economy after stabilization. He pointed out that attention would also be paid towards the revenue generation. He explained that the tax would not be increased and instead efforts would be made to expand the tax net. This would be carried out administratively and also on the policy basis.
He said that Pakistan’s three national enterprise—Pakistan Steel, Railway and PIA were cumulatively incurring losses of over Rs200 billion annually.
He said that relief would be given to the middle class in the upcoming budget, while the new National Financial Award (NFC) would be presented with the consensus of the four provinces.

SBP, ICAP agree for greater cooperation

KARACHI: The Governor State Bank of Pakistan Syed Salim Raza visited the Institute of Chartered Accountants of Pakistan (ICAP) here on Thursday and praised the institute for its work in assigned fields. The president of the institute, Asad Ali Shah briefed the governor about the overall progress of the profession and proactive contributions the Institute has made towards economic and fiscal policies of the country. He said that for this purpose, the Institute keeps close liaison with Security and Exchange Commission of Pakistan, State Bank of Pakistan and Federal Board of Revenue and frequent meetings are held with them. Both the institutes agreed for greater cooperation in future. —PR

STRIKES, HOLIDAYS, POWER BREAKDOWNS

Traders demand Karachi be declared as ‘calamity-hit’ city

KARACHI: All Pakistan Organization of Small Traders and Cottage Industries has demanded of government to give a tax exemption to the traders of Karachi for two years by declaring Karachi a disaster-hit area to compensate huge loss of traders owing frequent strikes, holidays and prolonged load-shedding.
APOSTCI Karachi chapter president Mehmood Hamid, Vice Presidents Ansar Baig Qadri, Abdul Majid and Usman Sharif said traders bear a loss of Rs140 million due to one-day strike in Karachi.
They said 12 to 14 hours of load-shedding have not allowed them to properly run their business even on normal days. Load-shedding is worsening with every passing day in Karachi and people have now become psycho patients, they said.
Traders are facing sever losses, business centers are closed and citizens cannot have a proper sleep in night due to frequent and prolong outages of electricity by the KESC.
They said all appeals for ending load shedding have fallen on deaf ear and in the current situation Karachi traders are not able to pay their taxes; therefore, a two-year tax holiday be given to them by declaring Karachi a calamity-hit area.

Karachi strike cripples trade activities

KARACHI: The continuous wave of terror and violence has badly affected economic activities in the city causing losses of billions of rupees to the traders, Daily Times found out on Saturday.

Violence in the city, which started from Friday night paralysed the whole city and even affected the interior province as well. Fears of further deterioration in the city halted business activities.

Chairman North Karachi Association of Trade and Industry (NKATI) Younus Khamisani while talking to Daily Times said that a city from where 80 percent of exports of various products are made and generate about 70 percent of the country’s total revenue should not be left at the mercy of political groups.

“It seems that the government has no interest in the city’s problems and has left its traders’ community helpless,” he complained and said that the Sindh government is doing nothing to ensure peaceful businesses environment for a better economy.

He said that NKATI has almost 2,000 industrial units that were badly affected by the strike, as less than 40 percent labour and workers could reach factories and the industrial zone had to suffer a loss of Rs 350 million to Rs 400 million on account of the strike.

“This was a total unexpected strike which not only hit the economic activities of the city, but largely affected that of interior Sindh as well,” member of managing committee of Korangi Association of Trade and Industry (KATI) Tariq Malik said. He said that KATI remained paralysed during the whole day, as 70 percent workers were not able to reach their industrial units and the industrial zone had to face substantial losses in terms of production.

President Karachi Chamber of Commerce and Industry Anjum Nisar said that this was the 10th day since July 1, 2008 that the economic activities in the city remained paralysed, and no production was observed during these days in the city.

He said that since July 2008 the country has faced a loss of about Rs 18 billion on account of taxes to the federal government, however almost Rs 25 billion to Rs 30 billion losses were reported in terms of production losses only from Karachi during these days.

Many traders face severe problems of supplying their consignments due to unavailability of transport and absence of peace in the city, besides rampant electricity load shedding has crippled the industrial production, he said.

A single day closure inflicts billions of rupees losses on the country’s exchequer, he said, adding that the country cannot afford such an unserious attitude towards trade and industry. He also criticised the government for not taking appropriate measures to ensure uninterrupted power supply to industries and residents of the city.

Chairman of Alliance of Markets Association (AMA), Muhammad Atiq Mir said that only stable political government could resolve the country’s problems, while the PPP-led government has proved a failure since forming the government.

About 25-30 percent of retrenchment has taken place in small markets in the wake of declining trade activities because of the government’s unfriendly business approach from the first day in the office, he said, adding that any rise in unemployment is likely to further collapse the existing peace in the country.

TDAP recommends PTA to boost exports

KARACHI: Trade Development Authority of Pakistan (TDAP) has recommended the government to enter into preferential trade agreements (PTAs) with other countries to get better access in their markets.
The recommendations approved by the Committee III of Federal Export Promotion Board (FEPB) will be sent to the government for inclusion in the next meeting of the FEPB headed by the Prime Minister of Pakistan.
The meeting was chaired by the Chief Executive, TDAP Syed Mohibullah Shah and attended by the representatives of various trade associations from parts of the country. They gave their suggestions for increasing market share of Pakistan exports in traditional and non-traditional markets.
The committee also suggested the government to continue to seek access to the major markets of the USA and European Union.
The committee recommended to sensitize Pakistani diplomats and commercial officers to the importance of export promotion and trade development issues.
It was also felt that commercial officers should spend two years at TDAP on completion of their foreign postings so that our business people and exporters can benefit from their experience of foreign markets.
The committee felt that some of the important sectors with great export potential like agro-food, minerals and human services should receive much larger credit allocation from banking sector as well as export finance so their potential could be developed and the country could benefit from their increased exports. —APP