18 - 24, 2001
Tight monetary policy planned
The government has worked out a three-year 'tight monetary
policy' to discourage unnecessary monetary expansion. However, it will be
ensured that adequate credit is available to the private sector for productive
According to official sources, the three-year policy (2001-
2004) has been conceived after the IMF raised objections saying monetary policy
was 'insufficiently tight' and needed immediate attention of the government.
The government will ensure tight monetary policy by
increasing foreign exchange reserves to cover the imports for minimum of three
months and by controlling the growth of money supply in a manner compatible with
the growth of nominal Gross National Product (GNP). The tight monetary policy
will also be ensured during the three years period by continuing the policy of
liberalizing interest rates to improve efficiency of resource allocations and by
ensuring consistency among macroeconomic targets of growth, inflation, monetary
and external accounts with better coordination of fiscal, monetary and exchange
According to the three-year plan, the deficit in trade
balance, in nominal terms, is expected to decline from 1.3 billion dollars in
2000-2001 to 828 million dollars in 2003-04. This would be made possible by
exports growing at a faster rate than imports. The increase in exports is
predicted on increased production of cotton and rice as well as revival of the
manufacturing sector, improvement in quality and competitiveness of value-added
products and adherence to the delivery schedule.
The exports are thus projected to increase on average by 9.1
per cent. Imports are projected to increase on average by 6.8 per cent. The slow
growth in imports has been envisaged in view of large imports substitution in
such commodities as wheat, edible oil and crude oil and its products and a fall
in their prices.
Economic revival plan discussed
The programmes for economic revival in Sindh specially the
provision of loans to small businessmen came under discussion at a special
meeting of Economic Development Council (EDC) held on Tuesday with Sindh
Governor, Mohammadmian Soomro in the chair.
The meeting was conducted by Vice Chairman EDC, Shahid Firoz
and attended by Sindh Finance Minister, Dr Hafeez Shaikh, Local Government
Minister Dewan Yousuf Farooqui, Chief Secretary Sindh, Managing Director KWSB,
Director General KDA, Administrator KMC and other high ranking officials of Sindh.
The EDC members, who attended the meeting included Dr Shams
Kassim-Lakha and Nessar Ahmed of CresBank. The 4-hour long meeting addressed all
issues relating to the Programme for Economic Revival of Karachi. The decision
taken on the occasion included the provision of facilities for sports and
recreation, transport civic amenities, municipal upgradation and speedy
implementation of projects under Khushhal Pakistan Programme.
Concessions worked out for industry
A number of new concessions have been worked out for the
local industry in the budget for 2001-2002 including rationalization of income
tax rules and regulations as well as reduction in input cost of the agriculture
Official sources said on Monday that since tax survey
campaign has culminated in a "big success", bringing in more
tax-payers, hardly new taxes were being contemplated in the new budget.
There will be certain "adjustment and
re-adjustment" in existing taxes and duties to achieve roughly Rs460
billion revenue collection target in 2001-2002. "And we would manage to
achieve the target hopefully without imposing new taxes," said a senior
official of the ministry of finance. The new budget, he pointed out, would, by
and large, be a welfare-oriented budget to provide relief to the common man and
the salaried class.
Petroleum exploration licence awarded
The government on Monday awarded petroleum exploration
licence for Karak block in Kohat (NWFP) to a joint venture led by Orient
Petroleum Inc (OPI). An official announcement said that OPI-led joint venture ,
comprising Zaver Petroleum Corporation and government holdings, was awarded
through competitive bidding. OPI has 90 per cent shares while Zaver Petroleum
and government holdings hold five per cent shares each in the licence.
The JV would make a risk investment of about $2.6 million for
an exploration programme comprising geological and geophysical surveys and
drilling of an exploration well during the initial three year's term. The
agreement was signed by M. Abdullah Yousaf, secretary petroleum on behalf of
Pakistan government while John E. Kennedy, CEO and President of OPI, signed the
agreement for his company. OPI, the operator of the licence, is currently
operating five concessions including three producing properties like Dhurnal,
Bhangali and Ratana in the Potwar basin of Punjab.
Cotton sowing area up
The cotton sowing area in the Punjab has increased by 6.2 per
cent over the corresponding period last year. According to reports received up
to June 9, the sown area so far is 4.35 million acres against the last year's
4.09 million acres. The total area under cotton crop during 1999-2000 was 5.897
million acres, so the area sown so far is 72 per cent of the last year's total
acreage, says a press release issued on Monday.
Package for shipping industry soon
The government will soon announce a package of incentives for
the development of shipping industry. "The package is being worked out by
the Central Board of Revenue," official sources said on Monday. The
government has decided to adopt a liberal policy to attract foreign investment
in the shipping sector. The package will be part of the shipping policy, aimed
at promoting shipping business, the sources said. The government has also
approved in principle the draft Pakistan Merchant Shipping Ordinance 2001 to
replace the Merchant Shipping Act 1923.