Nov 26 - Dec 02, 2001
Pakistan may get $1.5bn package from China
Pakistan will get around $1.5 billion package of
bank deposits and investments from China when President Gen Pervez
Musharraf visits Beijing next month, diplomatic sources told.
The president is scheduled to pay a four-day visit
to the friendly country from Dec 20-24 to reciprocate Chinese premier
Zhu Rongji's visit here early this year, official sources said.
The package includes around $500 million of bank
deposits, $50-100 million of credit, Rs2 billion ($33 million)
investment in a holding company, besides agreements on at least four
power projects and mega Thar coal project, the sources said.
The two sides would also sign an agreement on
rollover of three Chinese deposits worth $500 million it had kept with
the National Bank of Pakistan as balance of payment support for
Pakistan. The deposit would be rolled over for a further period of
three years beyond February 2002.
An agreement for the establishment of
Pakistan-China Joint Holding Company (PCJHC), with a minimum paid-up
capital of Rs2 billion would also be signed. Both the countries would
contribute Rs1 billion equivalent amount each. The holding company is
expected to comprise six members, besides a managing director and a
The Chinese Export-Import (Exim) Bank would provide
a credit line of $50-100 million to a Pakistani bank for the purchase
of textile machinery and equipment from China by the Pakistani
importers. Commerce Minister Abdul Razak Dawood is currently in
Beijing to finalize details of this agreement.
Pakistan would also be signing an agreement with
Shenhua group of China for the development of Thar Coal Mine and
setting up of a coal-fired power plant in Sindh. The contract is being
offered to Shenhua group through negotiations instead of an
international competitive bidding as originally planned.
Govt, insurance cos to pool Rs750m
The government is expected to create a
"reinsurance pool" with an initial capital of Rs750 million
to provide cover to Pakistani companies for terrorism-related risk
from January 1, 2002.
This is being contemplated on the report of a task
force on insurance constituted by the Securities and Exchange
Commission of Pakistan (SECP) last month. The international insurers
have refused to provide risk cover to terrorism, civil commotion and
riots after January 1, 2001.
The SECP chairman Khalid Mirza told a news
conference on Thursday that the government would initially contribute
to the Reinsurance Pool an amount of Rs500 million. The Asian
Development Bank (ADB) is expected to provide $50 to 100 million which
would be increased.
Another Rs250 million would be contributed to the
pool by the insurance companies out of the premium they earn on
account of the insurance cover provided for terrorism, riot strike
damage (RSD), etc.
No cut in social sector funding
President Gen Pervez Musharraf has directed the
officials of the ministry of finance and the Planning Commission to
ensure that no cut is applied on social sector funding due to new
financial difficulties being experienced in the wake of the Sept 11
terror attack on America.
Official sources told that during cabinet meeting
held on Wednesday, the president said that the government could not
afford to neglect social sectors and that funds set aside for health,
education, rural development, women emancipation etc., should not at
all be reduced.
He said that social sector funding should be fully
protected during the current financial year. He said that he knew that
a tough time was being experienced due to the Sept 11 events. He said
funding for mega development projects should also be ensured so that
they could be completed on time.
The president will chair an important meeting on
Saturday to discuss issues relating to social sector funding, the
Banks to finance wheat buying
Banks will provide credit to flour millers for
procurement of wheat at 12 per cent mark-up under commodity
This decision was taken at a meeting held on
Tuesday under the chairmanship of the State Bank Governor Dr. Ishrat Husain.
According to an SBP press release the meeting was
attended federal food secretary Hafeez Akhtar; SBP deputy governor
Tawfiq A Husain; top executives of five major banks namely National
Bank, Habib Bank, United Bank, Muslim Commercial Bank and Allied Bank
and office-bearers of Pakistan Flour Mills Association.
China to extend financial support
China on Tuesday agreed to extend financial and
technical support to Pakistan for development of garment and leather
An agreement to this effect was arrived at a
meeting held here between the visiting Commerce Minister Razak Dawood
and his Chinese counterpart Shi Guang Sheng.
Razak Dawood told APP that the two sides decided to
enhance economic activity in the coming years, which could match the
level of political and diplomatic ties. He said the two countries
would give a major boost to their economic relations during the
forthcoming visit of President Pervez Musharraf to China.
The minister, who is accompanied by a group of
Pakistani investors, spent busy day on Tuesday, and met with several
Chinese officials and businessmen.
MoU signed for defence ties with Romania
Pakistan and Romania have decided to expand
military cooperation by importing arms and ammunition from each other.
Official sources said on Monday that a Memorandum
of Understanding had been signed between the two countries to this
effect. Pakistan Ordnance Factories chairman Lt-Gen Abdul Qayyum
signed the MoU at Bucharest with the head of Romarm, the defence
establishment of that country.
Romania will buy 125mm and 100mm tank ammunition
which had been made by Pakistan for Al-Khalid tank. In return,
Pakistan will import various kinds of arms and ammunition from Romania
to meet its requirements.