Fiscal year 2014-15: ‘Trimmed’ uplift budget proposed for next year

The Ministry of Finance has formally indicated Rs506 billion for the Public Sector Development Programme (PSDP) in the financial year 2014-15, which will commence from July. DESIGN-FAIZAN DAWOOD/FILE

ISLAMABAD: 

Federal authorities have proposed Rs506 billion for development spending in the upcoming financial year (2014-15), which is 6% less than the original development budget of the current fiscal year – continuing the policy of giving less priority to development spending in its second year of rule.

The Ministry of Finance has formally indicated Rs506 billion for the Public Sector Development Programme (PSDP) in the financial year 2014-15, which will commence from July.

According to Ministry of Planning and Development officials, the Pakistan Muslim League-Nawaz government had announced Rs540 billion for the PSDP for the current fiscal year. The proposed budget is Rs34 billion or 6.3% less than this year’s development budget.

So far, the indications are that the actual development spending will remain significantly lower than the budget approved by Parliament.

The reduced development spending will have serious implications, as the government spending for development purposes is one of
the main contributors to economic growth. Economists like Dr Nadeem ul Haque, the former Deputy Chairman of the Planning Commission, have been advocating that austerity should be eschewed for the sake of economic growth. The new development budget envelope has been indicated to the Ministry of Planning and Development that will now work out the proposed development budget ceilings of each federal ministry and department.

However, Prime Minister Nawaz Sharif is the authority to approve a development budget higher than the indicative one during the National Economic Council meeting, which takes place days before the budget is presented in Parliament.

The development budget has been indicated under the three-year Medium-Term Budgetary Framework (MTBF) – a document that indicates the budget of the new fiscal year in addition to setting rolling targets of the next two financial years.

From July through December 2013-14, the government had spent Rs120 billion on development programmes, restricting the expenses to 22% of the annual development budget of Rs540 billion. According to standing financial management instructions prescribed by the finance ministry, the government is entitled to spend 40% of the annual budget in the first half of the fiscal year, while the remaining is spent in the next half.

The federal government resorted to reducing the development budget after it failed to curtail the non-development spending, which increased to almost half of the total budget in the first half of the fiscal year.

Of the Rs540 billion development budget, an amount of Rs115 billion had been allocated for new initiatives. In fact, the Ministry of Finance has not yet formally indicated the availability of the Rs115 billion, said Asif Sheikh, the planning ministry spokesperson.

The federal government has linked the availability of Rs115 billion with the Federal Board of Revenue’s ability to achieve Rs2.475 trillion annual tax target, a goal that the FBR is surely set to miss. The FBR has so far posted an average growth rate of 17% while it needs 28% to collect Rs2.475 trillion revenues.

Officials said that after witnessing the results of the first seven months, the federal government was expecting that FBR may not collect more than Rs2.345 trillion. The reduction in collection will also have adverse implications on next year’s budget, they added.

Many sectors can benefit from GSP Plus’

“The GSP Plus will boost Pakistan’s business with the European countries in almost all sectors of the economy including leather and sports goods,” said German Ambassador to Pakistan Cyrill Jean Nunn. PHOTO: FILE

LAHORE: 

German Ambassador to Pakistan Cyrill Jean Nunn pointed out that the GSP Plus Status was not just textile-specific but also offered opportunities to other sectors of the economy, and therefore, Pakistani businessmen should enhance their interaction with their European counterparts.

The ambassador was speaking at the Lahore Chamber of Commerce and Industry on Tuesday.

“The GSP Plus will boost Pakistan’s business with the European countries in almost all sectors of the economy including leather and sports goods,” he said. “Germany intends to develop and strengthen mutual trade relations with Pakistan and will make all-out efforts to ensure access for exporters to the European Union (EU) and German markets.”

He was hopeful of future investments by German companies that showed a keen interest in Pakistan, especially in the energy sector.

“Several German companies are ready to establish joint ventures with the business community of Pakistan in different trade fields.  Both countries have enjoyed friendly and cordial trade relations, and the time is ripe to further strengthen this,” said Nunn.

Apart from bilateral trade and economic relations, LCCI President Engineer Sohail Lashari shed light on the rich German history, culture and its contribution to the international society particularly after the second World War.

Lashari said that a consistent rise in two-way trade was evident of the fact that the joint efforts made at the public and private sectors level were paying off. Therefore, there was a need to maintain that positive trend to minimise the trade deficit gap.

“Pakistan has been experiencing a positive balance of trade with Germany but in 2012, it was not the case. However, we are hoping to go back to the same scenario,” Lashari said

ECC decides to extend ban on import of gold till March 20

Finance minister Ishaq Dar presides over the ECC meeting on Wednesday. PHOTO: PID

ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Wednesday extended a temporary suspension on import of gold till March 20, 2014.

The meeting was chaired by Finance Minister Ishaq Dar in Islamabad on Wednesday.

The ECC extended the temporary suspension on import of gold under SRO 760 till March 20, 2014. The Finance Minister directed Secretary, Ministry of Commerce, FBR and SBP to hold a meeting with all the stakeholders and bring proposals and recommendations to ensure export of gold jewelry to the extent of the gold imported for value addition.

Earlier, the finance secretary presented a review of the key economic indicators. The ECC was informed that the large scale manufacturing sector has witnessed a growth of 6.8% as compared to 2.3% of corresponding period of the last fiscal year. Fertiliser sector has shown a growth of 28.5%, food beverages 18%, paper and board 17%, electronic 12% and leather products 9.61%.

The ECC was informed that year-on-year inflation rate based on Consumer Price Index (CPI), Whole Price Index (WPI) and Sensitive Price Index (SPI) for the month of January 2014 remained at 7.9%, 8.1% and 7.7% respectively. He informed ECC that the reported stock of wheat as on February 2014 is 2.7 million tons showing sufficient quantity of local wheat is available for daily releases to mills.

The total reported stock of sugar stood at 2.3 million tons and the stock of various POL products average 20 days supply on February 24, 2014.

It was further informed that workers’ remittances have reached to $9.033 billion in July 2013-January 2014 against $8.206 billion during corresponding period in 2012-13 showing an increase of 10.1%.

ECC was informed that on February 24, 2014, the foreign exchange reserves stood at $8.6 billion. Finance Minister observed that the foreign exchange reserves are stable and improving gradually, which is a healthy sign for the economy. He hoped that the exchange reserves would reach double figures by the end of March this year.

Dar said that in his last meeting with IMF, they also observed that GDP growth rate is getting better even more than their expected target. He said that with the significant increase in FBR collection, he expects that the provinces would get Rs219 billion more than the last year.

The ECC was also informed that during July-January 2013-14, FBR tax collection stood at Rs1,197 billion as compared to Rs1,022 billion in the same period last year, thereby posting an increase of 17.2%. During this period inflow of Foreign Direct Investment stood at $1,116 billion.

The meeting was also attended by the Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, Minister for Commerce, Engineer Khurram Dastgir Khan,  Minister for Science and Technology Zahid Hamid, Minister for Planning, Development and Reform Ahsan Iqbal, Minister for Industries and Production Ghulam Murtaza Khan Jatoi, Minister for National Food Security Sikandar Hayat Khan Bosan, Secretaries of the concerned ministries and senior officials of the government.

Resumption of POL supplies at IFEM

The ECC also approved summary of the Ministry of Petroleum and Natural Resources for resumption of POL supplies at six Non-Internal Freight Equalization Mechanism (IFEM) Oil Depots subject to the following:

i) Government of Pakistan will not take any financial impact.

ii) OGRA will put in place an appropriate mechanism to ensure the prevention of dumping and misuse of IFEM.

The location of oil depots where POL supplies will be resumed include Daulatpur, Khuzdar, Sangi, Habibabad, Kundian and Serai Naurang.

It may be mentioned that due to reduced availability of gas to CNG stations and use of MOGAS in generators, the demand of POL products has increased up to 21% during the last two years necessitating for the opening of abundant depots to overcome the shortage. By opening of the above depots, 26,000MT storage capacity will be available in the system.

OGRA will monitor the movement of products as per their rules/policies.

Merkel in Israel to discuss Iran, peace talks

German Chancellor Angela Merkel. PHOTO: AFP

JERUSALEM: German Chancellor Angela Merkel arrived in Israel Monday to discuss nuclear talks with Iran and to encourage Prime Minister Benjamin Netanyahu to reach a two-state solution with the Palestinians.

“We are going to discuss the Iranian nuclear programme and ways of progressing talks with the Palestinians,” Netanyahu said as he met Merkel at his Jerusalem residence, according to Israeli public radio.

“Israel wants to reach a real peace that will put an end to the conflict” and secures recognition from the Palestinians of Israel as the state of the Jewish people, Netanyahu added.

Germany is part of the so-called P5+1 group of world powers – along with the United States, Britain, France, China and Russia – which hope to negotiate a comprehensive accord with Tehran in order to allay fears about Iran’s nuclear programme.

Netanyahu was an outspoken critic of an interim deal reached with Iran in November under which it agreed to curb or freeze parts of its nuclear programme in exchange for limited relief from crippling international sanctions.

The Israeli prime minister said Monday he hoped “Germany and the other P5+1 countries will insist on the genuine demands to prevent Iran from becoming a nuclear threshold state.”

Israel, the region’s sole if undeclared nuclear-armed state, has long suspected Iran of pursuing nuclear weapons, charges repeatedly denied by Tehran.

Ahead of her arrival, Merkel stressed she will be supporting efforts by US Secretary of State John Kerry to resolve the decades-old Israeli-Palestinian conflict.

“We need, as soon as possible, a stable two-country solution, with a Jewish state of Israel and at the same time a state for the Palestinians,” Merkel said in her weekly Saturday podcast.

Merkel and the 16 ministers accompanying her were due to sign cooperation agreements with Israeli ministers in a broad variety of fields including security, diplomacy, economy, justice, science and culture, Netanyahu’s office said.

Merkel dined with Netanyahu on Monday, with her official meetings due to begin the following day.

Germany and Israel have held regular “government consultations” since 2008.

On Tuesday, Merkel is to receive the Presidential Medal of Distinction from Israeli President Shimon Peres at his Jerusalem residence before returning to Berlin.

LinkedIn launches China version despite censorship fears

LinkedIn logo.

BEIJING: Business networking site LinkedIn has launched a Chinese version, attempting to tap the huge market while navigating a strict censorship regime that has seen other foreign social media giants banned.

China has the world’s largest online community with more than 618 million users. But its so-called Great Firewall blocks any online forums or content deemed sensitive, and it has barred access to Facebook and Twitter for several years.

Foreign tech giants must abide by strict rules to operate in the country. While the Chinese version of LinkedIn allows users to post public comments, unlike its English-language counterpart it does not currently allow group discussions.

LinkedIn pledged to be limited and open about its compliance.

“As a condition for operating in the country, the government of China imposes censorship requirements on Internet platforms,” CEO Jeff Weiner said in a statement on its website on Sunday.

Weiner promised that “government restrictions on content will be implemented only when and to the extent required” and that it “will be transparent about how it conducts business in China”.

“LinkedIn strongly supports freedom of expression and fundamentally disagrees with government censorship. At the same time, we also believe that LinkedIn’s absence in China would deny Chinese professionals a means to connect with others on our global platform,” he said.

The company, which targets working professionals on the job market, said it was targeting more than 140 million Chinese users — nearly half its existing 277 million global members.

Its English-language version has been available in China for more than a decade, where it has attracted four million users, the statement said.

British-based technology site theregister.co.uk was dismissive, saying: “In a nutshell, Weiner and co. decided a censored LinkedIn would still be more beneficial for China’s business professional than no LinkedIn at all.

“Or rather, that the prospect of 100m+ extra users was too good an opportunity to turn down because of trifling matter like freedom of expression online.”

Foreign tech giants have faced challenges in navigating China’s strict Internet controls, which are used to block expressions of discontent or other content that might undermine the control of the ruling Communist Party.

Yahoo elicited criticism in 2005 for allegedly giving the government details leading to the email account of a journalist who was later sentenced to 10 years’ jail.

Google halted its mainland China search engine service in 2010 after deciding it would no longer censor results.

Facebook and Twitter were banned after they were used by protesters in the Middle East and North Africa to organise uprisings starting in late 2010 that overthrew longstanding regimes, in what became known as the Arab Spring.

Microsoft’s Bing search engine came under scrutiny earlier this month following reports that Chinese-language searches for topics deemed politically sensitive by Beijing returned drastically different results to English-language searches — both inside and outside China.

Bing has denied censoring its Chinese-language search results outside China.

Domestic social media networks thrive in the country but face strict controls. Searches for sensitive terms are routinely blocked and offending posts are deleted.

China’s Supreme Court ruled that month that Internet users could face three years in jail if “slanderous” information spread online was viewed more than 5,000 times or forwarded more than 500 times.

China’s online population — defined as those who have used the Internet at least once in the past six months — is the largest in the world, having risen by 53 million in 2013 alone, according to the China Internet Network Information Center.

Australia turns away asylum-seekers to Indonesia in lifeboat

Asylum seekers from Afghanistan and Pakistan argue with Indonesian policemen at a temporary shelter in Merak, Indonesia's Banten province September 27, 2013. PHOTO: REUTERS/FILE

CILACAP, INDONESIA: A lifeboat carrying asylum-seekers, including those from Pakistan, has washed up on Indonesia’s main Java island, with those on board saying Australian authorities transferred them to the vessel and turned it around, officials said Tuesday.

It was the latest asylum-seeker turn-back by Canberra under its military-led operation aimed at stopping an influx of would-be refugees who board rickety boats in Indonesia and make the perilous sea crossing to Australia.

It was the second occasion this month that one of the orange, hard-hulled boats purchased by the Australian navy has washed up on Java.

The asylum-seekers on the first occasion also reportedly claimed the Australians had turned them around.

In the latest incident 26 asylum-seekers and five Indonesian crew were detained by Indonesian authorities at Karangjambe beach on Java’s south coast Monday, local navy officer Suwarto told AFP.

The boat was carrying would-be refugees from countries including Iran, Iraq, Pakistan and Egypt, said Suwarto, who like many Indonesians goes by one name.

“The orange lifeboat which originated from Australia… became stranded on a coral reef near the beach,” he said, adding it appeared to have sprung a leak.

Local immigration official Imam Prawira added: “The migrants told us Australian authorities had put them into the lifeboat and turned them around.” It was not clear how close they were to Australia when they were turned around.

Authorities in the Kebumen district of Central Java province also found a television, navigation equipment, batteries, floats and food in the boat, Suwarto said.

The issue of asylum-seekers has strained relations between Australia and Indonesia, which were already under pressure due to a row over spying, with Jakarta criticising Canberra’s hardline policies.

Ties were further soured when Canberra apologised to Jakarta for breaching Indonesian waters during its people-smuggling crackdown.

Australian Immigration Minister Scott Morrison last month confirmed for the first time that boats were being turned around as part of the government’s military-led Operation Sovereign Borders.

Under the operation, asylum-seekers can also be turned round in their original vessels if it is safe to do so.

No boats have made it to Australia since December 19, 2013 – the first time in six years that January has passed without a single boat arrival.

Hundreds of asylum-seekers have died making the dangerous sea voyage from Indonesia to Australia in recent years.

Changing environment: Dozens of Siberian ducks found dead near Tarbela Lake

While Wildlife Department claims only 6 Siberian ducks have been found dead residents say figures ran in double digits or more. PHOTO: FILE

HARIPUR: 

Dozens of migratory birds have been found dead at Tarbela lake, residents said on Monday. Wildlife Department officials suspect the birds might have eaten something poisonous.

The figures, however, are contested. While the Wildlife Department claims only six Siberian ducks have been found dead, residents say the figures ran in double digits or more.

Dildar Khan, an Afghan national living in a nearby refugees camp, told journalists that he saw dozens of dead birds on the banks of the lake near Khalabat Township Sunday afternoon and informed the wildlife authorities.

A local farmer said he saw nearly a hundred dead birds. He believes they were poisoned by someone who was trying to scare them off so they stayed away from his wheat crop on the reclaimed land.

The Wildlife Department’s sub-divisional officer, Abdur Rasheed, said he had the dead birds picked up from the lake and denied reports which claimed that more than six ducks were killed. He added that the dead birds have been sent to a Peshawar laboratory to determine the cause of their death. He added that other birds who frequent the region were safe and healthy.

Rasheed said an investigation was under way and if any local farmer was found guilty of poisoning the birds, the department would lodge an FIR against him under the Wildlife Act of 1975. He added that if found guilty by a court of law, the convict could face a fine and jail term.

Tarbela lake in Haripur is the largest lake in the country and serves as a temporary habitat for migratory birds, including Siberian ducks, that fly in every winter