Jan-14 - 20, 2002
WB may increase aid to $750 million
The World Bank is considering increasing its annual
level of assistance to Pakistan from $500 million to $750 million in
the coming fiscal years to help achieve macro-economic stability in
The increased combined funding line could be
provided by both the International Bank for Reconstruction and
Development (IBRD) and the International Development Agency (IDA),
depending on the pace of depth of structural reforms. So far, Pakistan
has largely opted for IDA lending which is concessional and is offered
on 0.5 per cent service charges.
The bank's officials said that Pakistan should
continue to be a blend country, eligible to seek both IBRD and IDA
lendings. In future, Pakistan could seek IBRD lending but it is
offered on 6 to 7 per cent interest rate and its repayment time is 18
years compared to IDA's 45 years.
Another World Bank lending window - the
International Finance Corporation (IFC) which is currently focussing
on managing its existing portfolio, will consider several new
investments in the finance and gas sector where foreign investment is
needed to help develop proven gas reserves.
The IFC will explore other opportunities to support
private provision of infrastructure if the policy environment
improves, and is ready to support the privatisation process through
advisory and investment work. In this behalf, Multilateral Investment
Guarantee Agency's readiness to support infrastructure projects also
depends on the policy environment and the development effects the
project would generate.
Pakistan has been informed that MIGA would like to
expand its portfolio into manufacturing, Information Technology (IT)
and other priority areas such as Small and Medium Enterprises (SMEs).
Pakistan, which has earlier been disbursed $350
million Structural Adjustment Credit in June 2001 in one single
instalment, was likely to be extended SAC-2 of the same amount by the
World Bank. The officials of the ministry of finance were pursuing the
The Governor State Bank, Dr Ishrat Hussain on
Thursday, highlighting the need of Information Technology in the
Banking industry, said the central bank would provide all facilities,
besides offering different incentives to the banks for going on line.
Speaking at The Indus Entrepreneurs (TIE) Banking
Bazaar, he said most of the central banks in the world had already
adopted IT culture while SBP had spent $24 million on the first phase
of its IT plan that would be completed by December 2002. Another $12
million would be spent on the second phase of this project, he added.
A total of 31 vendors, suppliers and software
companies are participating in the exhibition organized by TIE at a
Dr Ishrat Hussain said that the completion of the
first phase of the IT project would enable SBP to have on-line
communication with the major players of the financial industry.
'Curbs on banks in US promote
New restrictions imposed by American banking
regulatory authorities on banks belonging to Muslim countries has
further promoted 'Hundi or Hawala' business, claimed Malik Bostan,
president, Forex Association of Pakistan.
Talking to APP here on Thursday, he said the banks
in the US could not accept cash for onward transfer and the client had
to submit money order or pay order to the bank.
"Documentation has forced a remitter to turn
to Hundi wala in America," chief of the 400 member Association
said. He urged the authorities to allow licensed moneychangers to
transfer funds up to $10,000.
The NBP and other Pakistani banks have merged
operations in the United States to remit funds under new rules.
According to the NBP, the average monthly inflow of
remittances from America through banks stand at Rs1.5 billion.
It is unfortunate that not a single shareholder
came forward to subscribe to the Sigma Leasing Corporation Limited's
issue of 5 million right shares in the ratio of one-for-two (50 per
cent). All of the shares valued at Rs50 million were picked up by the
sponsors, who were underwriters to the issue.
Italy wants 90m euro debt used on refugees
Italy has cancelled about 90 million euros of
Pakistan's foreign debt making it conditional for Islamabad to use the
finances to assist Afghan refugees, its learnt from UN sources.
According to the sources, the joint decision made
by Italian foreign minister Renato Ruggiero and finance minister,
Giulio Tremonti, is part of the Italian government's
political-cum-financial strategy in favour of Pakistan and
Forex body warns of counterfeit euro notes
Pakistan Forex Association has warned of
counterfeit euro currency notes entering the local market from outside
to destabilize Pakistan's currency and economy.
Trading of the euro has begun in the kerb on a
limited scale for about last one week and simultaneously the operators
of the counterfeit currency have also become active.
Crescent Leasing Corporation Limited (CresLease)
posted 37.3 per cent growth in after-tax profit to Rs42.3 million for
the year ended June 30, 2001, from a year ago taxed profit at Rs30.8
Investment hits new low, says ADB
By Our Staff Reporter
Despite the government's best efforts and the
successful implementation of the IMF's Standby Arrangement (SBA),
investors' confidence has still not been restored, says the local
chief of the Asian Development Bank.
"The investment rate has plummeted to the
lowest level since the 1950s. The falling investment rate has
adversely impacted the economic growth rate, which averaged 3.5 per
cent over the last three years. As a result, given Pakistan's high
population growth rate (2.2 per cent), real per capita income declined
from $473 in 1998 to $429 in 2001 because of the sharp depreciation in
the Pakistan rupee," he maintained.