Monday, October 19, 2009

Italy to provide $10bn credit line ! Korean companies to Invest in Pakistan !

Pakistan has raised eyebrows again. Even with terrorism concerns the 7th largest country in the world brings in more foreign investment from Asia and Italy !

Italian government has agreed to provide a credit line equivalent to $10 billion for Italian investors willing to invest in Pakistan.

This was stated by the chairman, Board of Investment (BoI), Saleem H Mandviwalla, at a press conference here on Saturday.

BoI chairman, who accompanied President Asif Ali Zardari during his recent official visit to Italy, said talks with Italian Embassy for materialising this credit line have now been initiated.

He expressed the hope that the fund would be ready in the next six months.

He said that this credit line has been promised by the Italian Prime Minister, Silvio Berlusconi, in response to the request of President Asif Ali Zardari during a bilateral meeting in Rome.

Mandviwalla said this request was well received by the Italian premier and Mr Berlusconi also promised that he would bring a large delegation of leading Italian investors to Pakistan.

He hoped that this fund will help boost Italian investment in Pakistan in a big way.

The BoI chairman said that leading Italian companies have shown keen interest in having joint ventures in Pakistan during a meeting with the President of Pakistan.

He pointed out that Pakistan-Italy Chamber would be established in the next two years.

Talking of his meetings with leading South Korean firms, including Daewoo, Hyundai, LOTTE and K Water, he said they are keen to invest in Pakistan.

The chief executive of LOTTE has indicated that his company was willing to invest at least $10 billion in Pakistan by way of acquisitions in the next five years.

They have already purchased Pak PTA and planning to invest another $300 million to acquire food and raw material companies in Pakistan, he added.

Similarly, the BoI chairman said that K Water was willing to construct dams in Pakistan and Korean Electric Power Company was interested in power generation and distribution in Pakistan.

Wednesday, October 14, 2009

Pakistan gets New F-16's from the US !

The latest F-16's can carry a heavier and larger payload of weaponary and would increase Pakistan's capability to haul Nuclear weapons !

The US has unveiled the first of 18 new F-16s being produced for Islamabad amidst a furore in Pakistan over the tough anti-terror conditions attached to a bill to provide $7.5 billion worth of non-military aid over the next five years.

Officials including the chiefs of staff of the US and Pakistan air forces were on hand to witness the event at Lockheed Martin's Fort Worth, Texas, facility Tuesday.

Air Chief Marshal Rao Quamar Suleman, Chief of the Air Staff, Pakistan Air Force (PAF), accepted the first F-16 Block 52 aircraft on behalf of Islamabad. Also present were Husain Haqqani, Pakistan's Ambassador to the US, and other senior officials.

Suleman said the roll out shows that the programme is 'on track' despite it experiencing many ups and downs.

The US government was represented by Kay Granger, a House member from Texas and Gen. Norton Schwartz, Chief of Staff of the Air Force.

'Peace Drive is the flagship of modernisation for Pakistan's Air Force. It is the latest configuration of the best fourth generation multirole fighter available in the world today,' said John Larson, vice president of F-16 programmes for Lockheed Martin.

The aircraft order is designated as 'Peace Drive I', continuing a long tradition of naming F-16 international sales programmes with the word Peace.

The programme raises the total number of F-16s ordered by Pakistan to 54.

The Pakistan Air Force received its first F-16, in the Block 15 F-16A/B configuration, in 1982. Pakistan has been operating Lockheed Martin aircraft since 1963, when it received C-130B airlifters.

The Peace Drive I order is for 12 F-16Cs and six F-16Ds, all powered by the Pratt & Whitney F100-PW-229 engine.

The first aircraft - a two-seat F-16D model - will be delivered to the US government (as agent for Pakistan in the Foreign Military Sales process) in December, with the remainder following in 2010.

Pakistan 'No 1' among emerging markets peers !

Pakistan stands at number one position for providing highest equity returns and dividends to local and foreign companies on their reported earnings and profitability within emerging markets of Asia, Europe, Middle East, Africa and Latin America, The Nation deduced from IMF report on Monday.
This report further indicates that Pakistan equity market has been put on the sustainable path of growth and stability since the beginning of the first quarter of calendar year, 2009.
IMF statistical output on emerging markets’ dividend-yield ratios revealed that despite witnessing slowdown in FDI and other investment inflows particularly portfolio investment, the domestic financial market is performing well in terms of offering better profits and dividends.
The divided-yield ratio in Pakistan is still stayed at 9.1 per cent since January 2009, which is most attractive and highly profitable for the local and foreign blue chip companies, operating in oil & gas exploration, petroleum refining, fertilizer and financial sectors of economy as compared to its emerging and regional markets’ peers.
IMF Global Financial Satiability Report said Czech Republic and Egypt are runners up with providing 7.4 per cent and 6.3 per cent rate of return on equities respectively.
Meanwhile, report found out that the solvency and adequacy of the banking system is somehow remaining intact. As per the financial soundness indicators compiled by report, Pakistan’s scheduled banks non-performing loans (NPLs) to total loans grew by 11.5 per cent by end-March 2009, which is number 4 amongst its emerging markets financial business counterparts of the Middle east and Central Asian regions.
Earlier, report said the immediate outlook for the financial system has improved markedly since the April 2009.
Financial markets have rebounded, emerging market risks have eased, banks have raised capital, and wholesale funding markets have reopened. Even so, credit channels are still impaired and the economic recovery is likely to be slow.

Tuesday, October 6, 2009

Cunning Musharraf Siphoned US Military Aid into the Pakistan Economy !

Pakistan Economy went on an over drive during the Musharraf Era ! Even though critics of Musharraf are quick to shrug off the economic growth part of the 9 years of his rule but the graphs speak louder then the shrugs !

News report coming in from the West and Pakistani military reveal more about the nine years of Musharraf rule. Statements from ex-generals and the Pentagon sum up on what went on in Pakistan in the last decade.

After taking over the helm in Pakistan Musharraf strategized and siphoned Billions of Dollars of US Military aid into the ailing Pakistan Economy ! Ex-Generals authenticate news reports which claim that Military aid was funneled for mega projects in Pakistan. The claims that the diversion of money hurt the military but helped the Economy tremendously which grew at a staggering 8%.

In a related development Pentagon said that there is no mechanism to track money sent to Pakistan and US aid funds were used to buy weapons better suited to fighting India then the Taliban !

Its widely suspected that these stories have been circulated by former President Musharraf himself. Analysts say that fearing corruption Musharraf has tipped the US on how to give 'Project specific' aid to Pakistan. Relying on these reports US has mandated that all projects be audited every three months.

On the sidelines of this development Black Water with its new name Xe (pronounced Zee) has moved into Pakistan and is sub-contracting infrastructure projects all over Pakistan.

Although the above caption is bad news for US but for Pakistan its a sigh of relief that the army did not just get billions of dollars of aid. US aid was pumped into the economy and Pakistan went through an era of 8% growth during the last 6 years of Musharraf's rule.

Mega projects like the Gwadar Port, Karachi-Makran Highway, Khushab Nuclear Plant which produced a new generation of lighter fuel plutonium-based weapons, Islamabad-Peshawar Highway, Upgrading of Indus highway, Buying of land for Basha Dam, Chashma I and II Nuclear Plants etc. were all commenced. It was amazing that Pakistan's debt remained at $38 billion and dollar stood fast at Rs. 60 during the 9 years of Musharraf rule.

The US has long suspected that a majority of the billions of dollars it has sent to Pakistan to battle the Taliban has been diverted to the domestic economy and other causes, such as fighting India. However, the scope and longevity of the misuse has become clear after two army generals have claimed that between 2002 and 2008, while Al Qaeda regrouped, only $500 million of the $6.6 billion in American aid actually made it to the Pakistani military.

The generals, who spoke on condition of anonymity, had their accounts corroborated by retired and active generals, former bureaucrats and government ministers. They said former president Pervez Musharraf had served as both chief of staff and president at the time of the siphoning, making it easier to divert money to help Pakistan economically.

“The army itself got very little,” said General (r) Mahmud Durrani, who was Pakistan’s ambassador to the US under Musharraf. The military was financing the war on terror out of its own budget", which again is good news for Pakistan but bad for the US. The money was used for supporting Pakistan budget deficit and lowered Pakistan staggering $38 billion debt. Pakistan debt servicing decreased during the 9 years from 55% of the budget to 35%.

Its ironic that the details on misuse of American aid comes as Washington again promises Pakistan money. Analysts are suspecting that these stories are being implanted at this time to make sure that money is invested directly into Pakistan's infrastructure development programs. There has been talk of bypassing the Federal Government and funding the infrastructure projects directly. Legislation to triple general aid to Pakistan cleared Congress last week. The legislation also authorises “such sums as are necessary” for military assistance to Pakistan, upon several conditions, including certification that Pakistan is cooperating in stopping the proliferation of nuclear weapons. The US is also insisting on more accountability for reimbursing money spent.

Analysts are also suspecting that the former President on the sidelines of his 'lecture tours' in the US is supporting direct funding of the projects bypassing Zardari's Government. Former President has been lecturing Think Tanks in the US, Europe, India and the Far-East discussing the war on terrorism and Pakistan.

No mechanism: But the US still cannot follow what happens to the money it doles out. “We don’t have a mechanism for tracking the money after we have given it to them,” Pentagon spokesman Lt Col Mark Wright said in a telephone interview.

Pakistan has received more money from the US’ war fund than any other nation. It is also the least expensive warfront. The amount the US spends per soldier per month is just $928, compared with $76,870 in Afghanistan. Yet by 2008, the US had provided Pakistan with $8.6 billion in military money, and more than $12 billion in all. “The army was sending in the bills,” said one general. “The army was taking from its coffers to pay for the war effort — the access roads construction, the fuel, everything.”

Indian war: Former General Durrani alleged that some of the money from the US went to buying weapons better suited to fighting India than in the border regions of Afghanistan — armour-piercing tow missiles, sophisticated surveillance equipment, air-to-air missiles, maritime patrol aircraft, anti-ship missiles and F-16 fighter aircraft. This allegation again implies that the money did get spent and there are no allegation of corruptions just siphoning the money - again a sigh of relief to Pakistanis.

Meanwhile, military spokesman General Athar Abbas said the US gave nothing to offset the cost of Pakistan’s dead and wounded in the war on terror. The hospital and rehabilitation costs for the wounded have come to more than $25 million, he said - costs that the US does not compensate Pakistan for. Another allegation talks about an hospital built with the US aid and did not end up in anyones Swiss account !

Musharraf’s spokesman, General (r) Rashid Qureshi, flatly denied that his former boss had shortchanged the army. “He has answered these questions. He has answered all the questions,” he added.

Saturday, October 3, 2009

Pakistan to set up MI5 type counter Intelligence unit !

Pakistan has been insisting on getting material help on new intelligence gathering techniques from the West plus UAV Drones and Night Goggles! This is major coup in its plan to reformulate a new counter intelligence agency on the pattern of MI5.

Britain will assist Pakistan to set up a counter-intelligence agency on the line of British secret service, MI5.

BBC's Richard Watson quoted senior British and Pakistani counter-terrorism officials as saying that British training and funding will be made available to the new security authority.

In the first phase, 200 experts will be employed in Pakistan, covering extremism and religious affairs, he said.

One of these will examine the alleged role in religious schools and radicalisation.

He added that there will be a new counter-terrorism strategy within six months, and research projects will be launched.

British intelligence has estimated that almost three quarters of terrorist attacks in Britain have their origins in Pakistan.

British experts fear that Pakistan's intelligence agency ISI could block progress, as it would want to remain in charge of terrorist investigations.

However, Pakistani sources insisted that the ISI is fully on board.

The Home Office in UK declined to comment on funding, but said it strongly supported the move.