PAK ORDERS SHELL SUBSIDIARY TO PAY $2.4 MN FOR BAHAWALPUR TANKER BLAST
Pakistan’s oil and gas regulator on Friday ordered a subsidiary of Royal Dutch Shell to pay about Rs257 million in damages and compensation for a tanker explosion that killed more than 200 people last month. The Oil and Gas Regulatory Authority (OGRA) has held Shell Pakistan Ltd (SPL) responsible for the blast in Punjab province on June 25 after the tanker carrying gasoline for the company rolled over, and villagers rushed to collect leaking fuel. The road accident was caused by non-professional driving/vehicle being lesser than required specs, the authority said. The report shows that they have completely ignored the safety standards of the vehicles procured from the contractors, OGRA spokesman Imran Ghaznavi told, referring to Shell Pakistan.
RUSSIA’S GAZPROM AND OGDC OF PAKISTAN INK JOINT VENTURE DEAL
In a major development, Russia and Pakistan’s energy giants entered into a joint venture deal that is expected to attract $3-4 billion in the South Asian country. Russia’s Gazprom International and Pakistan’s Oil and Gas Development Company Limited (OGDCL) signed the Memorandum of Understanding in Moscow aimed at mutual cooperation, joint ventures and use of state-of-the-art technology that would aid exploration and development. Russia has already expressed its interest to invest $8 billion in Pakistan and a major part of it will go in the country’s ailing energy sector. A senior official of the petroleum ministry said that the chief executive officer (CEO) of Gasprom International will arrive in Pakistan on Friday along with his team to discuss possibilities of investment in different projects. Pakistan is already in talks with Russia to invest $2 billion to build the North-South pipeline that would transport LNG from Karachi to Lahore.
ADB HINTS AT $6 BN IN NEW LOANS DURING NEXT 3-YEAR
Amid Pakistan’s growing financing needs, the Vice President of Asian Development Bank (ADB) on Thursday hinted at giving $6 billion in new loans to Islamabad in the next three years and showed its willingness to expand its policy-based lending. The ADB would give roughly $2 billion per annum to Pakistan during the next three years but the final disbursement would depend upon the projects’ readiness, said ADB Vice President Wencai Zhang, while speaking to PAGE-sources in Islamabad. Wencai is visiting Pakistan to assess the country’s financing needs for the period of 2018 to 2021. He said that the cost overruns and delays in projects processing and executions were somehow affecting the final disbursements. He said that Islamabad wants $2.5 billion per annum lending by the ADB but all would depend upon projects readiness. Wencai said that during fiscal year 2016-17 that ended on June 30, the Manila-based lending agency gave over $1.8 billion and the figure could have touched $2 billion but two projects could not be timely processed. Due to a low revenue base and high project financing requirements, Pakistan meets a significant part of its financial requirements by borrowing from foreign lenders. The vice president said that Pakistan’s short-term economic vulnerabilities have reduced and the country’s economic outlook was positive. He, however, maintained that the country needs to build on its gains by ensuring implementation of deep-rooted structural reforms.
SBP’S RESERVES FALL 1.42 PC, AMOUNT TO $16.1BN
Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased 1.42% on a weekly basis, according to data released on Thursday. On June 30, the foreign currency reserves held by the central bank were recorded at $16,143.3 million, down $232.7 million or 1.42%, compared to $16,376 million in the previous week, according to the central bank. Total liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $21,367.8 million. Net reserves held by banks amounted to $5,224.5 million. The decrease has been attributed to payments on account of external debt servicing. Last week foreign reserves increased due to official inflows including $622 million from ADB and $106 million from World Bank. In January, the SBP made a loan repayment of $500 million to the State Administration of Foreign Exchange (SAFE), China.
PAKISTAN’S GDP GROWTH RATE IS EVEN LARGER THAN THAT OF CHINA: HARVARD
Pakistan’s predicted annual growth rate over the next 10 years is nearly 6 per cent, according to the revised growth projections presented by researchers at the Centre for International Development (CID) at the Harvard University. This is a one-point GDP increase as in the CID’s earlier projections, Pakistan GDP was set to grow at 5 per cent by 2025. Although China’s huge economy (current GDP at $12 trillion) cannot be compared with that of Pakistan (current GDP at $300 billion), Pakistan’s 5.97 per cent growth rate is above that of China, which is set to grow by 4.41 percent. Led by Harvard Kennedy School, the research is called ‘The Atlas of Economic Complexity’. The CID’s growth projections are based on the measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.
PAK’S MANGOES STRUGGLE TO FIND MARKET IN US
Despite getting approval for zero duty under the generalised system of preferences (GSP) six years ago, Pakistani mangoes have failed to create a market share in the United States, a country that spends $0.5 billion on fruit imports. This was stated by Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Regional Chairman on Horticulture Exports Committee Ahmad Jawad who blamed the lack of facilities in Pakistan as the reason behind the trend. Exporters still complain that the process of exporting mangoes to the US is lengthy and costly,” he said, adding that high freight charges estimated at Rs370 per kilogramme are a major obstacle. The main obstacle is that mangoes have to be irradiated at US facilities, which involves booking and trucking the cargo to a particular facility, completing the irradiation process and taking it back to the market. Each step costs money and delays at any stage threaten the entire consignment’s quality and sale prospects. In all, according to exporters, each kilogramme costs around $8 before it can be sold to consumers, Jawad lamented, adding that this price, even without adding growing and cultivating cost of mangoes to it, is unaffordable for the majority of American consumers.
TAX EXEMPTIONS ON IT EXPORTS TO PROMOTE INDUSTRY
The federal government has extended exemption of taxes on exports of information technology (IT) products and services till June 2019 in federal budget 2017-18. Government sources said that the exemption on (IT) exports is meant to incentivise expansion and growth of the IT industry which can usher Pakistan into a new age of technological advancement. Over the last few years, the Ministry of IT and Telecom (MOIT) has taken several initiatives for the development of information and communication technologies (ICTs) especially in areas such as access, skills, marketing and governance in pursuit of a ‘Digital Pakistan’, a Ministry of IT official said. “MOIT has successfully created an enabling environment where citizens, companies and the government become technology enabled to avail opportunities being presented by the ‘4th Industrial revolution’,” the official added. Every year, MOIT works with the Ministry of Finance, Federal Board of Revenue (FBR) and other agencies to introduce incentives and initiatives that can increase the pace of Pakistan’s transformation into a knowledge economy.
JULY-MAY FY2017 REVISED: SBP CHANGES CURRENT ACCOUNT DEFICIT STATISTICS
Pakistan’s current account deficit position has changed and this time it is not just due to falling exports or rising imports. A revised definition means that the country’s external accounts just underwent a drastic change on Thursday. According to revised data of the State Bank of Pakistan (SBP), the current account deficit has widened by a massive 131% in the first 11 months (July-May) of the outgoing fiscal year (2016-17), standing at $10.64 billion compared to $4.59 billion in the same period of the previous year. The central bank earlier reported a deficit of $8.93 billion in the first 11 months of fiscal year 2016-17, which was $1.71 billion lower than the new figures. Mr. Sohaib-uz-Zaman, lecturer in KUBS, University of Karachi revealed that with the difference between exports and imports being the major determinant of the current account balance, a surplus or deficit reflects whether the government of Pakistan is a net borrower or net lender with respect to the rest of the world. Sohaib also said that the enormous rise in the deficit suggests that the government has been unable to manage its balance of payments position over the 11-month period. The deficit is growing due to heavy debt servicing, recovering oil prices and weak exports, he added.
LOAD-SHEDDING TO BE REMOVED BY END OF NOV THIS YEAR
Work on many energy projects is in full swing and load-shedding for the industrial sector will be eliminated by the end of November this year, said Islamabad Electric Supply Company (IESCO) CEO Basit Zaman, Thursday. Talking to a delegation of the Islamabad Chamber of Commerce and Industry (ICCI), which called on him, he said that due to energy shortage local industries will have to face load-shedding for a few months. However, he assured that by end of Nov the energy crisis will be resolved. Zaman said that T&D losses in IESCO were in single digit and there was no electricity theft in the cities. He directed relevant authorities to improve maintenance of feeders in industrial area to ensure regular power supply to the industry. ICCI President Khalid Iqbal Malik said that due to power outages production was suffering badly.
FY2017: SECP REGISTERS 8,246 COMPANIES, UP BY 34PC
The number of companies registered with the Security Exchange Commission of Pakistan (SECP) during 2016-17 was 8,286, recording an impressive growth of 34 percent compared to 2015-16. The total number of registered companies now stands at 81,493, according to a statement issued by the commission on Thursday. Despite lower economic activity in June 2017, the SECP registered 595 new companies in the month. Out of these, about 86 percent were registered as private limited companies, while around 12 percent companies were single member companies and 2 percent were registered as public unlisted, trade organisations and foreign companies. The growing trend in company registration is the direct result of numerous reforms and facilitation measures undertaken by the SECP.
AUSTRALIA, PAKISTAN: OFFICIALS DISCUSS VOCATIONAL TRAINING
The Australian Deputy High Commissioner Dave Preston Thursday met National Vocational and Technical Training Commission (NAVTTC) Executive Director Zulfiqar Ahmed Cheema and discussed cooperation in vocational training between Pakistan and Australia. Secretary Development Hannah Bricks and NAVTTC officials also attended the meeting, stated. Cheema briefed on the developments made by NAVTTC; technical expertise, new trends, training of instructors, upgrade of institutions and establishment of centres of excellence also came under discussion. Preston highly appreciated the initiative of NAVTTC for increasing the number of trainees to 10,000 for the Phase IV. Strengthening the TVET sector of Pakistan was crucial to its social and economic development, he added. The Australian delegation extended cooperation to boost Pakistan’s TVET sector and agreed to sign a MoU in this regard.