PRO 12-09-2012_Layout 1 9/11/2012 11:29 PM Page 1 Wednesday, 12 September, 2012 ‘Let’s rebuild South Asia’ Not trade alone, but reforms in investment regime, cooperative mechanism to manage natural resources vital for regional integration ISLAMABAD T STAFF REPORT HE 5th South Asia Economic Summit kicked off Tuesday saying trade alone is not enough for deeper regional integration, it has to be complimented with reforms related to investment, a cooperative mechanism to manage and utilize natural resources such as water and cooperation between regulatory bodies and promotion of supply chains. “While governments are currently more focused on trade agenda, it remains the responsibility of civil $2.46 billion! Overseas Pakistanis remit over $2.46b during first two months of FY13 KARACHI STAFF REPORT The Pakistanis working overseas sent back home over $2.463 billion during the first two months, July–August, of the current fiscal year 2012‐13, said the central bank on Tuesday. This shows a growth of 2.36 percent or $56.91 million compared to $2.406 billion the country had received during the same period of FY12. The inflow of remittances during the months in review from Saudi Arabia, UAE, USA, UK, GCC countries, including Bahrain, Kuwait, Qatar and Oman, and EU countries amounted to $657.78 million, $505.80 million, $446.61 million, $334.06 million, $274.09 million and $63.57 million, respectively, as compared with the inflow of $601.62 million, $552.11 million, $458.45 million, $282.45 million, $250.76 million and $74.97 million in same months last year. The remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries amounted to $ 181.78 million as against $186.42 million received last year. The monthly average remittances for July‐August 2012 period comes out to $1,231.85 million as compared to $1,203.39 million during the last year’s corresponding period. Some $1,258.98 million were remitted by overseas Pakistanis in August as against $ 1,310.47 million in the same month of FY12. In August 2012, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries and EU countries was counted at $308.12 million, $265.26 million, $231.31 million, $185.57 million, $133.73 million and $32.74 million, respectively, as compared with the inflow of $309.79 million, $ 294.46 million, $263.58 million, $163.90 million, $134.31 million and $42.38 million respectively in August, 2011. The remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the second month of current fiscal year (August FY13) amounted to $102.25 million as against $102.05 million received in the second month of last fiscal year (August FY12). “The continued growth in workers’ remittances is the result of the efforts made by Pakistan Remittance Initiative (PRI) in collaboration with other stakeholders to facilitate both overseas Pakistanis and their families back home,” said the State Bank. society to keep reminding the governments of such issues as well which in no manner are less important than trade,” cautioned the speakers. The 3-day summit is going to discuss issues relating to South Asia economic outlook, impacts of global financial crisis, regional trade, energy cooperation, transport connectivity, trade normalization and engaging youth and Diaspora for economic growth. Over 114 foreign delegates, including ministers are participating in the summit. Recommendations of the summit would be submitted to SAARC Secretariat ahead of the upcoming annual SAARC Summit to be held in Nepal this year. Speaking at the inaugural session of the Summit, Federal Minister of Defence, Syed Naveed Qamar called upon the South Asian governments to look at the disconnection between macro and micro economic performance so that they can realistically address growing poverty and improve social sector. He asked the scholars attending the summit to offer advice to the governments on trade in services and agricultural goods, intra regional movement of people and trade in areas such as energy. “Unless we fight poverty, illiteracy and poor health standards in South Asia and complement this struggle with enabling environment for businesses to generate employment – it will remain a challenge to compete with other regions of the world,” the minister concluded. He said on the trade front, we have taken concrete steps in reducing barriers to trade in South Asia and duties on intra-regional trade are being slashed to unprecedented levels. Stressing the need to understand South Asia’s perspective on post-2015 development forecast, the minister said: “We live in a region with regular natural disasters in the form of droughts, floods and earthquakes and it’s now time to realize that we have not paid much attention to address the impacts of climate change in this region.” In his welcome speech, SDPI Executive Director, Dr Abid Qaiyum Suleri praised the incumbent political leaderships of India and Pakistan for recent landmark initiatives such as new visa regime, MFN status to India by Pakistan and Indian decision allowing investment by Pakistani investors. He said, “We can now see new clouds of hope amidst years of mistrust.” He hoped that new agreements and advancement on issues relating to development would herald an optimistic future in South Asia. However, it cannot happen without an inclusive and pro-poor growth that benefits to all citizens addressing economic disparity within and between countries. Rajiva Wijesinha, Member of Parliament, Sri Lanka said, many developed countries are pushing for freeing capital movements but are denying freer movement of labor across the world. ‘Mega projects to revive economy’ LAHORE APP Deputy Prime Minister and PML-Q senior leader Chaudhry Pervaiz Elahi said on Tuesday that many mega projects were underway for the economic revival of the country, including establishment of Export Processing Zones all over the country and implementation of a new industrial policy that is being formulated in consultation with the business community. Talking to LCCI President Irfan Qaiser Sheikh and Vice President Saeeda Nazar during a meeting at his residence here, he said, “When we got the charge of the EPZA, its land was under occupation of land grabbers, now 100 acres of land has been retrieved on which the Export Processing Zone would be established.” He said EPZA offices would be set up all over the country including Karachi so that more industrial estates could be established and new job opportunities created. The Deputy Prime Minister said the government was aware of problems of trade and industry due to power crisis and added that a remarkable cut in loadshedding would be witnessed in the coming months. He said the proposed industrial policy would pave the way for acceleration of industrial activity in the country, ultimately boosting exports, alleviating poverty and unemployment. He said that the Lahore Chamber of Commerce would be taken on board well before the finalization of the upcoming industrial policy. He said the government was focusing on implementation of long term policies so that true results could be produced for the benefit of the common man. The promotion of Indo-Pak trade would go a long way in bringing peace and prosperity in South Asia, he said, asserting that to help cope with imports from India, the government was endeavoring to strengthen the local industrial sector. Pervaiz Elahi said that all possible measures were being taken to ensure continuity in economic policies that was a prerequisite to turn the country a hub of economic activities and to achieve the goal all stakeholders including chambers of commerce in the country would be consulted. Earlier, the LCCI president apprised the Deputy Prime Minister of the challenges being faced by the business community, saying that electricity shortage had forced the businessmen to shift their operations to other places. On trade with India, the LCCI president said that it is a welcome sign but the government would have to facilitate the business community to enable it to cope with a bigger economy. He said the LCCI had conveyed its concern over non-tariff barriers by India which needed to be addressed as they were hitting hard Pakistani businessmen. JS Bank to benefit from HSBC acquisition KARACHI STAFF REPORT The HSBC Bank is said to have agreed to sell its Pakistani operations to JS Bank Limited. However, the transaction is subject to regulatory approval and the approval of the stakeholders of both the parties, namely the HBME and JSBL. According to market observers, the acquisition would give the JS Bank much more than the customer base. The analysts at InvestCap Research opine that contrary to popular opinion, JSBL’s interest in HSBC’s Pakistani operation has to do with much more than its premium customer base. They said the prime factors that made the former to acquire the latter include HSBC’s strong footprint in the consumer banking segment, something which JSBL lacks, enhancing the tier 1 capital of the bank, as JSBL had fallen short on State Bank’s prescribed Minimum Capital Requirement (MCR) during CY11 and face the music this time around, as the MCR has been raised to Rs9bn (For CY12). Thirdly, they said the superior information technology infrastructure and better risk management parameters of HSBC, which are highlighted by the infection ratio of mere 3% during 1HCY12 against JSBL’s12% during the same period. Neighborly talks Pak, India commerce secretaries’ talks in last week of September ISLAMABAD ONLINE Commerce Secretaries talks between Pakistan and India have scheduled to be held last week of September, official sources informed on Monday. Earlier these talks were scheduled to be held from September 11-13 but it was not possible to hold talks as both the countries have to prepare themselves in according with the outcome achieved in Foreign Minister level talks, explained the official. The foreign ministers level talks concluded last Saturday have been termed as reason for delay in trade talks. Pakistan had earlier agreed to abolish the negative list of products by mid December so as to complete the trade liberalization from January 1, 2013. Indian side had agreed to accord approval to the three agreements for standardization of the standards and other technical specifications as proposed by Pakistan for providing level playing field to Pakistani exporters. Economy digs itself out of ‘War on Terror’ quagmire ISLAMABAD APP Despite challenges of war on terrorism, energy crisis and global economic meltdown, the economy of the country sustained growth during the past four years as it is suggested by the major economic indicators including, foreign exchange reserves, workers remittances, inflation and industrial growth. Four years back, when Asif Ali Zardari took the office of the President of Pakistan, the political and economic conditions of the country were at transitional phase from a dictatorial regime to a democratically elected president and parliament. Pakistan’s economy was in a shabby condition, foreign exchange reserves were fast depleting and the balance of payment position was in a difficult situation. Under the wise leadership of President Asif Ali Zardari, PPP took tough decisions including austerity measures, steps for enhancing revenues enhance spending on social welfare and social safety nets to benefit the poor and vul- nerable segment of the society. President Asif Ali Zadari gave a new direction to present government by raising slogan of “Trade not aid” and urged the government to focus on boosting its exports and exploit local resources in this regard. Pakistan had been confronted with security challenges since 2001 after the 9/11 episode and so far Pakistan has spent over $ 80 billion on war against terrorism. President Asif Ali Zardari in his recent address to NAM summit held in Iran said “Terrorism is a global threat. No country has suffered so much from it as Pakistan. We have lost more than 40,000 innocent lives. Our economic losses are almost 80 billion dollars”. However, despite all these challenges the economy sustained growth during the past four years. Although the campaign against terrorism coupled with financial meltdown and spike in commodity and oil prices had led to inflation, the country still managed economy and controlled commodity prices. Now the Consumer Prices Index (CPI) went down to single digit during the month of August. Official sources said that the surge in food and commodity prices witnessed during 2008-09 pushed the CPI to a record level of 25.3 percent in August 2008, however during the month of August 2012, the CPI recorded just a single digit increase. On the other hand, the Industrial sector of the country also sustained positive growth during the period despite several challenges of electricity and gas shortage coupled with law and order situation and natural calamities. The Large Scale Manufacturing (LSM) output increased by 1.17 percent during the fiscal year 2011-12 as against the same period of last year. Meanwhile, the remittances from the overseas Pakistanis are also increasing with each passing year and during the year 2011-12 it crossed the $13 billion mark. Pakistan has been witnessing a growing surge in remittances since the present democratic government took over in 2008, the sources said adding that from mere $6.4 billion remittances in 2008, the fiscal year 2011-12 saw record remittances of over $13 billion. During the month of August 2012, overseas Pakistanis remitted an amount of $ 1.204 billion in July 2012 showing an impressive growth of 9.89 percent or $108.40 million when compared with $1.096 billion received during the same month of the last fiscal year (FY-12). Analysts are of the view that rising foreign remittances have not only brought stability to value of Pakistani rupee, but also played key role in narrowing down gap between foreign payments and receipts. The rising remittances, second major source of foreign exchange earnings after exports, practically helped the country with record foreign exchange reserves despite high oil prices and costly imports. The exports from the country also crossed the psychological barrier of $25 billion during the previous fiscal year (2010-11) and remained almost near to this target during the fiscal year 2011-12, showing stability in overall macro economy.