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SCMP Reporter

CHANGES in Pakistan have led to a period of growth in many sectors of commerce and industry. From the plan to treble steel production at the state-run Pakistan Steel plant and double output from the country's oldest fertiliser-maker, to completing a project to lay 2,550 kilometres of optic-fibre telecommunications cables and new incentives to foreign investors, Pakistan has pushed to turn its fortunes around.

  The steel plant announced its expansion plans after making a profit for the first time in 10 years.

  Company chairman Lieutenant-General Sabih Qamaruzzaman said Pakistan Steel hoped to boost the whole nation's economy.

  The industrial complex near Karachi aimed to raise its annual output to three million tonnes from the 1.1 million it now produced.

  It would do this by setting up an additional US$1 billion plant through credit raised locally and overseas.

  More than 23,000 people are employed by Pakistan Steel, which announced a profit equivalent to HK$21 million in the first half of this fiscal year.

  Last year, it made a HK$190 million loss.

  The Engro Chemical Pakistan fertiliser plant is another success story.

  Engro, the country's oldest fertiliser-maker, has doubled production at the facility since taking it over from Exxon Chemical two years ago.

   The decision by the United States' company to pull out of fertiliser production worldwide was a shock.

  Engro then made Pakistan's first employee buy-out.

   Talks between the owners and employees were handled by the International Finance Corp.

  Today, business is booming.

  But despite Engro's output, Pakistan still needs to import urea.

  Its agricultural-based economy needs a further 600,000 tonnes from overseas to make up for the shortfall on its 2.1 million-tonne production last year.

   The country's telecommunications system continues to improve.

  The 2,550-kilometres of optic fibre went into operation late last year to link subscribers from Islamabad to Karachi.

   The HK$350-million project was financed by the World Bank. It was jointly implemented in 18 months by Australian firms Telecom Australia International, which is now called Telstra, and Olex Ltd.

  In other developments aimed at benefiting the economy, Pakistan this year initiated a package of tax holidays and other incentives to encourage foreign investment.

  Exchange and bureaucratic controls have been tightened: one initiative has been to remove the restriction on domestic borrowing for fixed investments by foreign companies.

  The government also privatised and deregulated inefficient public sector enterprises to reduce the drain on state resources.

  This allowed it to concentrate on developing infrastructure and improving social services.

    Cotton exports have been deregulated. Hong Kong is a big buyer of Pakistan cotton.

  Wholly-owned foreign companies are encouraged to operate in Pakistan.

  All these moves have already benefited the Pakistani economy: the gross domestic product grew 6.5 per cent in the past fiscal year.

   One of the brightest areas of growth has been ship-wrecking. It has become the world's largest in terms of tonnage, after Taiwan.

  The industry is booming, and the number of ships for breaking is rising.

        Since last October, Pakistan has broken more than 50 ships at its yard at Gadani, 50 km west of Karachi.

  The domestic industry recovered after the government reformed taxes and duties to benefit ship-breaking. The lower price of old ships on the international market was another important factor.

  There are also changes in Pakistan's shipping industry.

   Last month, the first bulk carrier, purchased in the newly opened private sector, arrived in Karachi.

  Almost 90 per cent of Pakistan's foreign trade is handled by foreign ships.



Changes turn fortunes of nation around