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1- INDO-PAK BORDER: LAND PRICES SHOOTING UP
2- PICIC: THE EMERGING FINANCIAL SUPER MARKET
3- HOUSING FINANCE & CONSTRUCTION
4- CUT IN DRUG PRICES
5- SBP & SECP TO BUILD STRONG REGULATORY FRAMEWROK
6- TAX EVASION AND CBR

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INDO-PAK BORDER
LAND PRICES SHOOTING UP

 

The sudden jump in prices both in Pakistan and India alongside the border is being taken as a strange development

By AMANULLAH BASHAR
Sep 08 - 14, 2003
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Irrespective of the location, the value of land can never be overestimated. But in case of the lands alongside the B-R-B canal adjacent to Waga border in Lahore, there is a surprising story. The lands near to border between India and Pakistan were the cheapest in value because of mounting border tensions between the two countries. However the situation has taken an amazing turn with the ever-increasing prices of the lands in Lahore region as well as across the border from Atari to Amritsar.

The sudden jump in prices both in Pakistan and India alongside the border is being taken as a strange development because the land adjacent to the borders was the least sought after land having the cheapest price obviously due to its exposure to the war threats between the two countries.

However, contrary to the past record, the value has jumped from rupees one lakh per acre to Rs5-7 lakh per acre during a short span of time in that area. The sudden increase in demand of land has proved to be a windfall for the habitants who are expecting that the price may go even beyond Rs25 lakh per acre if the current trend prevails in future also.According to reports, the increase in the value of lands was not confined within Pakistan, the similarly trend of booming prices has caught the people by surprise in Amritsar as well.

Experts dealing in the real estate business have attributed the price boom to the following reasons:

I- None-resident Pakistanis belonging to that particular area have started coming back. They are buying the land at the asking price.

II. Sudden increase in the home remittances which according to a report have touched to $71 billion last year in South Asian region. Pakistan had received over $4.23 billion during the fiscal 2002-03 which is unprecedented in the history of this country.

III. Another opinion on the situation is that it is the speculative buying by the business community with anticipation that large-scale bilateral trade between India and Pakistan would follow the enforcement of WTO rules allowing free trade in 2005 which seems very close to the fact.

Currently, efforts are being made for normalizing the bilateral relations between the two countries which might have encouraged the investors to buy land near border areas for building ware houses or industrial units to optimize their benefits.

 

 

PAK-INDIA RELATIONS

The World Bank Chief Economist, Nicholas Stern has recently said that improved relations between Pakistan and India would lead to improvement in the economy, greater stability and increased business confidence in South Asia.

Current account balance has posted surplus in Pakistan and India, benefits are accruing for Pakistan and Sri Lanka for improved security situation and enhanced government revenue would help boost growth in the region.

Speaking at the launch of World Bank's report on "Global Economic Prospects 2004, Registering the promise of the Doha agenda projects" the World Bank economist was of the opinion that rich countries have to lead by cutting high manufacturing tariff and by expending access to affordable medicines. The report emphasized that the developed world to reduce their subsidies, especially on agriculture. Developed counties must also provide technical assistance to developing countries.

According to the report South Asia pays 8 per cent taxes on its exports to industrialized countries that charge only one percent from other industrialist countries on their exports.

Exports from the region are declining and imports of manufactured goods are increasing. Textile wearing apparels and leather goods represented 46 per cent of the total pie in 1997, from 27 per cent in 1987.

The WTO agreement would generate $200 billion to $520 billion income for both rich and poor countries lifting an additional 144 million people out of poverty by 2015, which would encompass larger proposition of Africa and South Asia.

South Asia would be amongst the best performing regions, touching 4.6-5.4 per cent of GDP growth in next ten years, with East Asia 6 per cent, Middle East 3.5 per cent and others 3 per cent.

Growth in South Asia would accelerate to 5.4 per cent in 2003 achieving normal agriculture production a recovery in external trade and continued improvements in political stability and regional security. Pakistan, Bangladesh and Sri Lanka are expected to benefit from continued growth of services sector. Remittances have increased substantially during 2002 in Bangladesh, India, Pakistan and Sri Lanka in 2001. Almost $71 billion remittances reached developing world 40 percent of all the official developing assistance. If temporary of the labor is allowed up to 3 per cent of the total labor force, developing countries would be in a position to earn $160 billion additional income.

 

 

This positive forecast about the state of economy in South Asia Region seems to have generated a lot of interest among the investors to make fortune by purchasing cheaper land alongside the border lines.