EXTERNAL ACCOUNT, INFLATION AND INTEREST RATES

ASAD FARID (asad.farid@akdsecurities.net)
Mar 30 - Apr 05, 2009

The movement towards the restoration of overall macroeconomic stability has certainly gathered pace in the last three months with the country achieving the milestone of a surplus in the Current Account after persistent deficits in the preceding twenty months. On a cumulative basis, the CA deficit stands at US$7.45bn in 8MFY09 as compared to a deficit of US$8.64bn in the same period last year, down 13.7%YoY. With international donor agencies fully supporting Pakistan's nascent economic recovery, we think the external account will remain in a manageable state over the next four to six month period despite mounting pressures arising from the global financial crisis. This would of course depend on the GoP's ability to maintain fiscal order and keep the budget deficit in the range of 4%-5% of the GDP. Empirically it has been seen that countries which have current & fiscal accounts in surpluses have experienced low erosion in economic growth during periods of slowdown in external capital inflows - a phenomenon which is in process these days. Maintenance of economic stability is a necessity if growth is to recover in the coming year, where we expect real GDP growth to recover to 4-4.5% in FY10. Furthermore, we maintain our forecast given in our recent AKD Quotidian titled "CAD & Trade Breakup: trends and forecasts" dated 18th Feb'09 where we projected the Current Account Deficit to reduce to US$6-8bn in FY09 as compared to US$10bn in FY08.

  PLAN PLAN DO DO CHECK ACT
START A. UNDERSTAND B. PLAN C. COMMIT D. IMPLEMENT E. EVALUATE F. REVIEW
Business Case 1 Energy Audit 4 Energy Action Plan 5 Energy Coordination 2 Implement Energy Action Plan 6 Indicators 7 Revision 9
Pre-Sold assessment Analysis Tools 4 Roles and Responsibilities 1 + 5 Energy Team 2 Operation and Maintenance 6 Monitoring and Targeting 7 Improve 9
Energy Management Implementation Project Plan 1 Legislative & Regulation Framework 4   Energy Policy 3   Benchmarking 8  
Definitions Specifications         Full Energy Management Checklist 8  

 


IMPORTANCE OF 3A'S FOR SUSTAINABLE ENERGY DEVELOPMENT

ASAD MAHMOOD

Well, as the time is running away and day after day the words are changing their meanings so I thought why not developing a trinity of alphabets and acronyms with cavernous meanings. And, then I selected the alphabets A, H, and I. Starting with 3A's and leaving the 3H's & 3I's for the next articles, I would give you an insight in to the crux and importance of the trinity of alphabets and their impact. The change will come if we start focusing on these 3A's, 3H's & 3I's.

Accessibility means that a minimum level of commercial energy services (in the form of electricity, stationary uses, and transport) is available at prices that are both affordable (low enough to meet the needs of the poor) and sustainable (prices reflecting the full marginal costs of energy production, transmission, and distribution to support the financial ability of suppliers to maintain and develop these energy services).

Availability relates to the long-term continuity of supply as well as to the short-term quality of services. Energy shortages can disrupt economic development, so a well-diversified portfolio of domestic or imported (or regionally) traded fuels and energy services is required. Keeping all energy options open is the key.

The numbers (1 to 9) describe the time sequence for implementing energy management for the first time

Acceptability addresses public attitudes and the environment, covering many issues: deforestation, land degradation, or soil acidification at the regional level; indoor or local pollution such as that from the burning of traditional biomass fuels, or because of poor quality coal briquettes or charcoal production; greenhouse gas emissions and climate change on a global scale; nuclear security, safety, waste management, and proliferation; and the possible negative impact of the large dams or large-scale modern biomass developments.

Clean technologies and their transfer to developing countries like Pakistan is the key. As far as the Industrial Sustainability is concerned the implementation chart would be very useful tool under Deming's Plan-Do-Check-Act cycle.

The writer is the certified trainer on Energy Efficiency & Productivity Specialist, Team Leader (Energy Cell) Ministry of Industries & Production.