Pakistan: Economic Survey 2011-12 unveiled

from The International News (Pakistan)..

Friday, June 1, 2012

ISLAMABAD: Federal Minister for Finance, Dr. Abdul Hafeez Shaikh on the eve of historic “election budget” for the fiscal year 2012-13 said that economically this had been the most difficult year for the whole world, Geo News reported.

He said this while pulling the curtain on the Economic Survey 2011-12 during a press conference here in the federal capital.

Talking to the journalists he revealed that amid domestic and international challenges, Pakistan’s GDP rate in the outgoing fiscal year was around 3.7 percent, whereas economic growth was to the tune of 3 percent a year earlier (FY11).

“The growth rate for a country like Pakistan should be at least five to six percent and this is our medium term goal,” he said.

“We had our share of misfortunes, calamities, and other unforeseen crisis in the outgoing year. We noticed foreign investors interest in Pakistan waning owing to a various reasons. As a result investment from the overseas shrank alarmingly”, the federal minister said.

Shaikh said that high oil prices in the international market had affected economies all over the world, including Pakistan’s, and that Taliban and Al-Qaeda-linked violence deterred foreign investors. Pakistan has also suffered from a second consecutive year of major flooding, totting up losses of $3 billion, Shaikh said.

He said that no government in the world possessed any “weapon” that could shoot the skyrocketing inflation down.

“We have also borne the brunt of this inflation, no government likes to watch people losing their affordability. We hope things turn for the better in the upcoming budget.”

Going forward Shaikh dropped clues of ease in the prices of commodities especially fuel.

The minister said the budget deficit was five percent for the period July 2011 to April 2012. External forecasts predict it will nudge closer to seven percent of GDP for the fiscal year amid warnings that the government is running out of ways to fund it.

The IMF bailed out Pakistan with an $11.3 billion loan package in 2008 that stopped last November after Islamabad rejected strict reform demands, largely over tax. Shaikh said tax collection had increased by 25 percent compared to the previous year.

“For the first 10 months we had tax collection of 1,450 billion rupees as compared to 1,050 billion rupees last year and it is an increase of 25 percent which is unprecedented in Pakistan’s history,” Shaikh said.

The country’s tax revenues are among the lowest in the world at just 9.8 percent of GDP in fiscal 2010-2011, says the Asian Development Bank.

Less than two percent of the population pays tax on their income.

The minister said the government had reduced its expenses by 10 percent. Inflation stood at 10.8 percent, compared to 13.8 percent during the previous fiscal year, he said, adding: “We have adopted a tight monetary policy.” Pakistan has also missed out on payments from the United States for its efforts to fight militancy under the Coalition Support Fund (CSF).

This brought around $8.8 billion into Pakistan’s coffers between 2002 and 2011, including $1.5 billion in 2009-10, but Islamabad stopped claiming the money as ties with Washington collapsed in the wake of the raid that killed Osama bin Laden last year.



Saudi Arabia: Kingdom’s economy buoyant and strong: IMF

from Saudi

31 May 2012

Six percent GDP growth projected

WASHINGTON — The International Monetary Fund (IMF) has praised Saudi Arabia’s “exceptionally strong and buoyant” economic performance.

According to a press release issued after the IMF’s annual consultation mission to Riyadh which concluded recently, the Kingdom’s economic performance has been exceptionally strong with a buoyant outlook. “Overall real GDP is estimated to have grown by 7.1 percent in 2011, with eight percent growth recorded in the non-oil sector — the highest since 1981. And the private sector growth is seen at 8.5 percent,” Masood Ahmed, IMF’s Director of the Middle East and Central Asia Department, said at the conclusion of the 13-day mission visit to Riyadh.

“Saudi Arabia has provided important support to the global economy during a period of high global uncertainty, including through its actions in stabilizing the global oil market,” Ahmed said.

“Reflecting prudent economic management, the economy is likely to remain buoyant. On current trends, real GDP is projected to grow by six percent in 2012. The private sector is again expected to lead the way, reflecting the increased role of the private sector in the economy,” Ahmed said.

“Targeted government investment alongside product and labor market reforms can facilitate a more dynamic private sector and stimulate job creation for (Saudi) nationals. A strong and resilient financial sector also supports this process,” Ahmed said.

Inflation will likely remain modest at around five percent in 2012, while fiscal and external surpluses are expected to remain strong at almost 17 and 27 percent of GDP, respectively.

A growth of imports and increases in workers’ remittances had, Ahmed said, combined with expanded financial assistance to neighboring countries to “exert a positive spillover” that had “helped support other economies in the region and beyond.”

Ibrahim Al-Assaf, Saudi Finance Minister, said last week that the Kingdom was in the process of finalizing a $2.7-billion aid package for Egypt.

But Ahmed added that regional instability and the possibility of its spillover to global oil markets meant the Kingdom’s future was still subject to a level of uncertainty.

During her visit to Riyadh in February, Christine Lagarde, IMF Managing Director, praised Saudi Arabia’s role in stabilizing the global economy.

Lagarde expressed “the IMF’s appreciation for Saudi Arabia’s important role in supporting the global economy, including its commitment to stabilize the oil market and its active participation in both international financial institutions, such as the IMF, and global economic policy discussions in the context of the G20.” — SG/SPA


Vietnam: More to do before becoming Asia’s Miracle, says Ministry

from News First (Vietnam)..

Saturday, 26 May 2012

The Ministry of Finance and Planning says that although Sri Lanka has won small victories within the government’s development policy framework, there are many challenges which have to be overcome in the journey towards becoming the miracle of Asia.

The Finance Ministry Secretary Dr. P.B. Jayasundera made this statement at the launch of the Ministry’s Annual Report for 2011 on Thursday.

Speaking at the media briefing, Jayasundera said the country had won small victories in reducing poverty, reducing unemployment, increasing employment opportunities and infrastructure development in 2011.

But the Secretary to the Ministry of Finance and Planing also pointed out that in achieving planned economic targets several factors remain, such as maintaining the balance of payments, growth in the health and education sectors and increasing savings.

Meanwhile, the Secretary to the Ministry of Finance and Planning also made clarifications on the current status of the National Savings Bank.

Meanwhile, the Securities and Exchange Commission has enforced a suspension effective immediately on the Chief Executive Officer of Taprobane Securities which acted as the broker in the controversial purchase of shares by NSB.

Issuing a media release, the Commission states that an order was issued suspending the Chief Executive Officer and Managing Director of Taprobane Securities, Dinal Wijemanne, from holding that position or positions in other companies.

The suspension order will be in effect until the ongoing investigation by the SEC into the actions of Taprobane Securities in the controversial purchase of The Finance Company PLC shares by the NSB, is completed.


ADX boosts platform with Nasdaq tech

from Khaleej Times (UAE)..

27 May 2012

The Nasdaq OMX Group announced that it has entered an agreement with the Abu Dhabi Securities Exchange, or ADX, to upgrade their trading platform.

Under the terms of the agreement, the ADX renews its contract with Nasdaq OMX for a further five years and commits to upgrade to a trading platform powered by Nasdaq OMX’s X-stream technology. The upgrade is expected to be rolled out at the ADX in the second half of 2013.

The upgrade will provide the ADX with a proven, functionality-rich, multi-asset trading platform that complies with international standards and policies.

“Nasdaq OMX has consistently delivered reliable trading technology to the ADX for over a decade and now we look forward to taking the next step in our partnership. Our upgrade to Nasdaq OMX’s X-stream technology will enable significant performance and functionality capabilities that create advantages for both regional and international investors,” ADX director-general Rashed Al Baloushi said.


UAE central bank open to some lending limit exemptions

from Khaleej Times (UAE)..

(Reuters) / 31 May 2012

DUBAI — The United Arab Emirates’ central bank could grant exemptions to some banks over planned lending limits to sovereign and state-linked entities, pushing compliance beyond the September 30 deadline, its chairman told a local newspaper on Wednesday.

The regulator said in April’s ruling it would cap lending at 100 per cent of a bank’s capital base to governments of all emirates and their non-commercial entities, and 25 per cent to individual borrowers, the first such change to the rules in nearly two decades.

A number of UAE banks — including the country’s big two, Dubai’s Emirates NBD and National Bank of Abu Dhabi — are over the limit and have said they would discuss with the authorities about how to manage their balance sheets in light of the rule-change.

The central bank is willing to cooperate with heavily-exposed banks and extend the deadline for compliance on a case-by-case basis, Khalil Mohammed Sharif Foulathi, chairman of the central bank, was quoted as saying by Arabic-language Al Khaleej newspaper.

“We will impose deadlines on banks in accordance with a bank’s position and the extent of its exposure and based on the findings and demands it presents to the central bank, but we will absolutely not annul or change any of the recent amendments,” he said.


UAE climbs up in economic competitive rankings

from Khaleej Times (UAE)..

Chris Hough / 31 May 2012

Reliable infrastructure, a business-friendly environment and a dynamic economy are the key attractiveness indicators that have helped the UAE climb 12 places to 16 in the 2012 World Competitiveness Yearbook (WCY) rankings

The WCY rankings measure how well countries manage their economies and human resources to increase their prosperity. The survey is conducted by IMD, a global business school based in Switzerland.

The most competitive of the 59 ranked economies in 2012 was Hong Kong, followed by the US and Switzerland. But the UAE was the biggest climber, jumping from the 28th position in 2011 to the 16th this year. Dr Hischam El Agamy, Executive Director, IMD, said a fertile environment for business made a big difference over the past 12 months.

“This result, in my opinion, is down to the alignment of government and business. Businesses in the UAE have made the most of policies and framework provided by the government. We’ve looked into this data several times and there are no mistakes. The government did a great job creating the framework for businesses to grow,” said El Agamy, who is responsible for IMD’s activities in south-east Europe, Africa, the Middle East, South Africa and South-east Asia.

In the IMD survey of more than 4,200 international executives, respondents were asked to select five key attractiveness indicators of each country’s economy from a list of 15. The most popular response for the UAE was reliable infrastructure (61.9 per cent) followed by business-friendly environment (58.3), dynamism of the economy (51.2), open and positive attitudes (46.4) and competency of government (39.3).

Looking towards the next 12 months, El Agamy believes the UAE is in a position to weather the economic storm originating from Europe. He cites the UAE’s key attractiveness indicators as reasons why the economy could continue to grow.

“We’re all on the same planet, but some countries have more opportunity for growth than others,” said El Agamy. “The Middle East is a prosperous region but a lot depends on what happens in other parts of the world. There is still a lot to be done in some countries, but the UAE can counter balance between Europe and Asia. It is attracting investors from the right places; Asia sees the UAE as a great hub.”

The IBD World Competitiveness Yearbook has been published since 1989 and is recognised as one of the leading annual reports on the competitiveness of nations.

Arab investors to partner with Ugandan Businesses

from New Vision (Uganda)..

Publish Date: May 30, 2012

By Samuel Sanya


President Museveni shaking hands with the Chairman of the FGCC at the forum
President Yoweri Museveni has welcomed a high powered delegation of 60 Arabian Investors, urging them to boost the private sector through investments in capital intensive businesses.

He urged the investors to focus on value addition of agricultural produce, adding that doing so will transform the industrial sector and the entire economy in record time.

“Local investors are concentrating on small businesses in the transport sector, hair salons, night clubs and real estate. We need investors like you who can spend in excess of $20m (sh50b),” the President said.

“The government is working to ensure that electricity supply deficits are stamped out. The macro-economy is stable. All crops can do well here and our tourism sector is a gold mine,” he added.

The President was speaking at the start of a three day Gulf Cooperation Council (GCC) investment forum at the Sheraton hotel in Kampala.

Representatives fromUganda’s private sector, ministers, UN agencies, development agencies and banks are in attendance.

The GCC delegation is composed of investors from Bahrain, Kuwait, Oman, Saudi Arabia, United Arab Emirates and Qatar.

The investors are seeking to buy into existing Ugandan businesses in the cotton, dairy, meat, tourism, energy, fruit and vegetables subsectors in assition to  forming joint ventures.

The president explained that Uganda enjoys cordial trade ties with countries in the Common Market for East and Southern Africa with a market of 500m people, the EAC with 130m people and a market of 34m people locally.

The country also enjoys quota and tax free trade agreements with the US and Europe through African Growth Opportunity Act (AGOA) and the EBA (Everything But Arms) programs. He also revealed that  Somalia has applied to join the East African Community (EAC) and that the African continent is moving towards a common market in the year 2030.

Maria Kiwanuka, the finance minister pointed out that Uganda is well positioned at the heart of Africa to act as a distribution hub for the continent.

“The country is reaping the benefits of economic stability. Going forward, government efforts will be focused on reducing the cost of doing business,” she said.

She urged the investors to exploit the lucrative natural resources sector with emphasis on the young oil and gas sector.
Sheikh Ebrahim Al Khalifa, the 18th in the line of succession to the Bahraini throne and UNIDO Board of Trustees chair noted that the partnership with countries in the gulf will reduce unemployment rates in the country.

“There is a positive expectation that the partnership between and Uganda and the countries in the gulf will lead to strong economic growth through value addition to Ugandan products,” he said.

Ambassador Abdelaziz El Khelef, the director general of the Arab Bank for Economic Development in Africa pointed out that Gulf States are keen on exploiting the comparative advantages in Uganda and the GCC.

“Let us spare no effort in creating synergies and exploit our different areas of competitive advantage,” he said.

Ambassador Khalil Al Khonji, the chairman of the Federation of the GCC chambers of commerce noted a vibrant private sector and Foreign Direct Investment (FDI) are essential to achieve economic growth.