FOREIGN DIRECT INVESTMENT INCREASES TO $1.8BN IN JULY-NOV
Feb 18 - 24, 2008
LAHORE: With major portion of investment from USA, UK, Norway and U.A.E, foreign direct investment (DFI) has recorded an increase of US $1.8 billion during July to November of the financial year 2007-08 showing 15.7% increase as compared to the same period of the last year.
Though the current economic situation has been sensitized due to assassination of Benazir Bhutto but the impact of liberal investment policies is yielding productive results, sources in the Board of Investment told PAGE.
According to Merrill Lynch the strength of Pakistan's economy lies in government's far reaching macro-economic and structural reforms initiated over the last several years which subsequently have propelled the economy to annual expansion of about 7 percent over the last five years. A new dynamism has taken hold in economic activity and social indicators have improved which together augur well for continued rapid development.
Sources in the stock market said the bench mark KSE 100 stock index rallied 47% during 2007 till December 27, 07, making it one of the best- performing emerging markets and nearly matching the gains of India's Sensex Index. Pakistan's political situation is overstated and our economic growth and un-penetrated private equity market offer big opportunities for investors willing to take risks.
Pakistan's banking assets in last five years have grown from Rs 2,223 billion to Rs 4,884 billion, advances from Rs 1,062 billion to Rs 2,603 billion, and deposits from Rs 1,678 billion to Rs 3,691 billion, sources in the banking sector said.
The Governor State Bank of Pakistan was awarded "The Best Central Bank Governor for Asia 2007î during the annual meeting of the world Bank and IMF held in Washington USA. This international acknowledgement rightly justifies Pakistan's strong institutional capacity in the final sector, during last one month, SBP has granted license to Barclays Bank, Oman's Bank Muscat and Japan's Nomura Holdings have agreed to take over Pakistan's Saudi Pak Bank for $200 million pushing ahead with the deal despite a political crisis in the economy.
In addition to this, Noor Islamic Bank of UAE and Qatar Islamic Bank of Qatar are also exploring business opportunities in Pakistan.
According to sources, the Ministry of Food, Agriculture and Livestock (MINFAL) and Agriculture University Faisalabad have signed a Memorandum of Understanding (MoU) on special program for food security (SPFS). According to the agreement, the University will offer one year diploma of "Veterinary Assistant", which would be started during the current year. The aim of the project is to educate young farmers about modern methodology of cultivation and farming. The University would train about 45 young farmers every year.
The project will help increase the income of small farmers to the tune of Rs. 7 billion annually and generate about 10,000 new jobs at village level in project area.
According to Federal Bureau of Statistics, the country's overall trade balance stood at $1.089 billion in July 2007 against $1.12 billion in the same month of 2006. The export growth of Pakistan is not indicating a remarkable development for the last three years. There is just 6 percent R&D subsidy that is being given to the exporters. With the 30-40 percent garments units' closure, about one million spindles of 160 textile mills are inoperative. In Lahore, Karachi, Faisalabad and Multan, most of the knitwear companies have already shut down.
The government has set export target of $19.2 billion for 2007-08, whereas in the first quarter of this fiscal year, exports grew at less than 5 per cent, to $4.25 billion, while imports grew by 8.5 percent, to over $8 billion.
A textile exporter said that the Ministry of Textile has written letters to all textile industrialists that 6 percent subsidy, that was being given to the exporters in the name of R& D, would now be used in real 'research and development'. It means that now the textile exporters will not be paid subsidy on exports.