At end of December 2009, country’s total EDLs stood at unprecedented $55.675 billion or 32 percent of GDP, while in June 2008 these stood at 46.16 billion dollars (27.6 percent of GDP), the State Bank of Pakistan (SBP) reported Thursday.

The stagnant exports and foreign exchange earnings, together with heavy reliance on foreign resources, were the main factors contributing to the worsening of the external debt indicators.

In six-month period, from June to December 2009, these increased by $3.34 billion, as on June 2009, liabilities were recorded at 52.33 billion dollars.

According to the bank’s figures, out of these liabilities, external debt stood at $54.453 billion against $50.76 billion at end June 2009 and $53.99 billion in September of the same year.

The Ministry of Finance latest summary of Pakistan’s consolidated federal and provincial expenditure figures also reported that during July-December 2009-10, on external debt servicing, Islamabad has spent about $375 million that is 0.2 per cent of GDP.

Already the debt-servicing burden has progressively reduced the government’s ability to undertake much needed infrastructure development projects, and further rise in debt burden would hamper country’s efforts for social and economic development, economist believe. Debt service burden has also a negative impact on labour and capital productivity, which adversely effects economic growth.

Besides, back-record of external debt of the country also reveals a significant increase in last few years. As on June 30, 2003 external debt stood at $32.46 billion, June 2004 ($32.93 billion), June 2005 ($34.04 billion), June 2006 ($35.89 billion), June 2007 ($39.5 billion), June 2008 ($44.87 billion), June 2009 ($51.06 billion) and now at the end of December 2009, it has jumped to $54.45 billion. Increased debt burden could negatively affect economic growth by reducing capital accumulation and productivity.

Foreign exchange liabilities comprising on central bank deposits, foreign currency bonds and other liabilities almost stood stagnant at $1.22 billion since June 2008.

Independent economists believe that the increase in public debt could have severe long-term direct and indirect negative impact on economy. They say the government to make strong fiscal adjustments instead of more borrowing. Otherwise, in coming years, debt problem will cause severe macroeconomic consequences like low economic growth, closure of businesses, rising unemployment and poverty, deterioration of physical and human infrastructure, high inflation, pressures on exchange rate, discouragement of both domestic and foreign private investment etc.

Lessening over-dependence on external debt needs improvement in economy’s competitiveness in order to stabilize macro imbalances and helps mobilize domestic resources.

A viable monitoring system was also a need of the hour, which could ensure proper and systematic utilization of the external borrowings for the developmental projects. Provision of a favourable macroeconomic environment was also needed for reducing mismanagement to promote economic growth.

He said that textile is the most important sector of national economy adding that millions of people are earning their livelihood from this sector and also bringing foreign exchange for the country. 

He said unfortunately textile sector was ignored in the past, however, PPP government is taking measures for developing technical education in textile sector.

Government is going to establish separate departments in different universities of the country and different colleges will be constructed where students would get modern education in textile sector, he added.

He said that educated and skilled workforce can play their vital role for the development of this sector as well as for the national economy, he added.

Federal Minister further said that vocational training institutes would also be established in different areas of country so that human sources could be increased through  modern training into textile sector.

Rana Farooq Saeed Khan said that government is taking comprehensive measures to provide higher education to meet requirement of the modern era so that they can bring good name for the country. -APP

“Yes, the President‑elect does support the legislation that you (Kerry) were part of, Vice President‑ elect (Joseph) Biden and Senator (Richard) Lugar also. We want to try to begin to some extent to separate our military aid from our non military aid.”

“The tripling of non‑military aid is intended to provide resources that will both support the Pakistani people and also give some tools to the democratically elected government to try to start producing results for the people of Pakistan,” she told the Senate Foreign Relations Committee at her confirmation hearing.

The former first lady appeared for her hearing exactly a week before the Obama Administration takes charge on January 20.

Clinton was asked by Senator Kerry if she could affirm that the new administration remains absolutely committed to the Biden‑Lugar measure (now likely to be named Kerry‑Lugar) that seeks to enhance economic assistance for Pakistan to $ 1.5 billion annually over a number of years.

On the military aid aspect of the legislation, she said, the Administration wants to “look hard and see whether we can condition some of that on the commitment for the counter‑insurgency, counterterrorism missions.”

“So we certainly are inclined to support, where appropriate, the legislation you are referring to,” she added.

The New York senator, who has been a member of the influential panel, told her fellow lawmakers that Pakistan faces the complex problem of extremism but its government is determined to curb the menace. 

“Pakistan has a particular complexity because of its nuclear weapons capacity. But the democratically elected government has been saying a lot of the right things with respect to the threat posed by extremists and terrorists particularly along the border and in the FATA region in Pakistan.”

“So, I am hopeful that we will have a very active, positive relationship with the new Pakistan government. I know that there is a lot of work being done by the outgoing Administration to deepen ties between our country and various institutions in Pakistan,” she stated in answer to a question from a member of the panel.

At the same time, she reminded that the menace of violent extremism is a complicated problem in the region.

“But this is a tough problem. It is a very complicated problem.  It has many dimensions to it. As you pointed out, the relationship with India, the relationship with Afghanistan. The role that Iran and others are playing in that region.”

“We have to approach this with the same level of attention and comprehensive understanding that our military is attempting to do as it ramps up our troop commitment in Afghanistan and works more closely with the government of Pakistan to protect them from violent extremists as well as to root out al‑Qaeda and other remnants of the terrorists network so that they don’t find safe haven in Pakistan to plan attacks against us or any other country.” 

Chairman Senate Kerry, who has succeeded Vice President‑elect Joseph Biden, underscored the need for supporting Pakistan in overcoming its economic challenges.

He raised his concern on a number of counts with respect to pursuance of the war on terror in Afghanistan and pointed out the need for clear definition of the U.S. goals. He suggested a review of the terms like war on terror and their possible replacement with counter‑insurgency.

Clinton sounded agreeable to chairman of the panel Senator John Kerry’s call for examining efficacy of targeting and taking out suspected terrorists in tribal areas along Pakistan‑Afghanistan border in the face of counterproductive impact of such actions on hearts and minds campaign. -APP

India last month refused to send its team to Pakistan amid heightened tensions following the November attacks on its financial hub Mumbai, which New Delhi has blamed on militants based across the border.

India’s tour cancellation cost the Pakistan Cricket Board (PCB) “at least 40 million dollars (2.8 billion rupees),” PCB chairman Ijaz Butt told reporters after addressing a hearing of the Senate’s sports committee.

He admitted that the PCB was in a “terrible financial position.”

“Emergency steps are needed, otherwise we will have no money and will have to carry a begging bowl before the government,” he said, adding that the PCB’s reserves had fallen from 3.3 billion to 1.5 billion rupees over the past two years.

Pakistan has been a virtual no-go zone for foreign teams since the September 11, 2001 attacks on the United States, which sparked major security fears for teams concerned about suicide and other attacks.

The cancellation of India’s tour was the third major cricket event called off in Pakistan last year, after Australia refused to tour in March and the ICC postponed the elite eight-nation Champions Trophy set for August 2008.

Rescheduled for September-October this year, the Champions Trophy is likely to generate five million dollars for Pakistan if it goes ahead, Butt said.

Butt also said that he inherited a troubled financial set-up when he joined the PCB as chairman last year.

“Our finances stood at 42 million dollars in October 2006, but when I took over as the chairman in October last year it was just 19 million dollars,” Butt told the committee.

The PCB convinced Sri Lanka to replace India who will tour Pakistan in two segments, playing three one-dayers from January 18 and then returning in February for a two-Test series.

Butt said he fears Australia will not tour Pakistan later this year but added that three neutral venues — Malaysia, the United Arab Emirates and England — were options in ensuring the series goes ahead.

“We want to host Australia in Pakistan but if they have their security concerns, these are the three venues which will come up for discussions when I meet officials of Cricket Australia in Perth later this month.”

The PCB chairman is due to attend ICC’s executive board meeting from January 31-February 1 in Perth, Australia. -AFP

There exists a big scope of cooperation, because both the countries are members of WTO, he added.

Igor Pasco wished of technology transfer in the fields of mineral, gas and health diagnostic system.

The health diagnostic system could be used in backward areas of the country where hospitals are short.

The health diagnostic system could overcome the dearth of dispensaries in the far-flung areas of the country up to a larger extent.

Ukraine could use the Gawadar Port via Tajikistan for an easy access to the Gulf countries, the Federal Minister said.

Makhdoom Amin Fahim asked Trade Development Authority of Pakistan (TDAP) to start level playing field with Ukraine government for better trade links and commercial ties by starting initial meetings.

He said the best way to involve the people in tackling climate change issues was to develop incentive based policies that attract private entrepreneur and general public.

The briefing was given by Dr. Ishfaq Ahmad, Chairman of the Task Force on Climate Change and Advisor Science and Technology.

It was attended by Kamal Majidullah, Special Assistant to Prime Minister on Water Resources and senior officers and federal secretaries of related ministries.

The President said that climate change was one of those global issues for the tackling of which international assistance was readily available.

He called for identifying the sources of international funding and cooperation to assist the government in areas such as efficient energy mix, increasing yield per acre and optimizing the use of water.

The President said that developing countries like Pakistan would pay a heavy price tomorrow for inaction today.

Problems cannot be avoided by delaying decisions as it only creates crises, the President added.

President Zardari also called for studies to determine the most efficient, economical and environmentally clean energy mix for Pakistan.

He said that studies carried out in the past in these areas should be examined and implemented wherever practicable.

The President also called for following up on the Environmental Protection Act that was passed by the Parliament about 15 years ago, he said.

He said that a strategy should also be devised for educating public opinion in the climate change and environmental issues to help implement the decisions made in these areas.

He said that climate change and degradation of environment was not only a challenge but also an opportunity and advised the government to explore the opportunities it offered.

He said that climate change and environmental issues had occupied international centre stage because they pose major development challenges that call for concerted action.

The President said that although the global climate change had been a cause of concern for the past several decades but more recently it had drawn attention of world governments, politicians, scientists and economists.

President Zardari said the issue of climate change had created new challenges in energy efficiency, renewable energy, water use, afforestation, agricultural improvement, power generation and even disaster management.

The President also said that such meetings should be held regularly to review what has been done, what requires to be done and what more can be done.

He also suggested to search for models in other countries that can be emulated in Pakistan.

He particularly identified water scarcity, land use and minimizing damage to environment as the areas where Pakistan can seek and adopt models from other countries.

Earlier Dr. Ishfaq Ahmed in his briefing explained that 8 working groups had been formed with 40 subject specialists on climatology, water, agriculture, energy, international cooperation for financial and technical support, economies, communication and awareness raising.

He said that most serious challenges for Pakistan due to climate change were the threats to its water security and food security.

Other challenges identified was increased health risks, increase in deforestation, risks to fragile marine and loss of biodiversity.

The Chairman of the Task Force recommended that Pakistan should devise and implement a National Policy and Plan of Action on Climate Change, with Ministry of Environment as the focal point for coordinating these activities.

He also recommended setting up of a National Council on Climate Change to oversee the efforts in all climate change related areas.

He was replying to media questions after chairing a meeting to review the performance of Pak‑Lybia Holding Company Ltd at FTC building here Saturday.

He said that mark up was inflation related and it was still stuburn. It is not in country’s interest to lower mark up rates unless inflation is brougth down, he noted.

“However, the government is looking into the possibility of providing relief to textile sector because they are facing problems of high interest rates and power crisis”, he said.

Tareen noted that strike was not a very constructive way of moving ahead. “We will sit together with the Governor of State Bank of Pakistan (SBP) to work out some relief including comfort in 12 to 18 months in repayments to improve their cash flows while they will continue to pay mark up on their loans, he added.

To another question about the news of a negative economic growth, he said that though industrial sector has recorded a negative growth in the first five six months, the agriculture and services sectors will witness a postive growth due to high prices and strong banking and financial sectors.

“I do not see any decline in GDP growth below the set target, but only time tell”, he observed.

To a question about the inflows, the Advisor said the country will get $ 156 million this month on account of expense of “war on terrort”. But this will a payment uptill April 2008, The rest of the payment is still pending. Uptill now we have not received any payments in connection with war on terror.

He said said that the government receipts have improved due to reverse flow in T‑bills on high mark up, better revenue collection and foreign inflows. This is the reason that the government has retired its overdraft.

To a question regarding his visit Pak‑Lybia Holding Company, he said that DFIs and investment companies were set up for attracting investment from their joint venture countries and play a role in infrastructure and capital market developments.

They had started working as commercial banks and played in stock market and were turned into casinos. This is the reason why I am visiting every DFI to invite their attention towards their actual objectives, he opined.

Tareen said that Pak‑Kuwait Investment Company has invested billions of rupees in stock market. They had wasted good money in the stock market.

We will impose a “ban” on investment by DFIs and investment companies in the stock market. They will be allowed only a limited investment for the development of capital market.

They will do a core business of infrastructure development and capital market development and to create a long term bonds.

They must finance projects of public‑private partnerships of the government. They must bring in investment from partners countries like Libya, Oman, Kuwait, Brunai, Iran into project financing.

To a question, he said that treasury stock Ordinance will be functional soon to allow all the listed companies to buy back their shares and sell them whem their prices are high.

However, exports were reduced by 14.18 per cent during the month of December by dipping from $1.52 billion in the last month to $1.31 billion, according to provisional figures released by Federal Bureau of Statistics (FBS) here on Saturday.

According to FBS figures, as compared to December 2007, exports from the country witnessed nominal decrease of 0.7 percent.  On the other hand, imports into the country during July‑December (2008‑09) witnessed increase of 12.87 percent as against the same period of last financial year.

Imports during the first six months of current financial year were recorded at $19.13 billion as against $16.95 billion registered during July‑December (2007‑08).

However, as compared to November 2008, imports during the month of December declined by 21.92 percent. Imports during December were recorded at $2.12 billion as against imports of $2.72 billion recorded during November.

As compared to the imports of 2.34 billion recorded during December 2007, imports during the same month of current financial year witnessed decrease of 9.45 percent.

Based on the FBS provisional figures, trade deficit during July‑December (2008‑09) was recorded at $ 9.55 billion, showing an increase of 15.27 percent over the budget deficit of $ 9.55 billion recorded during the first half of 2007‑08 financial year.

This was said by Mian Shaukat Masud, President, Islamabad Chamber of Commerce and Industry while talking to Mrs. Mishi Masika Mwatsahu, High Commissioner of Kenya who visited ICCI.

The ICCI President said our bilateral trade is limited to certain areas, however,the two countries are blessed with lot of natural resources and offer good opportunities to enhance their business relations by tapping different sectors of the economies of Kenya and Pakistan.

He called upon the businessmen of both countries to look for entering joint ventures in different sectors as well as hold trade fairs in each other country for further boosting bilateral trade.

He said presently volume of bilateral trade is tilted heavily in favour of Kenya which needs to be made balanced by enhancing Pakistan’s exports to Kenya. He said ICCI is building an Export Display Centre where foreign companies will also be given space to display their products and invited Kenyan businessmen & investors to take advantage of this opportunity.

Speaking to the business community Mrs. Mishi Masika Mwatsahu said Pakistan and Kenya has historic relations as Pakistan has always supported Kenya in getting independence.

She said Pakistani businessmen should consider Kenya an attractive country to tap for investment as Kenya is a gateway for Pakistani investors to enter the big market of 38 African states, which are landlocked to Kenya that has international seaport of Mumbasay.

She said Kenya will fully support Pakistani investors in exploring potential areas of investment in Kenya. She said Kenya has established One Stop Window facility for foreign investors to facilitate them and for making business processes easier for them.

She said Kenya is endowed with natural resources, but it needs foreign investment to fully exploit and utilize these resources. Therefore, she invited Pakistani investors to take advantage of these business opportunities in Kenya.

She said NADRA has already won in open competition to make national identity cards and passports for Kenyan nationals and is performing well in Kenya.

The project, to be completed at a cost of Rs. 30 million, will provide support to women entrepreneurship ventures in the province by removing handicaps as regard to business infrastructure, business development and by providing conducive environment for women owned business, said Provincial Chief of SMEDA, Javed Iqbal Khattak.

Talking with APP, Javed Iqbal Khattak said the center, funded by Ministry of Industries and executed by SMEDA, will be set up at University Road in Peshawar by the end of January 2009.

The Women Business Development Center (WBDC), he added, would provide all business related facilities to businesswomen under one roof and serve as a suitable place for women entrepreneurs of NWFP to trade and exhibit their products.

Javed Khattak said women business development in NWFP is hindered due to several reasons including lack of mobility, poor or non‑existent education facilities for women, low level of infrastructure development and lack of proper working environment.

The WBDC will provide conducive business environment for women owned business in the form of Business Incubation Center, he informed.

Similarly, the center will also work on capacity building of Women Entrepreneurs, provision of all encompassing facility for office space, product showcasing, exhibition sale, training and for promotion of entrepreneurial culture amongst women in NWFP.

About Business Incubators, Javed Khattak said, the incubators will serve as working place on temporary basis for women entrepreneur performing business at their homes. After establishing of business at incubators, the businesswomen will shift to a suitable place, he added.

The center will have ten incubators available on subsidized rent for the female entrepreneurs for a minimum period of six months and maximum of two years.

A display center having ten stalls will also be available at the center on subsidized rents for a minimum period of one week and maximum of six weeks. The WBDC will provide a secure, hassle free and totally female oriented environment to businesswomen. Some shared facilities will also be provided at nominal price including business plan, marketing plan, seminars, workshops, training programmes, internet services, photocopy, fax, phone calls, training room and printouts.

Javed Khattak expressed the hope that WBDC will play a vital role in development of the economy of the province by promoting female entrepreneurship as according to latest survey an increasing trend of women entering in Cottage industry in NWFP is registered.