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 5. TRADE  6. GULF



July 08 - 14, 2002


The government believes that the large scale manufacturing (LSM) sector would grow by 4 per cent in fiscal July/June 2001/02.

"On the basis of the large scale manufacturing in ten months to April 2002 we expect that LSM growth in fiscal 2001/02 would be around 4 per cent," says a senior official of Federal Bureau of Statistics.

The government had initially targeted 5 per cent growth in LSM. But during the first three quarters (up to March 2002) large scale manufacturing grew by only 3.2 per cent eclipsing hopes of meeting the annual growth target.

The third quarterly report of the State Bank commenting on the LSM growth behaviour in nine months to March 2002 has attributed the declining trend mainly to after-effects of 9/11 and the US-led war against Afghanistan. But the report says that the prospect for the next fiscal year and beyond appears to be less discouraging.

The textile sector grew by 4.26 per cent in the ten months to April 2002 up from 2.74 per cent in a year-ago period.

Within the textile sector cotton cloth recorded the highest growth of 14.15 per cent up from 12.14 per cent a year ago, the latest estimates of the Federal Bureau of Statistics reveal.

FBS sources say the country produced about 460 million square metres of cotton cloth in July/April 2001/2002 up 14.15 per cent as compared to July/ April 2001. They say that May-June figures, that are still not out, would show the continuation of the trend.

Cotton cloth alone has a weightage of five per cent in overall large scale manufacturing sector. So a 14 per cent plus growth in this sub-sector of the economy has a significance in LSM growth that has been projected at 4 per cent for fiscal year 2001/2002.

Whereas cotton cloth grew impressively in ten months to April 2002, jute products; woollen and carpet yarn and knitting wool (all clubbed together) recorded a heavy 11.4 per cent decline in production.


FMN Incorporated, a US-based industrial company, has expressed its strong intentions to invest $900 million in Pakistan in the development of infrastructure and heavy engineering sectors.

Thomas A. Nevin, Chief Executive of the company who met President Pervez Musharraf on Thursday told APP after the meeting that his company intends to set up its business in Pakistan with an initial investment of $900 million.

"We have come here to announce the intention of developing widely diversified heavy engineering facilities in Pakistan," he said.

Nevin said that the investment will create roughly over 2,000 job opportunities from the level of management down to the labour which would largely be filled in from within the country. "These jobs are tend to be better jobs as they will be durable and in the high-taxation sector," he said while adding, that the jobs will carry all the fringe benefits.


The off take of chemical fertilizers dropped to the level as low as 2,196,000 tons during 2001-02 and about 26 per cent less than the previous year, according to official statistics.

It was also the lowest in the past five years. During 2000-01, fertilizer offtake totalled 2,966,000, which was the highest in the past five years.

Official sources attribute the dramatic reduction in fertilizer use to a sharp decline in availability of irrigation water. Apart from this reason, a major factor was the increase in prices of fertilizers over the past year, as indicated by an analysis of statistics released by the Federal Bureau of Statistics.

Of the ten varieties of fertilizers, the prices of nine soared by 5.15% (Urea Sona)/5.26% (Urea Kisan) to 13.96% (C. Ammonium Sulphate) within one year.


The banking sector is raising serious concerns over the government's economic agenda in view of the October parliamentary elections, collaboration with the United States and the possible militant backlash.

"Domestic social tensions exacerbated by the government's collaboration in the Afghan war and possibility of a backlash of the government's crackdown on militants raises serious concerns regarding the government's ability to keep its economic agenda on track," said the Habib Bank Limited's economic research wing.


The Central Development Working Party on Saturday approved projects worth Rs35 billion, including Lyari Expressway, Satpara and Bhasha dam, an official told.

The CDWP meeting, presided over by Deputy Chairman Planning Commission Shahid Amjad Chaudhry, was also attended by officials concerned of the provincial governments.

The construction work on 16.5-km-long Lyari expressway was initiated in April, 2002, which is scheduled to be completed in 36 months.

The expressway would cost Rs5.081 billion, with a sum of Rs500 million having already been expended on it up to June, 2002. In the public sector development programme, Rs900 million have been set aside for the project.


The government is likely to promulgate the Small and Medium Enterprise Development Authority (Smeda) Ordinance in the next month.

Smeda chief executive officer Iqbal Mustafa stated this while talking to reporters at the launching ceremony of a book on "Secrets of electronic commerce a guide for small and medium-sized exporters" on Saturday.

He said that the cabinet has approved the draft of the ordinance, which was awaiting approval from President Gen. Pervez Musharraf.

Elaborating the main features of the proposed ordinance, Mustafa said under the ordinance, Smeda will have a full-fledged board of directors, which would decide policy matters.