DAILY BUSINESS NEWS SUMMARY IN BRIEF: 02.06.2011.....

Business News

Thursday, June 02, 2011 08:52
-	Dollar rises against yen amid Japan political uncertainty
-	Asian stocks slump after heavy Wall Street losses
-	Oil down in Asia on weak US economic data
-	Local stocks surge by 140 points "Investors are hopeful that the government might announce a removal of capital gains tax," a stock dealer said. (Reuters)
-	KSE gains 140 points, ends at 12,264 The rupee hit a record low of 86.50 last week and dealers said the local unit may face pressure in days ahead amid increased demand for dollar for import payments and a bleak outlook. (Reuters)
-	Asian stocks mixed, weak data cancel Wall St lead
-	Economic Survey: Unemployment stood at 5.5pc
-	Oil up in Asia on hopes of Greek resolution
-	Euro gains further against dollar
-	POL prices reduced "As a result of deregulation, the price of petrol went down by Rs1.70 per liter." He said now the new price of petrol will stand at Rs86.71 per liter. The price of high speed diesel will stand at Rs94.11 per liter and kerosene oil at Rs84.65 per liter.

Federal Budget on June 3

The National Budget for the Fiscal Year 2011-12, envisaging growth rate acceleration, economic stabilisation, employment generation, broadening of tax base and relief to the common people, will be presented in the National Assembly on Friday. Federal Minister for Finance, Dr Abdul Hafeez Shaikh after the approval of the Budget 2011-12 from the Federal Cabinet will announce the budget, sources in the Ministry of Finance said.

Enhancing revenues to minimise dependence on external finances, cutting down the government expenditures, enhancing growth through a new growth strategy and job creation will feature in the upcoming budget.

The consolidated outlay of the next year budget is likely to be about Rs 3.8 trillion whereas revenue target is estimated at about Rs 1.9 trillion. The budget will also address the issues of energy generation, social sector development and revenue enhancement besides major reforms will be introduced for improving governance and boost private sector investment.

Amid domestic and international challenges, the realistic GDP growth target will be 4.2 percent while in the outgoing fiscal year 2.4 percent GDP growth is likely to be achieved against the target of 4.5 percent.

The growth in FY 2011-12 will base primarily on revitalising the industrial sector by curtailing energy shortages and high interest rates that are presently discouraging the private sector from investing.

This year, the budget will also focus on infrastructure, human capital, promotion of investments and exports and agriculture sector development. Emphasis will also be made to normalise agriculture activity and maintaining good performance in services sector. The government is keen to provide relief to the people in the budget and has taken comprehensive measures to achieve this objective. The National Economic Council (NEC) has already approved a development budget of Rs 730 billion for the Public Sector Development Programme (PSDP) 2011-12 as the peoples government wants the uplift of its masses and improve their living conditions across the country.

US report urges duty-free access for Pakistan

WASHINGTON: The United States should offer duty-free access to its markets for Pakistani exports, a new report says, declaring that trade might succeed where aid has not in developing a vibrant economy and stable partner.
The report by a study group convened by the Center for Global Development, an independent think tank, was sharply critical of Washington’s attempts to stabilize Pakistan with billions in economic aid, saying they were not delivering the desired results.
“The United States is way off course in Pakistan,” said Nancy Birdsall, the center’s president and report’s lead author.
US officials and lawmakers are reviewing ties with Pakistan after the discovery of Osama bin Laden in a town about 50 km (30 miles) from the capital raised fresh doubts about Pakistan’s reliability as an ally against militancy.
But the report said US assistance to Pakistan should be mended instead of ended, with duty-free trade benefits added for at least five years to create a boost for Pakistan with “very little harm to workers in the United States.”
The proposal is a politically dicey one, however. Less sweeping proposals for increasing Pakistan’s access to US markets have foundered in Congress in the recent past.
A bill sought by President Barack Obama to offer trade advantages in border areas of Pakistan and Afghanistan stalled in the last session of Congress amid concerns about labor provisions and the impact on the US textile industry. Textile and apparel industries account for much of Pakistan’s economy.
“The American textile lobby is a very powerful special interest,” said Sallie James, a trade analyst at the Cato Institute. “There is good reason to believe that the textile lobby would launch a strong lobbying campaign to keep this (duty-free access for Pakistani goods) from going through.”
Robert Mosbacher Jr., former president of the Overseas Private Investment Corporation and a member of the group that produced the report, said Obama’s leadership is needed.
“There’s no question in my mind that they (the administration) know how important this is to Pakistan.
Pakistanis have been asking us to help them with this for years,” Mosbacher told Reuters.
Representative Chris Van Hollen, a Democrat who co-sponsored the previous bill on trade advantages for border areas of Pakistan, told Reuters he intended to try again with new legislation in Congress but the timing was uncertain.
“I’m very open to expanding the products as well as the territory” of Pakistan that would be granted duty-free status under the legislation, Van Hollen said. But the administration would probably need to work with the US textile industry to “get everyone on board.”
Problems with the US Aid Program
In 2009 Congress passed and Obama signed a law authorizing a tripling of nonmilitary assistance to Pakistan, to a total of $7.5 billion over five years. The president said economic aid to the hard-pressed country was important because extremism could not be fought “with bullets or bombs alone”.
The aid program was named after its sponsors, Senators John Kerry and Richard Lugar, and Representative Howard Berman.
But administration of the program has been neither coherent nor transparent, the report found. It was hard to find out how money had been spent, and no one person seemed in charge.
“No one is sure what the United States is trying to accomplish. Because of a debilitating lack of transparency in the aid program, no one is even sure what the United States is doing,” it said.
An official at the US Agency for International Development said Washington had given Pakistan $1.7 billion in civilian aid since the Kerry-Lugar-Berman bill was passed.
This included a program that helped save the winter wheat crop, “averting a food crisis for millions of Pakistanis after the devastating floods of 2010,” the official told Reuters, responding to the report’s criticisms.
The official said USAID had avoided a “rush to spend” in Pakistan, to assure programs are monitored. The report warned against disbursing civilian aid in a hurry.
Analyst Edward Gresser of the GlobalWorks Foundation said Congress should consider fully opening US markets to Pakistan’s exports, because current US trade policy is at odds with its aid policy.
With $350 million a year in US tariffs levied on imports from Pakistan, “Pakistan is taking it on the chin,” he said.