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Jan 31 - Feb 06, 2000

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Banking law to be amended

Fund to help stabilize cotton prices

The government is finalising a proposal to create a Price Stabilization Fund for helping the cotton growers in time of crisis.

"Our growers have suffered last year due to fluctuations in the cotton prices for which we need to create this Price Stabilization Fund", said the Minister for Commerce, Industries and Production Abdul Razak Dawood. "We require some kind of institutional network to look after the interests of our cotton growers".

He told a group of reporters here on Thursday that the businessmen related to the textile sector also believed that cotton growers had faced lot of losses last year and that they should be compensated on a permanent basis by having certain Price Stabilization Fund.

The commerce minister pointed out that the details of the proposed fund were being discussed and finalized to be incorporated in the new textile policy, being announced in March next.

Simultaneously, he pointed out that the military government would be coming out with a new industrial policy to cover the important sectors like engineering, agro based industry, chemicals, sugar, cement, construction and software industry. "These areas have been identified to increase our exports by creating a real export culture".

Dawood said that a committee headed by Tariq Sehgol has been entrusted the job of formulating recommendations for making a new textile policy by having input from all the concerned sub sectors like ginning, spinning, weaving, processing, growers, and the exporters of bedware, knitwear and towels, and other garments.

He said one of the major worries of the government was how to meet the World Trade Organization's (WTO) deadline of Ist January 2005, when all quotas will finish and the goods could be exported only on the basis of quality control as well as better price mechanism.

IBRD team briefed on capital market

Risk management initiatives taken by Karachi Stock Exchange (KSE) helped prevent cases of default by members during the period of uncertainty said Chairman of the Exchange, Arif Habib.

Briefing the visiting delegation of World Bank Financial Sector Assessment Mission, he cited various reasons responsible for the deteriorating market conditions during last few years.

Foreign cos oppose gas price formula

The military government's efforts to attract foreign imvestment through Pakistan's lucrative oil and gas sector may not yield positive results as foreign oil and gas exploratory companies have not accepted the gas price formula proposed under the New Pricing Policy (NPP), saying that it severely erodes the value of any investment and it is not economically sustainable.

Under the '94 and '97 petroleum policy statements, the Pakistan government had set up four zones, depending on their risk profile and set their gas prices accordingly. The policies guaranteed payment in foreign exchange for the full amount payable to foreign petroleum companies. These incentives stimulated increased exploration activity in Pakistan, which resulted in the discovery of over 6 trillion cubic feet (TCF) of gas reserves in the past three years. This response was much better than what the government had expected.

Shaukat Mirza appointed PSO chief

The military government Tuesday appointed managing directors of Pakistan State Oil (PSO) and Sui Southern Limited on contract besides transferring some bureaucrats.

Shaukat Mirza has been made managing director of PSO and Mukhtar Ahmad has been appointed as MD Sui Southern Limited.

Plan for boosting gas output to trim oil imports

Pakistan could pump an extra 1.2bn cubic feet of natural gas per day in the next seven years to trim a rising oil import bill, a plan presented to the military-led government said.

The plan, obtained on Wednesday, also proposes that the government encourage more exploration because the gas supply and demand gap will start widening from 2007 onwards because of the depletion of existing fields.

The plan on 'Optimal Utilisation of New Gas Discoveries' was presented to the government jointly by the two state-run gas distribution companies—Sui Southern Gas Co and Sui Northern Gas Pipelines.

'The gap will still be 400 mmcfd (million cubic feet per day) in the year 2006/2007, increasing to 500 mmcfd in 2007-2008 and ultimately 800 mmcdf in 2009-2010,' the plan said.

It says both companies need investment of over $230 million to carry the new gas to the market and producers should be encouraged to invest in the infrastructure plan.

Progressive textile policy under study

A high-level meeting was held on Tuesday which discussed formulation of a long-term progressive textile policy.

Minister for Commerce Industries and Production, Abdul Razak Dawood chaired the meeting which was attended by stakeholders of textile sector.

It was participated also by the Minister for Food and Agriculture, Shafqat Ali Shah Jamot, Sec. Industries and Production, representatives of growers, ginners, spinners, weavers, garment manufacturers and exporters.

The commerce minister said that 'textile is our main industry and it is going to get our full attention in future as well. No doubt, we are trying to diversify our export base but textile will retain its predominant position'.

30pc shares to be offloaded

Minister for Finance Shaukat Aziz chaired a high-level meeting, which discussed in detail the early privatization of stateowned enterprises specially offloading 30 per cent government's shareholding in the oil and gas sector.

Official sources said that the finance minister was given a briefing on the disinvestment process by Chairman Privatization Commission Salim Altaf. Aziz was told that arrangements were being finalized to undertake the privatization of major state entities from February next.

Negotiations under way

The ADB mission on finance and industry on Saturday held a meeting with Security and Exchange Commission of Pakistan (SECP) to review progress regarding capital market development programme (CMDP).

The mission which arrived on January 20, will hold further meetings with SECP to review the policy performance compliance for the release of $125 million second tranche under capital market development programme loan, informed sources said.