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July 30 - August 05 , 2001

Pakistan economy faces four risks

Pakistan's economy faces serious challenges chief among them are four major risks emanating from a variety of internal and external sources, according to World Bank's latest progress report: "Pakistan Country Assistance Strategy" (CAS).

First, to restore business confidence and build a sound basis for economic growth and poverty reduction, effective economic reforms are needed across a wide range of sectors.

Since these reforms challenge existing economic interests, a major risk is the commitment to the required pace and sequencing of macroeconomic and structural reforms. There are differing views in Pakistan on the need to deregulate and privatize all public enterprises, such as the utilities, due to a slowly changing conviction that privatization is the solution to these enterprises' problems.

The risk of some reversal particularly of the far-reaching governance reforms and proposed devolution plans remains since this government's term in office ends in eighteen months, and there is no clear indication of who will be the standard bearer of these fundamental institutional reforms. This risk may be mitigated by the government's intentions to communicate more actively its reform plans and actions to date with the population at large, in order to sustain the reforms beyond its mandate.

"There is also a risk that the devolution plan if hastily implemented and if captured by the powerful interest groups might lead to more problems," the report said.

A second risk is social discontent, arising from the difficult economic situation, and tough adjustment measures needed to address the balance of payments crisis. A third major risk relates to Pakistan's ability to finance its balance of payments in the face of its very weak, vulnerable starting point (extremely low reserves, a large debt burden, and poor export performance), as well as uncertainties about the balance of payments financing plan beyond 2000-01.

Saudi Arabia to fund Gomal dam, six other projects

Saudi Arabia has agreed to fund seven major development projects in Pakistan including Gomal Zam dam, Kachhi Canal, Makran Coastal Highway and Railways' carriage, tracking and signalling project.

Finance Minister Shaukat Aziz on Thursday held a wrap-up meeting with the visiting delegation of Saudi Fund for Development headed by Engr. Yousef I. Al-Bassam and jointly identified seven development projects.

Saudi Arabia had earlier agreed to extend $250 million for various projects. Official sources told that other projects which were identified included primary, secondary and vocational education project, a health project and an IT project. Engr. Al-Bassam was quoted by sources as having said that his country could consider increasing the level of assistance to Pakistan.

Dams' level surges after rains

Water level in all the main rivers has risen sharply owing to the unprecedented monsoon rains in the entire northern region of the country, an official told.

The total flow in all the rivers of the country, which was around 322,000 cusecs till Sunday evening has almost doubled in just 24 hours and on Monday afternoon it reached the level of 544,000 cusecs.

In Tarbela, the water level surged by six feet in a day. At 6 p.m. on Sunday it was recorded at 1481.85 feet and exactly after 24 hour on Monday, it rose to 1487.06 feet. However, the dam still has the cushion of 63 feet since the maximum height of dam is 1,550 feet.

The flow in river Indus upstream Tarbela on Sunday was 214,000 cusecs which has now reached 272,000 cusecs. The outflow is being maintained at 100,100 cusecs. The water level in Mangla rose by one feet in the 24 hours from 6 p.m. Sunday to 6 p.m. Monday. On Sunday evening, it was 1159.60 feet and on Monday it reached 1160.80 feet.

OGDCL intensifies exploration activity

The state-owned Oil & Gas Development Company Limited (OGDCL) has further boosted its oil and gas production and intensified the exploration activities during the quarter ending June 2001.

According to production figures available for the quarter ending June 2001, the total contribution of natural gas by the company was 76,903 MMCP with daily average production of 845 MMCFD. According to OGDCL statement this is one of the highest ever production of gas achieved by the company.

These production figures indicate an increase of 8,748 MMCF over the gas produced during the previous quarter i.e. January to March 2001, which was 68,155 MMCF with an average daily production of 757 MMCFD.

Three-year plan

The government has finalized a three-year structural adjustment and economic stabilization programme that primarily aims at reducing overall fiscal deficit to 3 per cent of the GDP by 2004. One of the important elements of good governance is to enforce fiscal discipline and strengthen country's fiscal position. For such an improvement, the reduction of fiscal deficit to 3 per cent of the GDP (Gross Domestic Products) by 2004 has been targeted as one of the major objectives of the government.

Over 10.7 million bales output

Federal Minister for Agriculture, Food and Livestock, Khair Mohammad Junejo said on Monday that despite water shortage the cotton crop cultivation target has been achieved and it is hoped that over 10.7 million cotton bales will be produced this year.

Talking to newsmen at the experimental farm of Central Cotton Research Institute, he said that last year, 10.7 million cotton bales were produced and this year, the figure will be surpassed because the maximum area has been brought under cotton plantation in the country.

Al-Khalid tanks

Pakistan will add another 300 indigenous Al-Khalid tanks to its armoured corps by 2007, defence sources told on Sunday. According to sources, Pakistan has achieved the capability of producing tanks of international standard, not only to meet its domestic needs but also supply these to friendly countries.