Nov 21 - 27, 2011

Despite difficult economic situation on internal front, Pakistan possesses huge export potential, which is evident from the fact that the country's exports have witnessed an increase of 13 per cent in the first four months of fiscal year 2011-12 over the same period of last year.

According to the data released by trade and development of authority of Pakistan (TDAP), the exports during July-October 2011-12 were $ 7.899 billion, while in the corresponding period of the last year 2010-11 exports were $6.996 billion.

The imports during July-October 2011-12 were $14.313 billion as compared to $12.225 billion during the same period of the year 2010-11, registering a 17.1 percent growth.

The exports during October 2011 were $1.896 billion, down 2.2 per cent as compared to $1.938 billion during October 2010.

The imports during October 2011 were $3.607 billion registering a growth of 12.9 per cent over $3.196 billion in October 2010.


Pakistan and Indonesia have successfully concluded the negotiations process of comprehensive economic partnership agreement (CEPA) on the 8th round of negotiations held recently in Indonesia .

Pakistan and Indonesia signed the CEPA in November 2005 on the occasion of the visit of the President of Indonesia to Pakistan. Under the provisions of CEPA, in 2006, both countries commenced negotiations to conclude a preferential trade agreement, according to which, the agreement would ultimately create a 'free trade area' between the two countries.

Now both countries successfully concluded the negotiations process during the 8th round of negotiations held recently in Jakarta, Indonesia. Under the agreement, Indonesia agreed to offer market access to Pakistan on 221 tariff lines of on preferential rate. The Indonesian offer list include the products of export interest of Pakistan including fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans (ceiling, table, pedestal) sports goods (badminton and lawn tennis rackets), leather goods and other industrial products.

Indonesia also offered market access to Kino from Pakistan at zero per cent, which will provide a level playing field to this product in the Indonesian market.

Pakistan's offer list to Indonesia under the agreement includes a total of 288 tariff lines for market access at preferential tariff. Pakistan also agreed to offer to provide the same treatment on Palm Oil products from Indonesia as provided to Malaysia under Pak-Malaysia FTA and it means Pakistan will import palm oil from Indonesia at 15 percent Margin of Preference (MoP) rate.

Pakistan has been importing palm oil and its products from Malaysia and Indonesia .

The preferential market access provided by Pakistan to Indonesian palm products will have a positive impact on the overall economy of the country. It is expected that this will result in saving approximately US$ 300 million of foreign exchange of Pakistan .

It will also help in decreasing the prices of vegetable ghee, cooking oil etc in the country, which are going beyond the reach of common man and will create competition in the market which will discourage monopolistic trends.

It may be noted that the cabinet in its meeting held on 2nd November, 2011 approved the signing and ratification of the PTA between the two countries. The preferential trade agreement will be signed by the commerce ministers of both countries at a date and venue to be agreed through diplomatic channels.

The agreement shall enter into force 30 days after the date on which the parties exchange written notifications for completion of their respective legal procedures.


According to the Lahore Chamber of Commerce and Industry (LCCI) President Irfan Qaiser Sheikh, the industry is the biggest job provider. Hence, it is duty of the government to ensure availability of cheaper alternate fuel to the industry if it is unable to provide gas. The shortage of gas is not the only issue rather its improper distribution also remains a cause of worry.

The Lahore Chamber had sent an SOS call to the federal government on continuous energy disruptions as the gas and electricity were a prerequisite for the smooth functioning during winter. The government should divert all new-found gas to the network of Sui northern gas pipeline limited network, he added.

He urged the government to immediately take concrete measure to avert industrial closures and resultant massive lay offs.

"How can the industry afford to pay the all-time high mark up of 16 per cent when there in no gas for the industry," he said.

He said that around 40 per cent of the industrial units in Punjab run on gas and gas suspension means no production by almost half of the industry and a loss of millions of rupees to the exchequer. There is a global phenomenon that industry is given top priority whereas in Pakistan, it comes to the least and other sectors are given priority, he added. He also urged the government to get obsolete gas geysers and heaters with latest solar geysers and heaters to ensure gas to the industry.

The 'discriminatory attitude' of the government was not only denting its goodwill and reputation but had also put a question mark on its ability to manage and govern things, he said.

Pointing out that the gas suspension plan a death knell for export-based industry and productivity, the LCCI head sought the Prime Minister's intervention and help for a regular supply of gas to the industry in Punjab or removal of taxes on Furnace Oil.

How the industry would be able to manage export orders worth millions of dollars when there is no gas? What about the thousands of daily wagers who have a single source of income? And above all, he added, how the government would convince both the local and foreign investors for investment when it is unable to manage the supply of gas to existing industrial units.

He said that the gas suspension decision had sent a very negative signal to the foreign buyers. "Instead of coming up with some sort of relief package, the industry is being pushed to the wall. The gas suspension for three months is tantamount to throttling the industry to death."

Giving a breakup, he said that the industry was denied gas for 77 days in 2008-09, 100 days in 2009-10 and 160 days in 2010-11. "Over 72 per cent hike in power tariff in the last five months had made the scenario more complex and complicated. To run the industry on alternative fuel, including diesel and furnace oil at their existing price is not a viable proposition." Expeditious import of 500 million cubic feet gas per day LNG would considerably overcome the gas shortage for the industry, he added.

He said that the businesspersons were unable to understand that why the business community was not taken into confidence over industry-related issues and if the SNGPL was facing some supply related issues they must bring them to the notice of real stakeholders well ahead of time. "It would have taken about two years to set up a system for LNG supply, had the government been accepted LCCI proposal a couple years ago," he said.