Economic Performance in 2006-2007



http://www.dawn.com/2007/06/09/top1.htm




By Khaleeq Kiani

ISLAMABAD, June 8: A record wheat output of 23.5 million tons and a robust agriculture sector enabled the economy to post a growth rate of seven per cent during 2006-07, according to the Economic Survey launched here on Friday.

Shortfalls in manufacturing and cotton output targets, however, took some of the gloss off an otherwise encouraging performance, the survey said.

The Adviser to the Prime Minister on Finance, Dr Salman Shah, dwelt on the salient aspects of the Economic Survey at a press conference.

He said the economy achieved ‘history’s second largest sugarcane production’, ‘history’s biggest investment-to-GDP at 22 per cent’ and ‘history’s biggest foreign investment of six billion dollars’.

The adviser said the international community had expressed confidence in Pakistan’s economy by subscribing over three billion dollars as against $500 million sought at the recent Eurobond floatation.

Dr Salman said that instead of $500 million, the government decided to accept bids for $750 million at an interest rate of 6.875 per cent — only two per cent above the US treasury bonds interest rate.

The real gross domestic product (GDP) growth rate at 7.0 per cent — on budgeted target — shown in the Economic Survey and confirmed by the adviser is slightly lower than 7.02 per cent announced by the Prime Minister last week after a meeting of the National Accounts Committee. It was, however, better than last year’s 6.6 per cent growth rate. It is evident from the survey data that growth was based on domestic consumptions rather than export growth.

The survey conceded that despite impressive gains, there were areas “where results could not be achieved as planned”. Inflation at 7.9 per cent was much higher than 6.5 per cent target because of shortfalls in domestic production of pulses, rice, chillies, onion and tomatoes and fruits that led food inflation above 10 per cent against last year’s 7.0 per cent.

Growing at about 8.0 per cent — much better than target of 7.1 per cent — the services sector contributed almost 60 per cent (4.2 percentage points) to this year’s economic growth and covered up for sluggish industrial performance. It was, however, lower than last year’s impressive 9.6 per cent growth. All the components of services sector registered strong growth except in ownership of dwellings.

Manufacturing, having 19 per cent share in the GDP, grew at 8.4 per cent against 10 per cent last year and budgeted target of 11 per cent. Large-scale manufacturing, accounting for about 70 per cent of overall manufacturing, recorded 8.8 per cent growth rate against the target of 12.5 per cent and last year’s achievement of 10.7 per cent. The survey attributes this shortfall to lower capacity utilization, difficulties in textile sector, stagnant cotton production and lacklustre performance by vegetable ghee/cooking oil and automobile sectors.

On the external front, while import growth slowed to a normal level from 29 per cent average growth in last four years, “export growth witnessed abrupt and sharp deceleration to less than 4.0 per cent” after growing at 16 per cent last year. Therefore, the benefits of normal growth of imports could not be achieved in terms of improving trade and current account deficits. The economic survey also said that consumption inequality has marginally increased during the period 2001-05. Dr Shah said 2006-07 was another year of “strong growth performance” despite shortfalls in manufacturing and major inflationary shocks contributed by international prices on the back of higher use of cooking oil to bio-fuels and domestic supply problems.

The agriculture sector that made a modest recovery from the dismal performance of last year grew by five per cent. Wheat production at 23.5 million tonnes was highest in Pakistan’s history, up by 10.5 per cent besides strong recovery by major crops growing at 7.6 per cent against last year’s negative growth of 4.1 per cent. Cotton production at 13 million bales remained static at previous level.

Livestock that grew by 4.3 per cent was way behind last year’s strong growth of 7.5 per cent. Minor crops grew by only 1.1 per cent this year as against equally poor performance last year.

The survey once again confirmed that services sector growth was mainly boosted by growth in the banking and insurance sector by registering 18.2 per cent through a large gap between higher interest rates and low return on deposits but was lower than last year’s 33 per cent. Value-addition in the wholesale and retail trade sector increased by 7.1 per cent against 8.6 per cent last year. Value-addition in transport, storage and communication sector grew by 5.7 per cent, far less than 6.9 per cent last year.

PER CAPITA REAL GDP: Per capita income in dollar terms registered an increase of 11 per cent, rising from $833 to $925 but was short of $935 target and lower than last year’s 14.1 per cent growth.

FOREIGN DIRECT INVESTMENT: The country attracted $6 billion of FDI against $4 billion during the same period last year, showing an increase of almost 48 per cent. As percentage of GDP, total investment reached 23 per cent this year, increasing from 21.7 per cent last year. Nearly 80 per cent of FDI has come into IT & telecom, banking and financial services, energy sector and food and beverages.

INVESTMENT: Fixed income has increased to 21.4 per cent of GDP from 20.1 per cent last year. Private sector investment grew by 20.4 per cent this year against 37.5 per cent increase in last year in nominal terms.

NATIONAL SAVINGS: National savings, which stood at 18 per cent of GDP against 17.2 per cent last year, have financed 84 per cent of fixed investment as against 85.5 per cent last year.

REMITTANCES: Workers’ remittances totalled $4.5 billion in ten months of the current year as against $3.6 billion in the same period last year, showing an increase of 22.6 per cent.

TRADE DEFICIT: The merchandize trade deficit widened to $11.1 billion in first 10 months of the current year as against $9.5 billion in the same period last year. Exports in 10 months of the year rose by a meagre 3.4 per cent to $13.9 billion while imports grew by 8.9 per cent, rising from $22.9 billion to $25 billion against last year’s increase of 40.4 per cent.

CURRENT ACCOUNT DEFICIT: The current account deficit, excluding official transfers, stood at $6.2 billion (4.3 per cent of GDP) in first 10 months of the year against just $4.6 billion of last year.

PUBLIC DEBT: The public debt to GDP ratio, which was 85 per cent in 1999-2000, declined from 56.9 to 53.4 per cent in 2006-07 — almost 3.5 percentage point reduction in debt burden.

Ok, based on inflows of the fiscal year 2006.
FDI is mothers' milk for the nascent and emerging economies.

Given the size and dynamism of Pakistan's economy, a liberal FDI policy of the current regime, the cheap labour force and its proximity to the markets of gulf and central Asia, Pakistan should be seen as a far more attractive destination for foreign investment. Pakistan was among the first few countries in the region to open up the market in the early nineties. The foreign investors can virtually invest in any sector except a very few.

Another distinctive characteristic of the FDI inflow in Pakistan is that foreign investors are not injecting money to establish new projects. They are buying ready-made organisations and institutions. The government is attracting FDI mainly by selling national strategic assets with a "vegetable-vending approach". The nation makes a cake then the government sells it to foreigners on the "Sale Price" (discounted price). In our case the FDI is devoid of the very basic purpose of employment generation, because foreign investors are not establishing new projects to create job opportunities for the unemployed class.

Moreover foreign investors are busy in 'down-sizing' and 'right-sizing' policies on the sweet will of International Financial Institutions (IFIs). In our case, the FDI is also not broad-based, meaning thereby, that it is more or less restricted to three sectors, namely the telecom, oil and gas and the financial sector. More ridiculous is that foreign investors are borrowing money from Pakistani banks to acquire the organisation in our country.

A very straightforward question is that these organisations and institutions are few in number so how long can this loot-sale of strategic institutions prolong? The foreign direct investment (FDI), that is considered as a catalyst for economic growth, has always been a pressing need of the capital-deficient economies of the developing world.

First, equity financing requires payments only when investment earns a profit, while debt requires payment irrespective of return. Second, payment on FDI can be regulated by the host country, while debt payments are out of its control. Third, much of the FDI consists of re-invested earnings, not all returns are repatriated, as opposed to loans.

The fallout and after-effects of FDI have been debateable from the day one in economic circles. One view is that foreign firms invest abroad in order to capitalise on some specific expertise or technology that domestic firms do not possess.

The cost of capital explanation theory, however, suggests that the main enthusiasm for FDI is the movement of resources in search of maximum return. FDI is also seen as a means to extend capitalistic control rather than as a means to shift resources from one country to other. In case of Pakistan, trans-nationals invest in order to consolidate a large foreign market that is always an integral part of their corporate strategy.

The economic fundamentals of the country have changed considerably but lack of good governance, high cost of doing business, red-tapism, cold war with India, political uncertainty, inadequate and under-developed infrastructure, poor law and order situation, rampant corruption and deep-rooted smuggling are real threats.

A stable and peaceful political and economic environment, enforcement of laws and contracts, a trained, skilled and disciplined labour force, critical support services and availability of quality infrastructure are key factors for potential investors in making investment choices.

Pakistan should bring economic stability through stable exchange rates, adequate foreign exchange reserves, price stability, favourable and fair return on investment, and also restore political stability through national consensus, by turning away from personal motivations in the larger interest of the nation.

Shehz,

One observation here. You are saying FDI is not generating Jobs and is being used to buy our "cakes" at sell out prices.

The biggest component of FDI if i am not wrong has been in Telecom industry. The infrastructure was non-existant and it has added that for us. Brought people under coverage and generated huge number of jobs.

One bad cake was KESC itself that has been sold and should have been since it's no cake itself. Also PSM was blocked by court and the cake is still with the people of Pakistan.

Ok, PSM, it was an old entity, sale or privatization will not make an iota of difference.
KESC, again same, as it's restricted to Karachi, and Karachi only.
Actually it has done more good, as mass trading of generators began, not only boosting KSE, but starting a new manufacturing field, generators, including imported CKD's.
Manufacturing alone decreases unemployment rate.

Telecom has been there since ages, only corruption has been curtailed, and lines/connection are more easily accessible to the common man, giving birth to Fibre Optics Technology (in Karachi), and more skilled based employment.

If you want to compare, than compare an entire industry, all over Pakistan, not just one entity in one given city. Let's take Mir's favourite topic, agriculture and Sugar Mills (Ab dekhna yeh kesey is thread mey aata hai);
Accumulation of large unsold sugar stocks lying with the mills, if not lifted early, will not only render the mills unable to pay to the growers, but will also reduce the collection of taxes from this sector.

The crisis, the millowners have warned, will delay the crushing season by three months, i.e., from November 2007 to January 2008, because of non-enforcement of ex-factory price of sugar @ Rs 31 per kg inclusive of sales tax and retail price of Rs 34 per kg., most of the mills have sustained massive losses, as the current selling price of sugar is below its production cost.

the present situation does seem to have strong parallels in the 2003-04 sugar crisis when the growers had produced 53 million tonnes of sugarcane from which four million tonnes of sugar was produced.
With the addition of 0.5 million tonnes of carryover stocks from the previous season and against the annual domestic demand of 3.5 million tonnes, there was a surplus of about one million tonnes. This had led to a decline in the sugar prices from Rs 21 per kg to Rs 19 per kg, prompting PSMA to request the Finance Ministry for a bailout. And the government had agreed to buy about 0.5 million tonnes of sugar from the mills through TCP, and refused to make full payment to the growers. When the next season came around the growers decided to reduce the production of sugarcane and instead divert their resources to less troublesome crops. As a result in 2004-05 forty-seven million tonnes of sugarcane was produced, ie over 11 percent less than in the previous year.

PSMA has this year again suggested that the government buy 0.3 million tonnes of sugar through TCP to build up buffer stocks and offload it in the open market whenever sugar prices cross the ex-mill limit of Rs 31 per kg. According to available data, there are at present 79 sugar mills in the country out of which 73 are operating at the existing annual production capacity of 5.3 million tonnes. The quantum of sugar production obviously depends on the size of the sugarcane crop, which has tended to display an erratic course over the years.

Shehz,

yaar i was talking about FDI and it's effect on job creation. In telecom our landline system hasn't shown anything o write home about but mobile operations have exploded and even the fiber optic systems are being laid down by these same companies if i m not wrong. In terms of job creation it encomapsses alot people not just the professionals who operate. If i am not wrong brecorder mentioned salesmen, low level technical and support staff to your more tech intensive jobs were all created as a result.

Two sectors have benifited majorly from FDI, one is Communication and other is Banking, now we have to see what makes the economic progress, we need to have a good communication infrastructure and a strong banking system, these two are basis of any economy.

It was non existant as you said, we have nationalised banks which used to make credits on political grounds and right off these bad loans and second was our communication infrastructure, calling another city was difficult then travelling all the way.

No what have happened this FDI has developed the basis of ecomomic activity, right from technical, sales, services and even PCO's it have created a lots of jobs and made communication easier, on other hand with strong and pritavised banking system more financing have poured whith have give a life to our manufecturing industry as more people have got buying power our local industry is working 24 hours but can not meet the demand, and every one is expanding that have created more jobs.


One thing we have to be clear that this is beganing of economic activity, once there is demand and infrastructure more FDI will come to production sector and we have seen 50% increase in first ten months this year.

It would not be proper to say that FDI did not went to right place, actually next we will need better roads, better transportation, more air routes and that all would pump more money in society with more people buying and still we can expect rise in inflation, but when there is too much gap in supply and demand every investor wants to have a bite in profits and thats stage when proper industrialisation starts.

I did confirm about the telecom, fiber optics, and skilled labour, I did not deny that.
Talking about mobile operators, they are more or less the same, take overs, mergers, the main players being Mobilink, PTCL, Instaphone, and now Paktel being taken over by a Chinese firm. Ownerships have changed, the players are the same.

On the contrary, PTCL want's to control everything, hiking up registration and license fees, garuntees, etc., not looking at the bigger picture. India has limits to foregn investments (majority share holding issue) and Pakistan has red-tapism, who does it really hurt?

The State Bank of Pakistan's Third Quarterly Report for FY07 has been issued. Objectives of the FY07 scheme and the objectives it would aim to achieve in FY08, as the country moves forward, But the most important question that needs to be answered is, how to justify the widening gap between the kitty and the burgeoning expenditure which would be incurred to appease the electorate who do not understand what the gap between the two means to them in terms of their purchasing power.

Going by the picture presented in the SBP Report, the real GDP growth is expected to exceed even the projected 7.0 percent for the year, besides being broad based. FY07 would thus become the fourth year in succession to have seen high economic growth, but a painful trade-off had to be accepted: the process of accelerating growth totally marred the prospect of achieving the coveted objective of decelerating inflation to 6.5 percent by the end of the year. Tight monetary policy helped maintain a rather complex balance between decelerating inflation and maintaining growth momentum by 'removing excessive monetary stimulus from the economy', leaving aside the food inflation which increased incessantly in the later part of the year.

The apparently tight monetary policy in one way or the other yielded to the accommodative stance emanating from the government side. The result was that by May 12, the growth in broad money clearly surpassed the growth recorded last year by nearly 2 percent or Rs 120 billion.

High inflation remains the major discomforting factor and appears to be the result of unfettered profiteering and hoarding by market manipulators, on which the government has moved rather sluggishly to take any effective steps. The market can indeed go its way but the governments are bound to take prudent measures to correct the situation.

The growth recorded during FY07 up to May 12 worked out to over 20.12 percent compared with 14.65 percent recorded in the corresponding period of FY06. Concessional credit provided by the central bank to a number of export oriented sectors and target beating government budgetary borrowings from the banking system (Rs 212 billion as on May 12 compared with the target of Rs 120 billion) can be regarded as the contributing factors to the growth.

To conclude, the SBP Report sees that real GDP growth would comfortably reach the target of 7.0 percent in FY07 or may even exceed it. However, domestic inflation is forecast to remain in a relatively higher range than expected earlier.

Thanks both you guys.

Mir,
It's funny you mentioned Telcom and banking as the growth driving areas, because even a novice like me have been wondering looking at news that how these two areas standout from others.

Shehz,
"High inflation remains the major discomforting factor and appears to be the result of unfettered profiteering and hoarding by market manipulators, on which the government has moved rather sluggishly to take any effective steps. The market can indeed go its way but the governments are bound to take prudent measures to correct the situation"

Bingo! it seems govt is following a true westernized more macro oriented executive economic policy. Or in other words that they are acting as facilitators creating right policies and conditions and concentrating on the planning and larger vision of things.

Perhaps thats an unconcious effect of having Shaukat Aziz a former business executive as our lead economic visionary. I dont disagree with the concept either and it has worked fine for past 7-8 years.

But perhaps to translate gains into trickle down effect for pover you need a more bottom up approach. CBR has been very efficient at revenue generation and have gotten their hands dirty. It's time we see more discipline micro level control over hoarders ,middleman and manipulators. Just look how blanantly these morons booked export orders and created the shortage even with a bumper wheat crop!!

Looks like ths is about to change though. Read that a board will be constituted for oversight of agriculture products their export and local consumption. Also by going for massive expansion of utility stores govt will have more leverage at price control at UNION Council level.

Hopefully this is not just one year election year approach and continues on.

LOL

I did not say these are growth driving sectors, these are basic infrastructure for any economy, you need to look at wider picture, only two sectors are considered to be growth driving, forst is housing and second is the public infrastructure, a housing or infrastructure project like road reduces poverty 7 times more then the dirct finance to eliminate poverty (this is world bank's study).

What I was saying is that we have crossed first hurdle, next is housing and public infrastructure, now from where the raw meterail will come?

This is where your industrialisation starts, you look at USA, China, Malaysia.........three different models have this thing as common, the real development starts when your housing and public infrastructure sections are at peak and thats time of industrialisation.


Dont try to climb a tree, we have to follow the gravety rules.

I guess u didn't get what i was saying. By growth driving i didn't mean the sectors which are universally accepted as main drivers of growth but looking at our own growth history these two sectors have been very solid performers.

While i would agree about infrastructure and govt seems to be in total agreement with you here. I think the Achille's heel will prove to be energy. It's gonna get alot worse before it gets better. They are already pointing at for LSM's lackluster performance and indirectly for exports.

Why a Monetary and Fiscal Policies Coordination Board was created by amending the SBP Act if it was doomed to failures in achieving the desired coordination between the two policies? It indeed infringes the autonomy of the central bank, besides creating the impression that the two policies had in fact been moving in opposite directions, which reflected the inability of policy makers to co-ordinate prudently as opposed to imprudently.

SBP Report has described the government's borrowings as a rather 'worrying dependence' especially when fiscal deficit has been capped to stay at 4.2 percent of GDP by the end of current fiscal year.

The other end connotes two important players, the Finance Division and the CBR. At the Finance Division end, the Public Sector Development Expenditure continued inflating, with excuses like justification of growth momentum, which cannot be attained under the obtaining power crisis, awfully neglected infrastructure and lack of social sector facilities. If these odds were removed, it could lead to creation of additional employment and hence moderation of existing poverty levels.

At the CBR end, loopholes in the country's taxation system took their toll and what could have been available for financing part of the increasing PSDP went into fuelling inflation. When are we going to tax the windfall money earned by the real estate and stock market sectors which also entail a damaging effect on the ruling land prices?

International capital flows could be volatile, hence problematic. The long run health of the economy, therefore, requires a lower sustainable current account deficit, concurrent with a rise in the domestic savings rate and a gradual reduction in the fiscal deficit through increase in the tax-to-GDP ratio.

Look, I did a google on Pakistan's FDI and other economy issues, out of the hundreds of link, 2 links come up as well, Ma-Shall-Allah!

What Pakistan need is the manufacturing sector, we have the raw material and we export it most of the time. It is not a smart thing to keep selling raw material, we should be producing finished products and then exporting them, this is where the real money is.

Why do you think china is doing so well against the western companies and having a great competitive economy, the answer is fast and quality manufacturing?

We are still a agriculture nation and we have not move forward enough to be a industrial nation. It is amazes me that just sectors are being the growing factors in economy?

GM’ alone has bigger budget than Spain’s economy. In USA, There used to be a one company called Bell, and then they broke it into many small companies, made them public and now you will see mega joint telecom companies like AT&T, BellSouth, Sprint etc. We have come long way, but still has a lot of learning to do. Like, PTCL went public and it did help the economy and the people, it created the competition, but we did not break the PTCL in small companies so we could have created more price wars, aggressive marketing and more jobs.

There are other white elephants in our economy, if we make them public; it is only going to help the people of Pakistan. Those sectors will be Wapada, PIA, Railways etc. it would dramatically change the entire picture of Pakistan’s economy. We need more liberal economic policies.

Coming to the real state, I can predict that safely that this entire real state thing going on in Pakistan is being done very stupidly. Real state, housing plays back bone role in developed countries economy. Look at the USA economy, real state can play major role in slowing down and speeding up the economy. Right now the Feds and economists are worried about the slowing trend of US economy. The way things are being done in Pakistan is just pumping the air in the Bubble and it is only going to grow so much and then it will burst. There is no checks and balances involved, there is no planning and there is no control over the whole thing, it is like monkies playing with fire and it is just a matter of time they will set the entire jungle on fire. There are no credit ratings in Pakistan, no solid bank system and the same is going to happen as the Mexico in the 90s. Economy has not as crucial thing to people in Pakistan as it is to the other parts of world, In the other parts of the world, economics becomes more important than the politics and their interests. As we have seen in the last few month, how this CJ issues has been dragging on without any sense or thought that how is might effect our economy. This is scary stuff, any investor would think millions time before investing there.

Pakistan's economy is growing, and with this growth comes higher energy consumption and stronger pressures on the country's energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on imports that places considerable strain on the country's financial position. On the other hand, hydropower and coal are perhaps underutilized today, as Pakistan has ample potential supplies of both.

Over the next 20 years, the country's overall demand for energy will increase by 350 percent. During this period, the percentage of Pakistan's total energy needs met from indigenous sources will fall from 72 to 38 percent.

Not to mention, we have not invested at all in alternative resources at all. In the mean while, other counteries are heavily investing in alternative energy resources such as Ethanol, Wind, Solor, Nuclear, fuel cell etc and it exposes the backwordness of our people who are jumping on the bandwagon and just investing in the luxuries only. Basicaly, what is happening is that we are investing the money in the villas, banglos, cars etc and all this investment generates a negative cash flow, this also makes our economy's growth as negative growth not the postive one.

Our services sector is so small.

Honoestly i am not satisfied by the performance of our economy. All the important sectors are being ignored.

Psychosaint, in Pakistan, real estate (Villa's/Banglows/Prime-Land) are not documented as such that CBR can monitor sale and transfers, hence we loose out on a major chunk of taxable income, even value added and property taxes.

Your other dissatisfaction, the services sector, is good, but again, they are not registered tax payers.
Said that, feudalism plays a strong part in politics, and the agricultural sector is not in the tax net either.

Even though FDI's enhance yearly, it is converted into Rupees, and that huge transfer alone, no doubt is increasing Forex Reserves, but alternatively increasing inflation, which will put a stop to the poor class in joining the middle class segment, which is very vital to the growth of an economy.

Moving on, energy; Pakistan has sought foreign direct investment (FDI) for its oil and gas sector, project financing for major gas pipelines and technical assistance to ensure its energy security.
To maintain a 6 - 8 % GDP growth rate in the next five years, Pakistan will face acute energy shortages by 2010-2012. The country requires 55.5 million tons of oil and petroleum products each year and rising oil prices in the international market are draining Pakistan's foreign exchange reserves. This year the oil import bill is expected to reach USD 6.5 billion against last year’s USD 4.6 billion.

The government is currently pursuing a strategy of increasing oil, gas and coal exploration and production activities, developing more hydropower, increasing the share of coal and alternative energy in the energy mix, promoting private sector investment and developing regional cooperation and strategic partnership. As part of its efforts to step up hydropower, Pakistan is constructing five big dams, which will require USD 18.45 billion by 2016. The country requires an overall investment of USD 25 billion in the next 10 years for agriculture and generating electricity.

Pakistan is involved with Iran-Pakistan Gas Pipeline, and as per MOU's signed, China will support oil and gas exploration in Pakistan, and help Pakistan develop its coal and lignite as well as renewable energy resources.

Seriously i am thinking about investing and introducing the Bio-desel like technonolgies in pakistan if someone has not already done it. The only thing stoping me is the situation and political stuff going on in pakistan.

The point is shehz that i am not a big fan of Taxation, but if it can be done intelligently and keeping in mind that common intrest of community then it can be benificial and the heavy taxations can be avoided.

For Example, In The USA, Every city collects the Tax from the house owners and then they invest that money in the local schools, police, inferastructure etc. This benifits the community and it also help the value of the real state to grow, people get more sense of privacy and private property.

look at the other side of the picture in pakistan, No Taxes, Everybody wants government to do everything, but no one wants to pay a dime. it is bloody stupid, the result, there is no sense of private property, no awareness of security, self responsibility and no value of education. inferastructure stays poor. This all comes to bite us in the neck and we stay poor while the world advances.

I am not a optimist, but i like the self criticism and i want pakistan to grow by nights and bounds.

In future, i want to go back to my country. Take up on teaching and start teaching my people these ideas. I owe this to pakistan, That land has given me so much that i cant pay that even with all the blood in my body and flesh on my bones.

Psycho,

Your point regarding renewable energy is bang on target. Pakistan needs to take lead in this. Lets decentralize our grid. With commercial producs in market for backup power running on thin film solar technology and the same being used for illuminating villages far away from grid. Combine that with thousands of micro hydals in NWFP and punjab and you have your answer to power shortage problem.

So thats how i envisage it.
1)Solar, Wind and perhaps Ocean wave for energy and deslination (both brackish and sea water) for the Sindh Baluchistan area.
2)Nuclear for energy and desalination (already a pilot project in Kanup) in Sindh.
3)Micro Hydals and Solar in Punjab and NWFP.
4)Nuclear for energy and desalination in Punjab. (Khushab II, Chashma)
5) Mega Hydals in NWFP already in progress.

Thats i would say almost 70 percent of our eenrgy needs right there. Then we should go after Natural Gas from Iran and you can say a nice little farewell to Petroleum

The house i am going to move into is totaly running off the solar energy.

Now look at the great example of the government encouraging people to stand up on their own feet. Here in USA if your house is running off energy and if you have spare electricity after house use, the local power company will buy this from you and pay you for it.

now think about it, how it helps the society, economy and envoirnment. the money i am going to get if i have excessive electricity, it will be going into my savings and it will directly help the economy, the more savings people have they more they will invest.

GOP should encourage such policies instead of tangling itself into political mess to pass and make everything.

Political solutions are not the solutions of every problem, but the invidual responsibility can solve all the problems.

We need to invest into the alternative energy resources NOW, if we want to gain any benifits of it 10 years later.

the future wars will be fought over water, we must perpare now!

Psycho they have already formulated a very good plan that also envisages this buy back. It's a very detailed plan and could be found on the site of Alternative Energy Development Board.

http://www.aedb.org/PakistanREDevelopmentP...nalFormatte.pdf

But looks like right now it's not the top most priority what it should be. They are trying do 10 percent of total mix by 2015 with renewable sources. I think it should be made the top most priority on the contrary.There should be top bottom approach with mega projects of regular nature (fossil fuel, mega hydal, nuclear) and bottom up with solar leading from front.

http://www.elements.nb.ca/theme/energy/micro/micro.htm

here is very good article.

this technology can be very effective in north pakistan where we have streams, falls and this kind of tech can create revolution. cheap, affordable renewable power source

http://www.microhydropower.com/

salam

well yar masla ye nahi hai kai hamaray pas RAW material hai ya nahi ..masla ye hai kai hamaray pass leaders koi b achay nahi aaye .. who will make dese projects work yar ..America is spending millions of $$ on alternatives of power for example wind and all..Pakistan need R & D sector badly ..we have talented ppl and manpower needed for dese things but the problem which arises da resources ..corruption is a leech we cant get rrid of ..wht the hell cud we do anything abt dem .. ? Pakistan GOT coal researves who is usuing dem? pakistan got agriculture land who is using dem ..who is benefiting frm dem..dese ppl like gnaja BB and busharaff cud do nothin all r worthless...

Wasalam

All sugur mills in pakistan are producing Ethanol from sugur bi products, but no one has started Bio Diesel as yet, Malaysia is producing Bio Diesel but USA has started a big time campaign against Malaysian bio diesel alledging that malaysia is cutting its forests for palm plantations.

This who thing is political joke rather then practical, Bush waned to make enviornmentalists happy and he gave Billions to the big guys running these companies.

Just tell me one simple thing, when half of the world is suffering from extreme hunger, how much possible it is to make Bio Diesel from food items and run your car on it which can save lives of starving people?

Anyway the best way to get cheap energy is Hydro power and have minimum costs, even solar will csot you 9-13 cents per unit which is more expensive then coal, the only way to have sufficient power on cheap rates will be building dam's.

Mir,
Solar is coming of age with thin film technology.
http://peswiki.com/index.php/Directory:Viv...thin_film_solar

This pays itself off in 2 years and have operational life of 20 years. The problem would be startup costs where govt comes in.

There are a few small power projects that will come into the fold in 2007.
- Malakand-lll (81MW)
- Pehur (18MW)
- Faisalabad (450MW)
- Mangla Dam raising project (150 MW) - Likely to be delayed till 2008

2008
- Khan Khwar (72MW)
- Allai Khwar (121MW)
- Duber Khwar (130MW)
- Kayal Khwar (130MW)
- Golan Gol (106MW)
- Jinnah (96MW)
- Attock Gen Power Project (150MW)
- Gulf Power (179MW)
- Taiyo Hills Emenanabad (127MW)
- Eastern Power (EPCO) Pasrur (150MW)
- Associated Technologies Limited/Savara/Tecna (750MW)
- Orient Power Project (Phase 1) Balloki (225MW)

2009
- Fauji Mari Power Project Daharki (175MW)
- Green Power Project (Phase 1) Dadu, Sindh (205MW)
- Engro Power Project Daharki (150MW)
- Nuclear power Chashma (325MW)
- Bhikki Power Project Bhikki, Punjab (225MW)
- Muridke (Sapphire) Power Project Murodke (225MW)
- Sahiwal (Saif) Power Project Sahiwal (225MW)
- Westren Electric Power Project Dadu, Sindh (150MW)

2010
- New Bong Escape Hydel Project Near Mangla, (84MW)
- Rajdhani Hydro Power Project Mangla,AJK (132MW)
- Fauji Korangi Power Project Dadu, Sindh (150MW)
- Faisalabad ICB Project Faisalabad (400MW)

More details here. Most projects are IPPs.

Atleast that was the plan envisaged in 2004. Some projects need to be implemented on a war footing.

Its high time some R&D flows into solar and wind energy which is in abundance. Especially along the coastlines of Sindh and Balochistan. Far remote villages need not be connected with the national grid and should be able to produce electricity on their own using wind and solar panels.

^^

Good link there. Good to know that the max number still goes to hydal(20 projects). But oil is still a sticky customer with 14 projects. There have been already some set backs (a chinese company backed out of a Coal project). Govt is interested more in Coal than anything else. I see where they are coming from since huge reserves have been found specially in Sindh, but it's short sightedness IMHO.

P.S: the plan for wind farms is under implementation now (jhirik??)Came across this link from Pakistan Meterological department and was good to know those guys are doing some productive stuff finding wind data at differnt places for wind farm viability.

http://www.met.gov.pk/Projects/updates.html

Very good discussion going on....am enjoying reading this.

Key issues of a sustaining economy is energy and the shortage of it.