Petrol import from India proposed

A Pakistani policeman stands guard in front of a petrol station in Lahore on April 26, 2011. India plans to export petrol and diesel to Pakistan to help its neighbour meet its energy needs and to open up a new market for Indian refiners such as giant Reliance Industries, a report said.

ISLAMABAD: The petroleum ministry has proposed that the ‘most favoured nation’ (MFN) status be granted to India to facilitate import of petroleum products and export of cement and chemicals which would be a cost-effective proposition for both countries.

A commerce ministry official said a summary prepared by the petroleum ministry on the matter would become the basis of the two-day talks between the commerce secretaries of the two countries beginning here on Wednesday.

According to sources, the oil imports would be conditional to India facilitating export of Pakistani cement and chemicals without any barriers.

The official said the ministry had proposed the MFN status for India about two years ago and it reiterated its position this week as part of preparations for the talks.

According to the petroleum ministry, the country’s consumption of petroleum products currently stood at about 21 million tons, of which about 85 per cent was met through imports. Indigenous crude production meets only 15 per cent of the consumption, while 30 per cent crude and 55 per cent refined products are imported. The country’s total refining capacity is about 13 million tons.

The transportation of about two million tons of POL products takes place through the railway, 4.5 million tons through pipelines and about 14.5 million tons by road.

The ministry believes that Pakistan’s total diesel consumption of about 4.4 million tons can be met through imports from India where its prices are lower than in Pakistan. The price of diesel in Pakistan is Rs92.90 per litre against Rs75.56 in India (40 Indian rupees). The price of petrol in India is equivalent to Rs61.50 per litre and Rs83.55 in Pakistan.

According to the ministry, Bhatinda and Panipat have a refining capacity of about 15 million tons and two refineries of the Reliance Industries have a capacity of 40 million tons.

It has proposed that import be allowed through Wagah border by rail and road to meet diesel requirements in northern parts of the country and through sea for Karachi and adjoining areas.

The official said that since furnace oil and high speed diesel were deregulated items in Pakistan, oil marketing companies should be allowed to import the two products through open bidding.

Both diesel and furnace oil are on the positive list of importable items from India but imports do not take place because of political reasons.

The petroleum ministry has also proposed to put petrol and jet fuel, which are deficit products in Pakistan, on the positive list.

To achieve this objective, Indian companies may be allowed to participate in tenders floated by oil marketing companies.

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Food inflation must be tackled in Asia: ADB chief economist

The ADB report said food price inflation in Asia of around 10 per cent in early 2011, could pull more than 64 million people below the poverty line of $1.25 a day if sustained.

MANILA: Asia must tackle food price inflation aggressively to preserve economic gains and protect some of the world’s poorest people now that the region’s recovery has gathered strength, the Asian Development Bank’s chief economist said.

In an interview coinciding with the issuing of an ADB report, Changyong Rhee acknowledged that food price rises, if left unchecked could generate instability. But he said Asian leaders were well aware of the danger and could take action to guard against the sort of unrest gripping the Middle East.

“The reason why we are emphasizing food inflation more than the recovery aspect is that unlike the last two years, Asia’s economic recovery is on more firm ground,” he said on Tuesday evening in his office at ADB headquarters.

“And rising food prices can cause some social instability too.” He said the ADB expected global food prices, which have risen 30 per cent, to steady at these higher levels in the second half of the year.

Food accounts for a higher proportion of consumer spending in Asia, according to the ADB – 40 per cent or more in the consumer price indexes of Bangladesh, Cambodia, India, Pakistan, Philippines, and Sri Lanka – and the continent’s 3.3 billion people include two-thirds of the world’s poor.

The ADB report said food price inflation in Asia of around 10 per cent in early 2011, could pull more than 64 million people below the poverty line of $1.25 a day if sustained.

And a failure to act, the multilateral lender said, could have far-reaching consequences. “Efforts to stabilise food prices must take centre stage,” the report said. “Otherwise, the riots that are occurring in the Middle East and North Africa may spread to other parts of the world.”

The ADB said the food price rise compounded by a projected 30 per cent increase in oil prices could reduce growth by as much as 1.5 percentage points.

But oil price rises had already exceeded that in annual terms, Rhee said, and if sustained the impact on growth could therefore be higher.

Rhee said many of Asia’s poorer countries imported large amounts of food, making them among the most vulnerable to rising prices. And they had no large foreign exchange reserves or the fiscal ability to fund large assistance measures.

But he said policymakers would find a solution, even if it was not perfect. “That is why each government is really focused on short-term measures such as providing subsidy and food programmes, trying to stabilise domestic food prices and building up social safety nets,” he said.

“Given that many policymakers understand this problem, I don’t see any short-term risk of having this kind of instability in the region.”

That said, food security would be a recurring issue that needed long-term solutions such as investment, infrastructure, better productivity and crop yields.

The problem, Rhee said, was that once prices stabilised or moderated, political and media interest faded quickly. “It is very hard to agree on the international coordination once the problem becomes severe,” he said.

The challenge for policymakers is how to tackle food inflation when it is caused by factors out of their control. Bad weather can push up food prices and raising interest rates in response will not lead to lower food prices.

But for rapidly growing Asia, Rhee said monetary policy had to be tightened first. Runaway inflation was a bigger risk for the region than slower growth, especially for the poor.

“I think there is more room in Asia to mobilise monetary policy because many Asian economies, like other developed economies, relied heavily on expansionary monetary policy.”

Another potential mitigating factor, he said, could be exchange rate strength. Letting currencies rise, previously anathema to export-driven Asian economies, could help cope with inflation.

Beyond inflation and growth rates, the raw truth was surging food prices could undermine the gains made in cutting poverty and improving the lives of Asia’s poor.

A 30 per cent rise in food prices in Asia – one of three scenarios portrayed in the report – could increase poverty by 193 million people – almost six per cent of Asia’s people, or nearly the population of Brazil – the ADB’s modeling showed.

“Many who were poor before the price increases may now be on the verge of hunger and malnutrition, and those who were barely above the poverty line may have slipped back,” the ADB said.

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Police arrests gang that threatened Zulqarnain

Cricketer Zulqarnain Haider.

SIALKOT: Police on Wednesday arrested a gang of eight bookmakers, which was allegedly involved in threatening Pakistan cricket team’s wicket keeper Zulqarnain Haider, DawnNews reported.

The city police also recovered a huge cache of ammunition, telephone sets and other suspicious objects from the suspects.

SP Sialkot, Nasir Qureshi told DawnNews that the suspects were operating from a building located in the Sambrial area of the city where they had built secret rooms hidden behind wooden cupboards.

Police also recovered around 250 telephone sets, satellite transmission equipment, mobile phones and records of betting during different cricket matches, Qureshi added.

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PML-N in bid to protect PPP from `blackmail`?

The PML-N will not offer its shoulders for removal of the PPP government, said sources.

LAHORE: As a power-sharing deal between the People`s Party and the Pakistan Muslim League-Q is maturing, the PML-N has indicated that it may save the PPP-led government from “blackmail of its present and would-be allies” during the approval of the forthcoming budget.

Sources told Dawn that a message to this effect had been conveyed through a go-between from Gujrat.

A PPP leader from Gujrat had called on senior PML-N leaders here on Sunday, seeking some `serious steps` from the latter, anticipating the situation `worsening` with the PPP-Q League deal entering its final phase, the sources said.

The visitor, who had been assured of full support against the Chaudhrys of Gujrat in the next elections whether he contested from the party`s platform or as an independent, was told on Sunday that a final decision would be taken after internal consultations, especially with PML-N chief Nawaz Sharif.

The PPP leader was informed on Monday that the serious steps sought by him would soon be taken.

The government was told not to be panicky about the budget as the opposition party would extend its help through parliamentary procedure in case the MQM refused to support the finance bill. It would also not hit hard at the government within and outside parliament, the sources said.

The sources quoted the PML-N leaders as saying that the party would not offer its shoulders for removal of the PPP government.

According to a PML-N leader, not only a couple of anti-Q League PPP leaders but also some members of the trading community are playing the role of a go-between to bring closer, or at least make less hostile against each other, the PPP and the PML-N leaderships.

By lending its support to the PPP, the PML-N would be able to check the PPP-PML-Q electoral alliance, curb the chances of return of the turncoats in Punjab to the Q League and thus save its provincial government a well as “foil attempts of the intelligence agencies to establish a national government of technocrats”.

None of the senior PML-N spokesman was available for comments on the reported development.

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Military ‘indirectly’ rejects US assault on army, ISI

The Joint Chiefs of Staff Committee meeting held at Joint Staff Headquarters on Tuesday.

ISLAMABAD: In what appears to be a mild rebuke, the Joint Chiefs of Staff Committee indirectly rejected on Tuesday Washington’s critical attacks against the army’s counter-terrorism efforts and said it fully trusted the strategy for fighting militancy.

The JCSC, the country’s highest military coordination body, which meets quarterly and sets strategic direction of the armed forces, focused largely on the strained military and intelligence ties with the US, more specifically in the context of White House’s report criticising its campaign against Taliban insurgents in tribal areas and Admiral Mullen’s statement accusing the Inter-Services Intelligence (ISI) of having links with the Haqqani network.

The meeting, presided over by JCSC Chairman General Khalid Shameem Wynne, was attended by Chief of the Army Staff General Ashfaq Parvez Kayani, Chief of the Naval Staff Admiral Noman Bashir, Chief of the Air Staff Air Chief Marshal Rao Qamar Suleman, Defence Secretary Lt-Gen (retd) Ather Ali, Defence Production Secretary Lt-Gen (retd) Israr Ghumman, ISI Director General Lt-Gen Shuja Pasha, Strategic Plans Division Director General Lt-Gen (retd) Khalid Ahmed Kidwai, the director general of joint staff and senior military officers from the three services.

Admiral Mullen’s public allegations followed by reports in western media that US officials at Guantanamo Bay considered the ISI as a terrorist or a terrorist supporting entity incensed Pakistani commanders and intelligence personnel, though they did not publicly express those sentiments.

The presence of Lt-Gen Shuja Pasha, not a regular member of the committee, was a clear indication of what dominated the discussions. He is reported to have briefed the participants on his talks with CIA Director Leon Panetta during his visit to Washington for sorting out differences between the two spy agencies.

A pithy statement issued after the meeting quoted the JCSC chairman as having “expressed complete satisfaction on the operational preparedness and comprehensive strategy being followed by the armed forces to combat the terrorist threat”.

It was evident from the statement that Gen Wynne was responding to the latest White House assessment of the war effort against militants, which said Pakistan lacked a clear strategy for combating insurgency. The report also accused the Pakistani military of not being able to ‘hold and build’ areas that had been cleared of militants.

A participant of the meeting described the session as a stocktaking plenary.

Gen Kayani updated the participants about his talks with Centcom Commander Gen James Mattis, US Joint Chiefs of Staff Chairman Admiral Michael Mullen, US Chief of Army Staff Gen Dempsey and ISAF Commander Gen Petraeus on difficulties in the relationship. The meeting also discussed operations against militants in tribal areas.

At a passing-out parade of the Pakistan Military Academy last week, Gen Kayani said the backbone of militants along the border had been broken.

“The forum during the session discussed the prevailing national and regional environment and the challenges being faced by the country,” the official statement said.

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Indian delegation arrives, trade talks begin today

Prime Minister Yousuf Raza Gilani with his Indian counterpart Manmohan Singh.

ISLAMABAD: Commerce secretaries of Pakistan and India meet here on Wednesday in what has been described here as a new effort to expand bilateral trade. The talks have remained stalled since the Mumbai terrorist attacks about two years ago.

During the two-day talks, a number of issues are expected to be taken up for furthering commercial ties, an area where the Indian side has been eager to take the dialogue ahead to any extent, despite there being no progress in other areas of concern like Siachen and Kashmir.

Trade talks were part of the composite dialogue that was launched seven years ago for restoring normal relations between the two countries.

An official in the commerce ministry told Dawn on Tuesday that although Pakistan had no specific agenda for the meeting it would raise the issue of Indian obstruction to approval of the European Union trade package at the Geneva-based WTO.

Indian Commerce Secretary Rahul Khullar arrived here on Tuesday at the head of a six-member delegation which will be assisted by the Indian high commissioner, deputy head of mission and commercial consul. It is learnt that Pakistan will press for an end to the Indian opposition to the EU package which will be taken up for consideration early next month at the WTO.

The Indian government has blocked the passage of a waiver from WTO members for implementation of the package to help flood-affected people in Pakistan.

Sources said that Pakistan could offer to consider more items of Indian interest in the positive trade list.

The Indian delegation was expected to hand over a list of items to the Pakistani side, the source added.

Pakistan unilaterally expanded the positive list in February, setting the stage for full resumption of trade talks. The items on the positive list, 1,946 goods, can be traded between the two countries.

According to official figures, Pakistan added 42 items to the list during 1979 to 1986, 249 items in 1988-89, 328 in 1989-2000, 14 in 1998-99, six in 2000-01, 10 in 2001-02, 78 in 2002-03, 80 in 2004-05, sugar cement and oats in 2005-06 and 438 products in 2008.

The list of tradable products with India had 591 items in 1997 and the number increased to 1,938 in 2008.

This means that the country has diverted its potential global trade of over $5 billion towards India by including new importable items in the positive list.

However, the opportunity was not used effectively because of tension between the two countries in the wake of the Mumbai attacks.

The Indian government has already offered to export electricity and petroleum products to Pakistan. “This offer will be discussed at length at the meeting,” an official said.

The Indian delegation may raise the issue of most-favoured nation (MFN) status with Pakistan’s top tax officials. India accorded the MFN status to Pakistan in 1996.

This is unlikely to be a crucial issue because the balance of trade is heavily tilted in favour of India. Pakistan’s exports to India are worth $270 million and imports $1.2 billion.

But informal trade flows between the two countries through third countries like the UAE run into billions of dollars.

Another official said Pakistan had not benefited from the composite dialogue negotiations as its exports were still facing numerous barriers in the Indian market.

Some businessmen recently voiced their concern over Indian buyers’ reluctance to buy products from Pakistan after the Mumbai attacks. “Some people are issuing statements equating buying any products from Pakistan to sponsoring terrorism in India,” an Islamabad-based businessman said. How could a Pakistani exporter get contracts from Indian buyers in the environment created by such baseless allegations, he asked.

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Nato kills 'number two most-wanted' in Afghanistan

KABUL: Nato troops in Afghanistan said Tuesday they had killed a Saudi described as an "Al-Qaeda senior leader" who was their number two most-wanted insurgent in the country. The US-led International Security Assistance Force (Isaf) said Abu Hafs al-Najdi, also known as Abdul Ghani, was killed in an air strike in Kunar province, eastern Afghanistan, on April 13. ISAF said he was responsible for coordinating "numerous high-profile attacks". But spokesman Major Michael Johnson said he could not give details on the attacks for "safety and security reasons" and could not say who was number one on the most wanted list because of legal issues. The Saudi interior ministry website lists a man named Saleh Nayef Eid al-Makhlafi, with the nicknames Abu Hafs, Abu Hafs al-Najdi and Abdul Ghani, as one of its 85 most-wanted. ISAF said he "operated primarily from Kunar, which borders Pakistan and is the scene of some of the country's heaviest fighting, and travelled frequently between Afghanistan and Pakistan". It added that the man had "directed Al-Qaeda operations in the province, including recruiting, training and employing fighters, obtaining weapons and equipment, organizing al-Qaeda finances, and planning attacks against Afghan and coalition forces". He is accused of directing a suicide attack which killed a pro-Kabul tribal elder in Kunar plus nine other people on the morning of his death, plus other unspecified attacks on international and Afghan security forces and officials. A Wall Street Journal report earlier this month said that Al-Qaeda militants were returning to eastern Afghanistan and setting up bases for the first time in years as troops pulled back from some remote outposts. But the Nato-led force in Afghanistan has denied this, although it said in Tuesday's statement that coalition forces in the country had killed more than 25 Al-Qaeda leaders and fighters in the last month.

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