PM TRACKER
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MORE INVESTMENT FROM MUSLIM STATES SOUGHT

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From SHAMIM AHMED RIZVI,
 Islamabad

July 04 - 10, 2005
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As usual Prime Minister Shaukat Aziz remained extremely busy during the last week. He started the week with chairing a meeting of the cabinet committee on Privatization on Monday, which approved the sale of 26 percent shares of Pakistan Telecommunication Company Limited (PTCL) for $ 2.6 billion. He rounded off the week with meeting with a delegation of Islamic Chambers of Commerce and Industry.

In between he addressed the ambassadors and representatives of major donor countries and financial institutions based in Islamabad, met a delegation of Thai investors, addressed the representatives of the Indian Newspaper Society, had a meeting with the Country Manager of Asian Development Bank and a delegation of Pakistan Bar Council, besides meeting the President to review the budgetary measures and law and order situation in the country, had a meeting with the Chairman PIA to review the performance of the national airline and presided over a meeting of ruling alliance to review the ongoing development projects and coming local government elections. He also chaired a high level meeting to review the measures taken to meet any emergency in case of flood because of rising level of water in the rivers in NWFP and Northern Areas.

Applauding the efforts of the Privatization Commission for striking a good deal of 26 percent shares of the PTCL, the Prime Minister, in the meeting of the cabinet committee on Privatization, observed that the offered price reflected a true and correct value of the company. The meeting formally approved the bid of Emirate Telecommunication Corporation (ETISALAT), which offered 2.6 billion for 26 percent of PTCL shares at the rate of $ 1.6 per share, which was even better than the combined offer of the remaining two bidders. Singapore Telecommunications Corporation (Sing Tel) offered just $ 0.88 per share (Rs. 52.54 share) and China Mobile submitted $ 1.0633 per share (Rs 63.48) for the company, which earned Rs. 29.2 billion net profit in 2004. The reserve price of the company approved by the CCOP was just Rs. 62 per share.

The prime minister also promised to use 10 percent of the privatization proceeds on poverty alleviation and 90 percent on debt retirement, as provided in the law. However, in reality all the amount goes to the budget and is used as a major source to finance fiscal deficits. The Privatization Commission has proposed the government to track the proceeds under a separate budgetary head to ensure that the provisions of poverty spending are honoured religiously.

Prime Minister Aziz termed the bid as a vote of confidence by the world-class telecom operators in the government's policies, improved macroeconomic environment and transparency of theses. He observed that Pakistan enjoys very close and cordial ties with the United Arab Emirates. He hoped that Etisalat's entry in the market would open the doors for other potential investors to help bolster economic and trade ties between the two countries. "It's a major and very significant transaction, which is also very important for strategic point of view."

Aziz said there are natural synergies between UAE and Pakistan as well as the private sectors of the two countries. He also mentioned close political ties with UAE, saying: "President General Pervez Musharraf was there just a few days ago, and few weeks ago a UAE delegation visited Pakistan."

Aziz also outlined an ambitious privatization programme in the months to come, including the very attractive Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Oil and Gas Development Corporation (OGDC) and National Investment Trust (NIT), besides some small state owned entities (SOEs)

Speaking to Islamabad-based ambassadors and representatives of donor countries and financial institutions Prime Minister outlined "special initiatives " in the social sector to be launched in the current financial year and asked the donor countries and agencies to be "partners in progress" and help the government to achieve its development goals. He gave update on the special initiatives the government plans to undertake to alleviate poverty and improve the lot of the people. "We would require assistance and attention of donors, " for these special initiatives, he told them.

Listing major development programmes, Aziz said the government was launching Rs. 5 billion Khushhal Pakistan Fund to improve social sector and quality of life of a common man. The government intends to add a certain amount every year with an ultimate objective of raising the fund to one percent of the country's GDP. Priorities areas for the fund have already been laid down in short and long term plans, he added. "One village one product" programme was being initiated to help the people in rural areas, which have more incidents of poverty. The government will provide funds to improve the quality of the products that can also be exported, he said, adding that Japan and some European countries were sending their senior people to provide necessary expertise for the project.

 

 

Talking to a delegation of Islamic Chambers of Commerce and Industry (ICCI) led by its President Sheikh Saleh Bin Abdullah Kamel, Prime Minister invited investors from Islamic countries to explore investment opportunities in Pakistan. He told the delegation that the government, through structural reforms, has created an enabling environment for local and foreign investors. He referred to the consistency and continuity of policies and said liberalization and privatization were important pillars of Pakistan's economic programme. Prime Minster said foreign direct investment into the country has increased, particularly from Far Eastern and Middle Eastern countries.

Prime Minister identified information technology, telecom, real estate, tourism, agro-based industry and financial sectors as some of the potential areas for investment. The ICCI president on the occasion praised economic policies of the government; Shaikh Saleh Bin Abdullah Kamel presented a five point agenda to the Prime Minister for generating more resources in the Islamic countries to effectively deal with issues like poverty, hunger and unemployment.

The agenda included setting up of trade zones in all major Islamic countries with all modern facilities such as display centers, information centers, warehouses to promote trade and investment; utilization of Zakat among all Muslim countries for generation of employment and community based development programmes and schemes; result-oriented discussions and meetings for promotion of trade and industrialization; sharing of resources among Muslim countries to help them have better understanding about each other.

The ICCI chief is actively engaged in utilization of Zakat for generation of jobs for jobless people in Saudi Arabia. He told the Prime Minister that ICCI would like to take benefit from Pakistan's experience and potential to push forward its agenda. Shaikh Salah Bin Abdullah Kamel urged the investors that they should prefer Islamic countries to explore investment opportunities.

A Thai delegation led by Thai Deputy Commerce Minister Surlya Lapvisutisin called on Prime Minister Shaukat Aziz and discussed with him the bilateral investment between two countries. Talking to the delegation, the Prime Minister said that the people of Thailand, its government, and economy were a role model for developing world. The Prime Minster said that Pakistan had achieved a remarkable growth rate and was experiencing the same economic goals that Thailand was going through when its economy started expanding. He further observed that Pakistan had old and historic ties with Thailand and his recent visit to Thailand had proved a landmark and turning point in their relations.

The Prime Minister said that dialogues were being held between two countries to materialize the "Early Harvest Program" and Free Trade Agreement (FTA) that would result in strengthening the economic ties. Minister for Privatization & Investment Dr. Abdul Hafeez Shaikh, Minister of State for Commerce and Trade Hamid Yar Hiraj and Chairman Board of Investment Waseem Haqqi were also present on the occasion.

Talking to the delegation of Indian Newspaper Society, Prime Minister declared that sustainable peace in South Asia and good relations between Pakistan and India are linked to resolution of Kashmir dispute. He made it clear that Pakistan wants peace and progress in talks but that progress is dependent on discussions on the core issue. He admitted that the problem is complex but added that there must be enough progress so that people of Pakistan feel comfortable about the whole process of dialogue.

Mr. Shaukat Aziz said Pakistan is very sincere in its desire to resolve all issues but progress on all others including trade is linked to progress on Kashmir dispute. He said we must find a credible solution to the Kashmir issue. The three stakeholders Pakistan, India and Kashmiris can come up with options, which lead to solution of the problem. He said the history would show that the recent visit of Hurriyat leaders was a positive step.

The Prime Minister told Indian editors and newspaper owners that the two countries will have to follow a multi faceted approach to improve their relations. He said they should be open with each other and express views freely and every facet of their relationship should move forward in harmony.

"We are building a broad gauge railway line to link south of Pakistan with Indian Rajesthan," he said, adding that we are also looking at opening more trade items to land route. Referring to Pakistan's offer of energy corridor to India, Shaukat Aziz said, gas pipeline from Iran, Turkmenistan or Qatar to Pakistan and then to India would create inter dependencies.

Lauding the support of Asian Development Bank (ADB) to Pakistan, Prime Minister Shaukat Aziz observed that the ADB has been a major development partner of Pakistan and its contribution towards the country's socio-economic progress will be long remembered since it has always stood by Pakistan.

While talking to Marshuk Ali Shah, Country Manager, Asian Development Bank, the Prime Minister appreciated the support extended by ADB to the reform agenda pursued by the Pakistan government and their expertise and financial support for programmes like access to justice, micro credit, agricultural loan through Zari Taraqlati Bank and capital market reforms programme. These have helped Pakistan make major strides in the economy and achieve high growth, he added.

The Prime Minister said that the ADB is presently lending 1.2 billion dollars and has thus become one of Pakistan's major donors. He said that ADB has a tremendous future and specially appreciated the institution's role in Tsunami and hoped that it will help in establishing an early warming system in Asia.

Talking about the progress made by Pakistan, the Prime Minster said a lot of progress can be seen in our social indicators and this year we have allocated more than 16 percent than the previous year for sectors like health, education, gender programming and population welfare to raise the standard of living.

Addressing a group of lawyers in the PM House on the occasion of distribution of financial grants to the bar associations of the country, Shaukat Aziz said the government has been taking adequate measures for improving infrastructure in the courts and providing necessary training facilities to judges and lawyers to improve the judicial system to ensure quick and cheap justice to the common man. Improvement of the judicial system is on the top of the agenda of the government. Representatives of bar associations from across the country were present on the occasion.

The prime minister said necessary amendments had been finalized by the government to improve the working of the courts to provide speedy justice to the people and added that these amendments are with the standing committee of the national assembly. Laws are also being amended so that no one could register wrong FIR and added that after the approval of amendments, those who would register FIRs would be held responsible. He expressed the hope that these amendments would be passed by the National Assembly very soon to make the judicial system more effective. He said it is the basic right of every citizen that he should be provided speedy and cheaper justice.

The prime minister said the access to justice programme has been initiated with the cooperation of Asian Development Bank to construct new court buildings, equip the court rooms with computers, books and other infrastructure.

He said with the induction of computers in the courts there would be openness and system would improve.

In his meeting with the President, the Prime Minister reviewed geopolitical environment, law and order and budgetary measures for the next financial year. They expressed satisfaction over the fact that foreign direct investment (FDI) in the country had crossed $ 1 billion mark during the 11 months of the current fiscal year.

The President and the Prime Minister also reviewed the geopolitical environment in the region with particular reference to Afghanistan and Pak-India relations. They expressed satisfaction over the outcome of 'historic' recent visit by the leaders of All Parties Hurriyat Conference (APHC).

Speaking at the ceremony of Boeing 777-200LR, the prime minister directed PIA Chairman, Tariq Kirmani, to reposition the airline to global standards in the face of increasingly competitive international business environment.

The longest-range commercial airplane in the world is being delivered to PIA in December this year. The Prime Minister noted that performance of PIA had improved over the past years but it is time to transform the airline from national to international carrier. He said a diasporas of Pakistanis living overseas provide the core of PIA's traffic but we have to attract more business travelers and tourists to Pakistan.

Presiding over the meeting of the ruling alliance to review the ongoing development projects and local government elections, Prime Minister said the PML government would take along all the coalition partners in Sindh for early completion of the development projects and adopt a joint strategy in the forthcoming local government elections.

The meeting was attended by PML and MQM leaders including President Pakistan Muslim League Ch. Shujaat Hussain, Sindh Chief Minister Ghulam Arbab Rahim, PML Secretary General Mushahid Hussain Sayed, Farooq Sattar, Babar Ghauri, Ghous Buksh Mehr, Adil Siddiqui and Kanwar Naveed.

The Prime Minister later told reporters that the meeting discussed Sindh situation in detail and decided to adopt a joint line of action to expedite work on development projects. He congratulated the Sindh government for preparing a positive and development oriented budget.

The Prime Minster said besides development projects, the forthcoming local government polls were also discussed in the meeting and its was decided that all the coalition partners would follow a joint strategy in these elections. Coordination and mutual consultation between the coalition partners in the Sindh government would help all the partners and it would improve the pace of development, he added.

The Prime Minster assured the coalition partners to continue the consultation process in future on all the issues so that comprehensive policies were adopted to complete the development projects for the betterment of the masses.