Govt. to declare Gwadar Port free-trade area: Shaukat

[MohammedA]

Govt. to declare Gwadar Port free-trade area: Shaukat
ISLAMABAD, Jun 16 (APP): Federal Finance Minister Shaukat Aziz said Sunday that the government will declare the Gwadar Port as Free-Trade area on the pattern of Jabl-e-Ali free-trade area of Dubai. Addressing the post-budget 2002-03 press conference here, the Finance Minister said that negotiations are underway with the United Arab Emirates (UAE) government to provide assistance to Pakistan Government to make Gwadar as “Free Port.” “We are studying Jabl-e-Ali in Dubai and the similar free trade areas,” he said adding that a decision in this regard would be taken soon. During the President’s visit to UAE, he said he exchanged views with experts in Jabl-e-Ali free trade area and they would soon come to Pakistan. “It (Gwadar) would not just be an export processing zone, but it would much more,” he said. He said that the work on port development is going and within 30 months three berths would be constructed at the port. Presently the Chinese company is doing dredging work at the port. Parallel to the port, the work on free trade area would also be initiated, he added. Shaukat Aziz said that work on Karachi-Gwadar Coastal Highway is in progress and a major portion has been completed.

[MohammedA]

PakObserver.com

Pak to get rid of IMF shortly: Shaukat
NFC Award after consensus Unemployment to go gradually No tax on pension Duty drawback thru banks Agri sector to remain in focus

ISLAMABAD—Minister for Finance Shaukat Aziz Sunday said that Pakistan plans to get rid of IMF after completion of medium term Poverty Reduction and Growth Facility (PRGF).

Addressing the post-budget press conference here on Sunday, the Finance Minister said that Pakistan would not need to have any Fund program after the completion of PRGF.

Shaukat Aziz said that total span of current PRGF is two-and-half-years while Pakistan has already completed one year of the programme.

He told the mediamen that after the completion of current PRGF, Pakistan would not seek for another programme from the IMF, however, it would continue to secure loans from World Bank, ADB and other donor agencies only for the development programmes.

He said this year World Bank has provided a loan of $ 500 million while last year the bank lended $ 300 million under IDA. He said that entire loan was secured under IDA with 0.75 per cent service charges at zero interest.

To a query, Shaukat said that the government was giving priority to poverty reduction and would spend Rs 161 billion in this regard.

He said, Rs 136 billion was spent on poverty reduction and social sector in the previous fiscal year while another sum of Rs. 161 billion has been earmarked in the next budget for this purpose.

Out of the total Rs 161 billion, he said, the government has allocated 93 billion for health and education.

Talking about the safety nets, the Minister said, under this, the government has initiated four main programmes ie Food Support Programme, Micro-finance, Zakat Programme and Khushal Pakistan Programme (KPP) to alleviate poverty and create employment for the people.

He said Micro Finance Bank and Khushali Bank are providing facilities to those who had never been never facilitated.

Shaukat said some new projects and programmes are also being proposed for the next fiscal year with the sole aim to reduce poverty in the country.

Terming the new Income Tax Ordinance as historic departure, Shaukat Aziz said that revolutionary changes have been effected to revamp the whole tax regime for broadening the tax base and improving revenue collection.

Drastic changes in the tax regime will ensure minimum contact between the tax payers and tax collecting authorities, 20% computerised audit of the income tax returns under Self Assessment Scheme, he said adding, 80% of the income tax returns under SAS would be accepted.

Shaukat Aziz categorically stated that no tax was imposed on pension against the speculation in this regard prior to the announcement of the budget for new fiscal year.

The Income Tax appeal process in the income tax regime, he stated was also being simplified to facilitate the tax payers.

Referring to customs duty, the Minister said the SROs regime was being done away with, leaving only 30 Statutory Regulatory Orders which would continue to exist for certain unavoidable reasons.

This measure, he expressed the hope would facilitate the importers adding five slabs of duty have been slashed to four slabs.

Certain critical items including fertiliser, pulses, crude oil, IT equipment and phosphate will continue to be zero-rated duty items, the minister said.

To a question about the claim of the budget as investor-friendly, the Minister told the press conference that certain irritants and anomalies have been completely abolished to facilitate the investors.

In this regard, he cited the duty on stainless steel has been trimmed from 10% to 5%, likewise on certain imported items duty was imposed or enhanced to protect the local industry.

Responding to a question about levy of GST on ghee, the Minister explained, as a matter of fact, GST already existed on import stage and raw material, while it was now levied on manufacturing stage, which would have slight impact on the ghee price.

Reasonable concessions have also been granted on bonus share and ‘modarabas’ to develop the capital market in an effective fashion.

Finance Minister told a questioner that the fiscal deficit target at 4% of GDP, set in the budget for next fiscal year was not ambitious and unrealistic.

As a matter of fact, the fiscal deficit was 4.9% for current fiscal year, however owing to one time payments including Rs 30 billions of KESC losses, Rs 22 billion tax refunds of the banks, Rs 17 billion extraordinary defence expenses and allocation of Rs 10 billion for poverty raised the fiscal deficit to 7% of GDP in the outgoing fiscal year.

Since these were one time items, that is why, he added it would not be difficult for the government to bring the fiscal deficit down from 4.9% in 2001-2002 to 4% during 2002-2003.

Asked about the allocation of priority area of agriculture in the budget, the Minister said water input is very critical to this sector development, therefore, Rs 12 billion have been earmarked for water projects in this budget.

About the impact of new taxation measures in the budget, under the direct taxes, collection would be slashed by Rs 4.1 billion owing to downward adjustment of taxes.

In case of excise duty, there would be shortfall of Rs two billion, however in customs and GST, Rs 1.6 billion and Rs four billion additional revenue would be generated respectively, thus posting net shortfall of Rs 468 million in the backdrop of these adjustments.

About the utilisation of privatisation proceeds, the Minister said that 90% are utilised for debt retirement and 10% for poverty reduction.

The Minister said that the duty drawback would be through banks which will check red tapism.

Finance Minister Shaukat Aziz said the government would announce the National Finance Commission (NFC) Award after mutual consensus of all the federating units.

He said that the government had initiated a process for NFC Award last year, but due to September 11 incident, the work slowed down.

The last NFC meeting was held in Quetta when four groups were formed to suggest their recommendations on different four matters, he said adding that out of that three committees have submitted their reports and the government is awaiting the fourth committee’s report.

To another question, the Finance Minister said that since the new NFC award is not coming, the existing award, which is based on distribution of resources on population basis, would continue to be operational.

If there is a consensus, the provinces can change the method of distribution of resources, he added.

The Finance Minister said, the Government is focusing on creating self-employment opportunities and thus reducing poverty in the country.

“The schemes like Small and Medium Enterprise Bank and Khushaal Pakistan Bank will provide the people the much-needed capital and enable them to become self- employed.”

Aziz said, the Information Technology holds immense potential for economic development and said in Punjab alone, thousands of IT-trained people will be employed as school teachers.

“The policies pursued by the government are aimed at not only expanding the pool of IT talent in the country but also ensure the absorption of skilled people.”

Defending recruitment of five taxation experts from private sector as members in the Central Board of Revenue, Shaukat said, the government plans to revamp CBR to make it more peoples’ friendly.

The basic aim behind their recruitment was to appoint such a team in the CBR that could help understand the problems of the tax payers, he clarified. All the appointments have been made purely on merit and the initial reports of their performance proved a success, he maintained.

“They are doing well and the results will certainly have positive impacts on the national economy”, he told when asked.

To another query, the Finance Minister said, under the new Income Tax ordinance, it has been ensured to have minimum contact between the tax payers and the taxation officials. The concept of Income Tax Officer to end under the new settlement, he said, adding that 20 per cent audit of the Income Tax returns would be carried out each year through computer.

He told that relief has been given to the tax payers in the budget 2002-03 and the minimum limit of the taxable amount has been enhanced to Rs 80,000 from that of Rs 40,000 for the salaried class. The idea behind it is to lessen the burden on taxpayers.

Aziz said significant support has been provided to Wapda and KESC to provide relief to agriculture and domestic consumers and to limit their tariff increase to bearable levels.

He said in the case of Wapda, for the third consecutive year, its debt servicing payable to government has been absorbed in its budget.

This year, a cost of Rs 20 billion was picked up in the budget on this account.

The Minister said without these enormous doses of support, the electricity tariffs would have called for much larger increases.

The Finance Minister said the main reason of the deficit in the next budget is due to financial assistance being provided to Wapda and KESC and other departments.

He clarified that after clearing the losses of Wapda and KESC and converting their loans into their budget, it is hoped that in the next fiscal year, these two departments will work more efficiently and there will be no extra ordinary increase in the power tariff.

Pakistan’s forex reserves have now climbed to US $ 6.12 billion, he said.

“The economic policies of President Musharraf’s government had already seen the forex reserves cross the US $ 3 billion mark and now we have achieved the unprecedented figure of US $ 6.12 billion.”

He particularly referred to increase in remittances from Pakistani expatriates and a halt in the trend of shifting money to foreign banks.

The Finance Minister saw the addition of another Us $ 2.2 billion to Pakistan’s forex reserves during the new financial year if the exports continued their upward trend and the economic policies proceeded unhindered.

Federal Finance Minister said that the government has allocated extra funds for introducing effective reforms in police and judiciary to make it more service oriented.

He told this year numerous incentives have been given to the police force to strengthen it on sound footings. Moreover, he said, extra funding have been set aside for reforms in the judiciary.

The reforms in police and judiciary, he said, are aimed at increasing the quality of service to people, provide easy and cheap access to justice and ensure law and order in the country.

He said the government has introduced Fiscal Responsibility Law to regulate the loans to avoid misuse of the funds and ensure their proper utilisation.

The minister said draft of the Fiscal Responsibility Law has been finalised and being published to solicit public opinion before its promulgation with in next few months.

About agriculture, he said it continues to occupy central attention of the government and it has allocated Rs 796.974 million for this vital sector during the fiscal year 2002-03.

He said the allocation in this important sector has been increased from Rs 640 million (2001-2002) to Rs 796.974 million.

Aziz said water shortages, price uncertainty and poor marketing methods, continued focus on low value added agriculture and limited access to credit remained the main challenges of reforming the agriculture sector.

Talking about the measures adopted during the year, he said, a medium term plan for radically augmenting water resources in the country was initiated during the year at a cost of Rs.116.2 billion to be spent on a number of projects over several years.

These projects, he said, will enhance the existing storage capacity of the country by 5.6 MAF of water, and will bring millions of acres of land under cultivation and thousands of jobs will be created during construction of these schemes.

Shaukat Aziz said to improve the supply of water at the farm level in the face of unusual shortages, the government will encourage installation of new tubewells.

He said to enable greater use of tubewells for meeting water shortages, the government has offered a subsidy for the use of electricity for tubewells.

In addition, lining of water courses have been included as eligible schemes under Khushaal Pakistan program, he added.

He said agriculture credit remained a major focus of the State Bank of Pakistan. During July-April, total disbursement of credit to the agriculture sector was Rs 32.2 billion as against Rs 29.1 billion last year, representing an increase of nearly 11%.

The Minister further said last year State Bank had committed to meet all the needs of agriculture during the year. This policy of the State Bank will remain intact.

He said to mitigate farmers’ sufferings, the government had waived all loans of up to Rs.25,000 in Sindh, Punjab and NWFP in the drought affected areas.

This limit was increased to up to Rs 50,000 in the case of Balochistan.

For loans of up to Rs 100,000, the mark-up charges have been waived. This package will go a long way to rehabilitate the farmers badly affected by the drought, he added.

He said to revitalise its operations and to expand its role in the agriculture sector, the Agriculture Development Bank is undergoing a fundamental restructuring program with the assistance of Asian Development Bank.

The Finance Minister said the budget 2002-03 would help kick up greater economic activity in the private sector and generate more employment opportunities countrywide.

“I am confident that the upward trend in country’s exports and the Government’s initiatives at encouraging the capital market, will generate much greater employment opportunities in the private sector,” he said.

The Minister said, vacancies in the government departments are also being filled as per rules and through a transparent manner but there would be no extra-recruitment.

“It is the private sector which will bring jobs to the people and sustain economic development of the country.”

Aziz also referred to the Government’s initiation of mega projects like Gawadar Port in Balochistan and said they will be vitally helpful in stemming the unemployment rate.

“We want to move Pakistan forward on the path of economic development and liberate our economy from heavy reliance on loans.” However, he said, the unemployment rate will come down gradually.—APP

[Hashmat]

More fantastic news on the development front. On Dec 18, history will be made in Pakistan, with the opening of the grand Gwadur port.

http://www.khaleejtimes.com/DisplayA...=business&col=

China assures Pakistan of Gwadar Port completion

China has assured Pakistan that Gwadar Port in Balochistan will be ready for operation by December 18. The Chinese Assistant Minister of Commerce Chen Jian met Minister for Ports and Shipping, Babar Khan Ghauri here yesterday and discussed with him the progress of development work at Gwadar Port. Jian said that $1.2 billion Gwadar will be ready by December 18, 2004 with the active financial and technical support of China. According to official announcement, the Chinese minister expressed his reservation regarding the project especially to inculcate the importance of this port to the locals and thanked him for beefing up the security of Chinese workers at Gwadar. He hoped that on completion of the port, new avenues of business for locals would be opened. It would also serve as trade route for the States of Central Asian Republics to the extent of serving significant strategic purposes.

He assured that he would do his best to undertake the work of Phase-II by Chinese. The shortcomings of the port would soon be removed in order to make the motherships to embark easily. Jian said government of China had undertaken the phase I of the project at Gwadar Port to strengthen the ties between the two countries. This was why, the Chinese experts have been working day and night to complete the project as per schedule, he added. Chairman Gwadar Port Development Authority, Akbar Ali Pasnani told the Chinese minister that networks of roads connecting port through out Pakistan would surely being tremendous growth for cargo as well. He stressed on the completion of Part-II of phase I as soon as possible.

[MohammedA]

http://www.dailytimes.com.pk/default...12-2004_pg5_11

Feature: Gwadar: A gold mine for real estate developers and dealers

By Imran Ayub

GWADAR: “Sand turns into gold,” reads a signboard of a recently- opened real estate agency at Jawed Complex, which houses 10 offices dealing in the property business at Gwadar.

This city, of 120,000 people, has become the focus of attraction for real estate dealers and developers following the launch of the Gwadar Port project in 2001. It is currently hosting over 100 estate agents from across-the-country, and the number is rising with each passing day.

“There are a few who have purchased lands and are now offering to others,” says local dealer Aba Bagr of Bali Estate. “Most of them are kinds of brokers who bridge deals between investors and landlords of the city. But overall there is a property business boom.”

Once a neglected city of the Balochistan province, Gwadar is now the most travelled destination of the country’s property business players, who foresee that the town, which is currently surrounded by hills and sea, will soon be dotted with high-rise buildings and become a centre for foreign travellers and investors.

But a few agents, who have studied the city before setting up offices here, say the country’s and international investors have yet to realise the potential the city offers. “You can’t even imagine,” says Amir Samsam of S&S Consultant who came to Gwadar from Karachi over three years ago when even the foundation stone for the proposed port had not been laid.

“There is a need to present the true picture of such potential. Both locals and foreigners are coming here to explore opportunities but not at the pace which the city deserves.”

Mushroom growth: He says during the last one and a half year there has been a mushroom growth of estate agents city and admits that some may be churning out fraudulent deals.

“But people here who have invested hundreds of thousands of rupees only in setting up offices would not cheat and you would soon see more activity in the property trade in days to come.”

The city, which borders with Iran and touches the broad beaches of the Arabian Sea, was once a lower-than-average town but now agents say the land here has seen almost 500 percent appreciation in prices during the last one and a half years.

A plot of 500 square yards in the city, which was available at Rs 100,000 to Rs 200,000 about two years ago, is now offered at Rs 1.2 million to Rs 1.5 million and the plot of 1,000 square yards would now cost Rs 1.8 million to Rs 2.5 million.

Landlords hope to earn millions: The development has proven a bonanza for local landlords, who waited for decades for these days, and now hope to earn millions in the matter of just months.

Lal Baksh is one of them. One of the biggest landowners, he has sold out a few acres of land in one year but says regulatory hurdles have made the business a difficult job for landlords and estate agents.

“We can’t understand these obstacles,” he says. “There is a ban on the transfer of land from one to another for many years and it has kept prices down. We wonder what the government wants - to keep the prices low and deprive the poor people from the benefits?” He says the government did not have a single acre of land in the city a year ago. He suspects the government exploited lower prices due to regulatory hurdles and have purchased many acres during the last few months.

In his early 60s, Mr Baksh is said to be owner of land worth over Rs 50 billion but has been generous enough to offer free places to the government and other institutions for hospitals, schools and colleges for his poverty-hit people.

The ban on transfer has not only affected big landlords like Lal Baksh but also allows some people to use it as a tool for fake deals. The local authorities appear well aware of the situation but appear helpless, as the matter does not lie in their jurisdiction.

‘A matter of concern’: “It is really a matter of concern,” says Babu Gulab, District Nazim Gwadar. “We don’t exactly know who deals in this. Sometime it is said that it’s a GDA issue (Gwadar Development Authority) while sometimes it comes to the provincial government.”

He hopes if the ban on the transfer is lifted, the financially troubled local government can earn Rs 10 million per month on account of several taxes. Mr Gulab, however, is confident that as the city is becoming a centre for investors and travellers, the days of a ban on the transfer of real estate property are numbered.

Apart from real estate and open plot deals, dozens of builders across the country have announced housing and commercial projects in the city. From three-bed flats to 1,000 square yards bungalow, the city sometimes resembles the posh areas of Karachi replete with signboards of different projects.

“The builders’ projects here include both residential and commercial,” said Faqir Wali, co-ordinator of recently launched Globiz Avenue, a 20-acre residential and commercial project. “There are some 10 to 12 such projects that have been launched. The number would increase in the days to come but it needs transparent and swift regulatory procedure, which is still unseen in Gwadar.”

Mr Wali, who is also secretary of the newly-formed Gwadar Real Estate Agents and Builders Association, says the announced projects have succeeded in attracting over 50 buyers but says all these would take at least five years to be completed. But despite all the procedural and regulatory hurdles, property prices in the city see a new rise almost everyday and do not detract buyers.

“This shows the potential which the city offers,” says Amir Samsam of S & S Consultant, another property dealer. “But it does not mean that the situation should remain the same. The government must remove all such snags to attract investors both from the country and abroad.”

To validate his observation, Mr Sasam cites the increase in the prices of real estate in the famous Sanghar Housing Scheme.

The scheme, which includes plots of owned by big-time politicians, former premiers, bureaucrats and high-ranking officials of the armed forces is in business again after the Balochistan High Court issued stay orders against the cancellation of plots in the scheme. Stretching over 25 kilometres, the Sanghar Housing Scheme has the most expensive land in the city.

“You would get a 500-yard plot at an average location in Sanghar at Rs 2 million to Rs 2.5 million,” said Aba Bagr of Bali Estate. “The prices increased from Rs 1 million to Rs 1.2 million and this is still peanuts. You can’t even imagine where the prices would go after the removal of the ban on transfer of ownership.”

The city, which is predicted to become a landmark city, after the completion of the deep-sea port, is waiting for due attention from the authorities to make it more attractive as estate dealers and local landlords fear a delay by the government may deter investors. “Its time to act now,” says Lal Baksh. “The investor has no land. He invests on the hopes of profit. If Gwadar would not offer profit to any investor due to procedural delay, why should he wait? He will definitely leave for Dubai or anywhere else.”

[osman]

This is indeed encouraging. What pakistan needs now are more centers of commerce and industry. we have too few such focal points which is not too good as in case of a war the enemy has to just take out a couple of targets to stop the country from functioning. Now if the gov plays its cards right we will see a great city in the next 5 to 10 years.