Indonesia,Pakistan to boostbilateral trade to$2bn under PTAKARACHI: Pakistan and Indonesia are

striving to increase the volume of

annual bilateral trade up to $2 billion

under the Preferential Trade

Agreement (PTA) the two countries

had signed in February last year.

Indonesian Counsel General Rossalis R

Adenan Saturday said this to a group

of young businessmen that called on

him on Saturday. Led by Anas Adhia

and Haroon Iqbal Shaikh, the business

delegation discussed with the Consul

General trade opportunities between

the two countries after the much-

awaited implementation of PTA. Consul

General Roassalis briefed the

visiting traders on the

expected benefits the

PTA will serve for

the two countries.

“Prior to the

implementation

of PTA,

Indonesia-

Pakistan trade

volume has

already grown

to $1.6 billion

and the target is

set to make it $2

billion per annum,” he

said. The consul general

also shared with the

delegation the efforts done in this

regard including a recent visit of

Indonesian Ambassador to Pakistan to

Karachi Chamber of Commerce and

Industries. “We are putting up all

efforts to ensure implementation of

PTA to achieve this target and extend

our fullest support to Pakistani

business community,” he said. Anas

Adhia said: “Indonesia is a big market

with lots of potential for Pakistani

businessmen and implementation of

PTA would certainly help boost bilateral

ties”. Haroon Iqbal thanked the Consul

General on behalf of the group for his

efforts and assured him all support

required for quick and successful

implementation of the said Preferential

Trade Agreement (PTA). STAFF REPORT

PIA to get first A-320aircraft in June ISLAMABAD: The first Air Bus A-320

will join the fleet of the national airline

in June, while PIA will get four A-320

aircrafts by the end of this year. PIA

sources said that four medium

capacities Air Bus A-320 are being

added in the fleet for making up the

shortage of aircrafts—the first one will

arrive in June, the other two in August,

while the forth one in November. All

these aircrafts are being taken on dry

lease. Sources further said that the

process of giving training to the pilots

on new planes is in progress.

ONLINE

01

KARACHI

ISMAIL DILAWAR

WHO else could be expectedto be law abiding when thegovernment, which is con-stitutionally meant to exe-cute the laws formulated by

the country’s legislatures, tends not to re-spect the laws of the land.

The cash-strappedfederal government forthe last couple ofyears has con-stantly been,what the cen-tral banktermed ina re-cent

report, breaching the State Bank of Pak-istan (Amendment) Act 2010 on account ofits quarterly borrowing limit from the StateBank. According to SBP Act, the federalgovernment’s debt to the central bank ason April 30, 2011 had to be retired in thenext eight years till 2019.

Contrary to legal provisions, the gov-ernment’s budgetary borrowings from theState Bank has increased instead of beingbrought in conformity with the legal re-quirement. The central bank, in its second

quarterly report on State of Pak-istan’s Economy said,

since April 2011 thefederal govern-

ment’s out-

standing debt to the SBP had actuallygrown from Rs 1.445 trillion toRs 1.575 trillion up to end-December 2013.

This shows agrowth of Rs 130 bil-lion in the budgetarysupport the funds-starved governmentsecured from thecentral bank. Havinglargely depended onthe scheduled banksduring the first quarter,July-September FY13,the second quarter, Octo-ber-DecemberFY13, saw thegovernment shifting its focus awayfrom the commercial banks to the StateBank. “As a result, the government hasbreached the zero quarterly borrowing

limit from SBP during the second quar-ter,” noted the central bank in its re-

port for 2QFY13.This year, the official datashow that from July 1 toApril 5 the governmentborrowed over Rs 942.74billion from the banking

system. This is com-pared to Rs 928.55billion of the corre-

sponding period inFY12.

Of the total,the borrowingsfrom scheduledb a n k samounted toRs 879.004b i l l i o n

against Rs631.655 bil-

lion of last year. The State Bank was alsoapproached for a Rs 63.737 billion

loan during the period underreview.

These huge budget-ary borrowings led tothe expansion of mon-etary growth in theinflation-hit countryto 8.66 percent or Rs662 in monetaryterms. The same

months last year hadseen monetary expan-

sion, also denominated asbroad money or M2, stand-

ing at 7.98 percent or Rs534.20 billion. The central bankers

believe that the country’s fiscal picture wasexplanatory of the federal government’s“compulsion” to borrow. The current mar-ginal foreign inflows on account of invest-ment, aid and other reimbursements, theanalysts said, were making Islamabadmore and more reliant on foreign and do-mestic credits to cater its ever-increasingbudgetary needs. The State Bank said itwas the receipt of $ 1.8 billion CoalitionSupport Fund (CSF) that had made “all thedifference” during the first half of FY13 tokeep the ever-widening fiscal deficit re-stricted at 2.6 percent of GDP.

A high-level delegation from Pakistanis currently negotiating a fresh bailoutpackage of $ 5-7.5 billion from the IMF inWashington where the internationallenders from the IMF and World Bank hadgathered to attend the spring meetings ofthe two Bretton Wood institutions. Also,the Pakistani team would be engagingAmericans for the reconciliation of $ 1.5to $ 2.5 billion the former claims on ac-count of war reimbursements.

buSInESS

BSunday, 21 April, 2013

Violation of fiscal disciPline under sBP act(

(

SBP MOVE TO DISCOURAGE‘SPECULATIVE TENDENCIES’IN VOLATILE OPEN MARKET

Cash-strapped govt’s debt standsat Rs 1.5tn since April 2011

KARACHI

STAFF REPORT

Dr Tilo Klinner, Consul General of Ger-many in Karachi, on Saturday said the en-ergy sector could be the main focus for theGerman and Pakistani companies in termsof collaboration to rid the latter of the lin-gering energy crisis.

In this regard, Siemens Pakistan Engi-neering Co. Ltd may play a vital role foroffering energy solutions in Pakistan, es-pecially in the SITE of Karachi, wherebulk consumers were present, the ConsulGeneral said during a visit to S.I.T.E. As-sociation of Industry.

Dr Klinner was welcomed by NaseemAnwar, Senior Vice Chairman and Chair-man, Int’l Relations, Diplomatic AffairsSub-Committee, S.I.T.E. Association of In-dustry, along with the members of Execu-tive Committee of the Association.

Pakistan had tremendous potential interms of bilateral trade with Germany, hesaid. He said energy sector could be themain focus wherein efforts were requiredfor joint collaboration with Pakistani andGerman companies and in this regardSiemens Pakistan Engineering Co. Ltdmay play a vital role for energy solutionin Pakistan, especially in SITE Karachi,where bulk consumers were present.

He also invitedPakistani compa-nies interested to

visit Germany, abusiness tour was

being arranged in Octo-ber 2013, whichwill be useful by

B2B contacts with

businessmen of both the countries as it willbe an opportunity to meet people willingto invest in energy sector. He also of-fered to approach PakistanGerman Business Forumwherein vocationaltraining courses arearranged. He was ofthe view that Ger-man investors lookforward to secu-rity and safety be-fore entering intojoint collaborationwith Pakistanicounterparts.

Thus it is veryimportant to have goodsecured environment toencourage foreign investors.

Naseem Anwar of S.I.T.E. As-sociation briefed the Consul General say-ing the industries of various sectors wereoperating in this biggest and oldest indus-trial estate of the country, having potentialto increase bilateral trade and investmentbetween Germany and Pakistan.

The Consul General was requested toplay his effective role in enhancing bilat-eral trade relations between the two coun-tries. No doubt that Germany is countedas the biggest exporter of the world butPakistan being one of the 5th largestwheat, rice, cotton, milk and sugar pro-ducing countries had a great potential topromote bilateral trade for the mutualbenifit of two economies.

It was also pointed out that lack ofcommunication and inter-links, sector wiseB2B exchange programs, sector specificcompanies information and energy sectors,

where our country is facing serious prob-lems, needs to work out as well as Joint

Ventures for Energy be initiated be-tween Germany and Pakistan.

It was also discussedthat about 200 German

companies were oper-ating in Dubai whomay join hands withPakistani compa-nies for joint col-laboration to boostup bilateral tradeand economic ac-

tivities and help Pakistan to increase trade.The concern related to security situ-

ation in the SITE area was also commu-nicated to the Consul General through alay-out plan initiated by S.I.T.E. Associ-ation of Industry on self-help basis andclose liaison with CPLC and Govern-ment of Sindh to which the Consul Gen-eral expressed satisfaction sayingmilitant activities occurred in Pakistanwas sending a wrong message to theworld discouraging FDI in Pakistan aspeace was a prerequisite for trade andinvestment in a country.

The centralbankers believe

that the country’sfiscal picture was

explanatory of the federal

government’s‘compulsion’ to

borrow

We are making efforts to ensure the

implementation of PTA to achieve the

$2 billion target and extend our

fullest support to Pakistani business

community

Germany urges Pak-German firms tocollaborate in energy sector

Siemens PakistanEngineering Co. Ltdmay play a vital rolefor offering energy

solutions in Pakistan,especially in the SITE

of Karachi, wherebulk consumers

are present

16-17 Business Pages (21-04-2013)_Layout 1 4/21/2013 5:56 AM Page 1

buSInESSSunday, 21 April, 2013

Beaconites celebrateacademic brilliance atHigh Achievers CeremonyISLAMABAD: Beaconhouse School System,

Northern Region hosted a grand High Achievers

Ceremony at the Convention Centre, Islamabad.

More than 800 students received their awards for

academic brilliance in their O and A Level

Cambridge International Examinations. The

ceremony was attended by more than 1500

parents, families, teachers and high achievers. Mr

Sartaj Aziz, Vice Chancellor Beaconhouse National

University, graced the occasion as Chief Guest.

The ceremony was graced by distinguished guests

of honour who included Mr. Saleem Ranjha, Joint

Secretary at Prime Minister’s Secretariat, Mr.

Mohammad Ramzan Achakzai, Secretary IBCC, Ms

Uzma Yusaf Senior Schools Development Manager

Cambridge International Examinations, Master

Mohammad Ayub, inspirational teacher, Mr Talat

Hussain eminent journalist among others.

Students of the class of 2010 and 2011 were

honoured at the ceremony; along with

participants of the Beaconhouse International

Internship Program, students who have achieved

success in various extra-curricular and co-

curricular activities. PRESS RELEASE

Minister briefed on PSMfinancial statusKARACHI: The federal minister for industries and

production was informed by the CEO of Pakistan

Steel Mills that the long term liabilities of the mills

amounted Rs 29.627 billion, deferred liabilities

were Rs 13.480 billion, other liabilities figured Rs

45.287 billion. He said when he had left the office

of Chairman Pakistan Steel in 2007-08, the net

profit was Rs 2.081 billion and Rs 8.252 billion were

contributed to the national exchequer as taxes and

duties. Rs 8.987 billion were cash/bank balance.

The production capacity was 82%. In 2008-09, the

production dropped to 65 % of total capacity. Rs

26.526 billion was net loss. In 2011-12, the net

loss was Rs 22.273 billion and the capacity utilized

was simply 19 percent. From July 12 to January 13,

the net loss occurred was Rs 13.108 billion and the

capacity utilization remained at 12 percent. PSM,

CEO informed that the working on the agreement

signed with Russian for the revamping and

expansion of Pakistan Steel was in progress. Russia

has offered dollars one billion package in this

regard. With one month, the formalities related to

the agreement would be finalized after the PSB

board meeting, he said. PRESS RELEASE

Regional Food Festivalopens at PC Rawalpindi

RAWALPINDI: Dr Hasrul Sani Bin Mujtabar, High

Commissioner of Malaysia to Pakistan, Dr Saleem,

Senior Executive Advisor Hashoo group MA Bawany

President Hashoo Group, Bashir Adlali Sr. Vice

President Operations Hashoo Group, Mr Sheharyar

Mirza, General Manager Pearl Continental Hotel,

Rawalpindi along with Mr Abdul Hayee Executive

Assistant Manager Pearl Continental Hotel,

Rawalpindi cut the ribbon to inaugurate the 2013

Regional Food Festival at the Pearl Continental

Hotel, Rawalpindi on Friday. The festival will

continue for three days till April 21. In his welcome

address, Mr Sheharyar Mirza General Manager of

the Hotel welcomed the distinguished guest and

said that the Regional Food Festival is being held

each year at the Pearl Continental Hotel Rawalpindi

and that the Festival is in series of various cultural

events organized by the Hotel aims to show case

rich culture of Pakistan to our youth. General

Manager Sheharyar Mirza said that Chefs of our

Hotel are participating at the Food Festival and

would delight the visitors with their rich culinary

dishes PRESS RELEASE

SCB and EFU launch HomeProtection Plan

KARACHI: Standard Chartered Bank’s

partnership with EFU General Insurance Limited

has resulted in the development of a new annual

insurance product – Home Protection Plan. As the

Bank continues to invest in technology and

innovation, the Home Protection Plan,

underwritten by EFU General will cover customers

against loss in the event of burglary, fire, flood,

earthquake and other perils. Mohsin Ali Nathani,

Chief Executive, Standard Chartered Pakistan

commented, ‘EFU General Insurance adds

another financial solution to our product suite for

customers. We are proud to distribute this

insurance plan through our platform thereby

providing our customer base with need-based

insurance solutions.’ PRESS RELEASE

CORPORATE CORNER

MUZAFFARABAD: Taqdees Gillani, adviser to prime minister AJK and chairperson Kashmir

Cultural Academy, along with Rashid Banday, General Manager Pearl Continental Hotel

Muzaffarabad, Tahir Mahmood Khan, General Manager Events Marketing, Media &

Communications Hashoo Group hotels, cuts the ribbon to inaugurate the Spring Festival

2013 at the Pearl Continental Hotel Muzaffarabad. PR

02

B

ISLAMABAD

AGENCIES

PAKISTAN’S government duringthe first nine months of the cur-rent fiscal year has spent $11.08billion on petroleum imports ascompared to $11.14 billion in the

same period last fiscal, according to Pak-istan Bureau of Statistics.

The petroleum imports worth $11.08billion are almost equal to the country’s for-eign exchange reserves of $11.6 billion.

Imports of petroleum products in-creased by 12.5 percent to $7.027 billionover the corresponding period. However,crude petroleum imports declined by317.14 percent to $4.05 billion.

Pakistan’s total imports during July-March 2012-13 stood at $33.4 billion, whileexports were $18.02 billion. During the pe-riod, machinery imports increased by 17.3percent to $4.88 billion, of which the tele-com sector’s imports rose by 28 percent to$1.21 billion (including $536.7 millionwere spent on mobile phones imports).Construction and mining machinery im-ports increased by 9.3 percent to $110.4million. On the other hand, office machin-ery imports declined by 7.16 percent to$196.6 million, textilesmachinery by 12percent to$277.8 mil-lion, powergenerationmachineryby 6.6 per-cent to$ 7 7 3 . 5

million, electrical machinery and apparatusby 4.2 percent to $592 million and agricul-tural machinery by 13.2 percent to $82.1million over the corresponding period lastyear. Manufactured fertilisers importsdipped by 53.6 percent to $494.6 million,plastic materials by 10.7 percent to $1.03billion, insecticides by 43 percent to $55.3million, while medicinal products importsincreased by 17.5 percent to $583 millionover the corresponding period last year.

Under the completely built units’(CBU) category, during July-MarchFY2012-13 the imports of buses, trucks andother heavy vehicles increased by 3.6 per-cent to $107.3 million and motor cars by 2.1percent to $259.8 million. Under the com-pletely knocked down/semi-knocked downcategory, imports of buses, trucks and otherheavy vehicles rose by 1.87 percent to$94.7 million, while imports of motor carsfell by 19.5 percent to $275.35 million.

In view of food items imports, the econ-omy spent $3.35 billion, which was 11.9 per-cent less than last year. Under this category,palm oil imports stood at $1.54 billion, 10.2percent less than last year. Spices importsplunged by 33 percent to $51.8 million andimports of milk, cream and food for infants

also declined by 17.6percent to $100.4million. Further, tea

imports increased by9.13 percent to $296.5 million. During thesenine months, $2.4 billion was spent on gold,iron and steel imports, which was 18.1 percentmore than last year. Gold imports totalled$159 million, up by 33.5 percent. Iron andsteel scrap were imported at $494.3 million,while $1.12 billion was spent on iron and steelimports during the period under review.

On the other hand, textile exports dur-ing the aforesaid period stood at $9.63 bil-lion against 8.99 billion last year, depictingan increase of 7.1 percent.

Exports of cotton yarn increased by29.1 percent to $1.65 billion, cotton clothby 11.6 percent to $1.99 billion, tent canvas

and tarpaulins by 30.9 percent to $84.9 mil-lion and readymade garments by 10.27 per-cent to $1.32 billion, knitwear by 2.8percent to $1.51 billion, and towels by 18.1percent to $577.7 million.

Bedwear exports stood almost stagnantat $1.31 billion, while raw cotton ex-ports plunged by 65 percent to$126.7 million over the pre-vious year. Rice exportsdeclined by 7.12 per-cent to $1.4 billionover $1.51 billionrecorded last year.

Exports of pe-troleum and coalwent down by 99.7percent to only$2.28 millionagainst $721.9 mil-lion in the correspon-ding period last year.Cement exports shot upby 22.8 percent to $421million over the same periodlast year. Exports of jewellery in-creased by 92 percent to $1.11 billion,gems by 17.6 percent to $3.1 million, andfurniture by 23.9 percent to $5.6 million.

Carpets, rugs and mats exports declinedby 5.1 percent to $87.8 million, whereas ex-ports of leather manufacturers increased by2.2 percent to $417.2 million and tannedleather by 6.4 percent to $334.2 millionover the corresponding period last year.

Food items exports increased by 11.4percent to $3.43 billion, of which wheat ex-ports declined by 57 percent to $45.8 mil-lion and tobacco by 23 percent to $15.6million over same period last year.

Exports of fish and fish preparations in-creased by 4.4 percent to $232.4 million,vegetables by 61 percent to $171.22 mil-lion, spices 45.5 percent to $48 million andmeat and meat preparation by 28.4 percentto $157.54 million over same period lastyear. During these nine months, sugar ex-ports stood at $297.6 million.

secP sets principles ofcorporate governancefor non-listed firmsKARACHI: The Securities and ExchangeCommission of Pakistan (SECP) issued draftprinciples of corporate governance for non-listed companies for stakeholders’

comments. The set of thirteenprinciples aim to promote

transparent and accountablegovernance practices in

non-listed entities. Therecommendedgovernance rules for non-listed companies in linewith best internationalpractices and were formulated while keeping in viewthe domestic corporate environment. The SECP hadintroduced the Code of Corporate Governance (CCG)for listed entities in March this year. The SECP believes

that virtuous corporate governance in non-listedcompanies will yield higher investments and capital

formation from local and foreign investors, and reduceeconomic vulnerability to financial crisis. Moreover,

improved corporate governance practices may also assist nonlisted companies (NLCs), looking to be listed on stock

exchanges, in their smooth transition to be a listed company.Companies following good corporate governance principles may benefit

from higher valuations, improved profitability, and may gain broader access toexternal financing than their poorly-governed peers. Empirical evidence havebeen gathered in the form of numerous research reports to support the idea thatthere is a correlation between adopting the basic principles of corporategovernance, namely fairness, transparency, accountability, responsibility,organization’s performance and competitiveness. NLCs constitute the bulk ofbusinesses in Pakistan; over 60,000 NLCs are registered with the SECPcompared to only 604 companies listed on the country’s stock exchanges.Recognizing the significance of NLCs to the national economy, Principles ofCorporate Governance have been formulated to extract the potential ofimproved corporate governance practices in non-listed segment of the nationaleconomy. The principles of good governance are presented on the basis of adynamic phased approach, which takes into account the degree of openness,size, complexity and level of maturity of individual companies. NLCs canextract from this stepwise approach useful guidelines to promote theirsustainability, to bring external parties to their boards, to attract funds, and tosolve issues between shareholders. SECP strives to provide a regulatoryenvironment which is conducive for development and promotion of a robustcorporate sector and ensures promulgation of balanced regulations. Theseprinciples are a set of guidelines from the SECP and will only be applicable ona voluntary basis. STAFF REPORT

POL imports fall slightlyin nine months

Companies following good

corporate governance principles may benefit

from higher valuations,improved profitability, and may gain broader

access to external financing than their

poorly-governed peers.

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