WASHINGTON: The United States told China on Monday that improvements in human rights and economic reforms would serve Beijing’s own interests and promised it was not seeking to contain the Asian power’s rise.
The United States said it was raising concerns about rights and the value of China’s currency during two days of wide-ranging talks. But the two sides largely struck a conciliatory tone, stressing the need for cooperation.
Launching the annual Strategic and Economic Dialogue, Vice President Joe Biden predicted that the US-China relationship would shape the 21st century and said: “A healthy competition, in our view, is good for both of us.”
“For many of the world’s pressing problems, it’s a simple fact that when the United States and China are not at the table, the solution to the problem is less possible,” Biden said.
US Secretary of State Hillary Clinton said that the United States and China “both have much more to gain from cooperation than from conflict.”
“Some in our country see China’s progress as a threat to the United States; some in China worry that America seeks to constrain China’s growth. We reject both those views,” she said.
But the talks come amid China’s biggest crackdown on dissent in years, with authorities — apparently spooked by democracy protests in the Middle East — detaining dozens of perceived critics including bloggers, artists and lawyers.
“We have vigorous disagreement in the area of human rights,” Biden said, with top Chinese leaders at his side. “No relationship that’s real can be built on a false foundation. Where we disagree, it’s important to state it.”
“Protecting fundamental rights and freedoms, such as those enshrined in China’s international commitments as well as in China’s own constitution, is the best way to promote long-term stability and prosperity of any society,” he said.
But State Councilor Dai Bingguo, one of two senior Chinese officials leading the talks, said that his country was making progress.
Dai encouraged more Americans to visit the growing Asian power to see “the friendship of the Chinese people.”
“You may also learn first-hand the enormous progress China has made in various fields, including in human rights, and get to know what the real China is,” he said.
Tensions have subsided on some key disputes in recent months. China has let its yuan appreciate in response to inflation concerns, easing pressure from US lawmakers who accuse Beijing of undervaluing its currency for trade advantage.
But Treasury Secretary Timothy Geithner said that the value of the yuan remained the top priority for the United States.
He encouraged China to move from an export-driven economy to one based on domestic consumption — an enticing prospect for US businesses eager to tap into an increasingly prosperous market of 1.3 billion people.
With US businesses complaining of excess regulations in China, Geithner also called on Beijing to provide “a more level playing field” and to open up its financial sector, which now is dominated by old-fashioned bank accounts.
Chinese Vice Premier Wang Qishan said that his country was committed to opening up but urged the United States to “refrain from politicizing” trade.
He called China’s efforts to address economic imbalances “a long process,”adding: “It’s not something we can do overnight.”
He said China had made progress since last year’s dialogue, and called on Washington to move on China’s request to relax export controls on high-tech goods.
The talks come five months after Chinese President Hu Jintao paid a state visit to the United States in which he tried his hand at public diplomacy in hopes of changing his country’s negative image in some parts of Washington.
The Chinese side is taking a more low-key approach to the latest talks.
“The Chinese didn’t want to have any big dinners or speeches, probably because they’re holding their heads down over what is happening at home and they don’t want to get protesters,” said Douglas Paal, vice president of studies at the Carnegie Endowment for International Peace.
However, Tibetans came out to protest at the talks venue, demanding that monks ensure the freedom of monks at the Kirti monastery in Sichuan province.
Activists say authorities recently sealed off the monastery after an anti-government protest and beat to death two Tibetans who tried to protect the monks.
Thursday 12 May 2011
EU proposes overhaul of trade preferences scheme
BRUSSELS: The European Union plans to end tariff benefits for dozens of countries that have outgrown the need for preferential trade treatment under sweeping reforms presented by the bloc’s trade chief on Tuesday.
Brazil, Argentina, Russia, Saudi Arabia and scores of other relatively prosperous developing countries will be excluded from trade preferences under the plan, which must be approved by the European Parliament and the EU’s 27 member states.
The EU, the world’s largest trading bloc, will instead focus on poorer countries it views as being in greater need of growth-boosting trade benefits, including Pakistan and Ukraine.
“Global economic imbalances have shifted tremendously in the last decades. World tariffs are at all-time lows. If we grant tariff preferences in this competitive environment, those countries most in need must reap the most benefits,” Trade Commissioner Karel De Gucht said in a statement, as he laid out reforms that are a broad reworking of EU trade policy.
The plans, expected to ruffle feathers and take until 2014 to complete, reflect European ambitions to protect its industries from booming export economies while at the same time using trade as a foreign policy and development tool.
The EU has extended preferential trade treatment to developing countries under the so-called Generalised System of Preferences since 1971. In 2008, concessions to poor countries were granted on more than 6,000 products and were worth about 3 billion euros, according to EU figures.
Brazil and Russia dropped
Under the reform, some of the tariff regime’s main beneficiaries will be dropped from the system, notably Brazil and Russia, which will lose discounts on roughly 3 billion euros’ worth of exports each.
Brazil’s Foreign Ministry responded to the proposal with concern, saying late on Tuesday that the end of preferential treatment would penalize exports of local manufactured products to one of the country’s principal markets.
The value of imports entering under discounted duties will fall to about 37.7 billion euros, according to EU data, compared to almost 60 billion today.
That could prompt countries to seek preferential deals with the EU through bilateral free trade agreements (FTAs), a cornerstone of Europe’s long-term trade strategy.
“I believe that (the reform) could and should boost our FTA effort,” De Gucht told journalists in Strasbourg.
Also in line with the EU’s long-term interests is a clause to deny discounts to countries that withold scarce and coveted raw material crucial for EU production – a slight for China, which has raised export taxes on raw materials in recent years.
Europe’s main business lobby group, BusinessEurope, praised the plan, saying it would end an outdated regime which most benefits the more prosperous emerging economies.
Trade activists warned the reform would pressure poor African countries into entering unpopular free trade pacts with the EU.
“It threatens to further completely undermine regional integration in Africa while increasing pressure on less developed countries to sign free trade agreements,” said Rebecca Varghese Buchholz, trade policy adviser at UK-based Tradecraft.
Brazil, Argentina, Russia, Saudi Arabia and scores of other relatively prosperous developing countries will be excluded from trade preferences under the plan, which must be approved by the European Parliament and the EU’s 27 member states.
The EU, the world’s largest trading bloc, will instead focus on poorer countries it views as being in greater need of growth-boosting trade benefits, including Pakistan and Ukraine.
“Global economic imbalances have shifted tremendously in the last decades. World tariffs are at all-time lows. If we grant tariff preferences in this competitive environment, those countries most in need must reap the most benefits,” Trade Commissioner Karel De Gucht said in a statement, as he laid out reforms that are a broad reworking of EU trade policy.
The plans, expected to ruffle feathers and take until 2014 to complete, reflect European ambitions to protect its industries from booming export economies while at the same time using trade as a foreign policy and development tool.
The EU has extended preferential trade treatment to developing countries under the so-called Generalised System of Preferences since 1971. In 2008, concessions to poor countries were granted on more than 6,000 products and were worth about 3 billion euros, according to EU figures.
Brazil and Russia dropped
Under the reform, some of the tariff regime’s main beneficiaries will be dropped from the system, notably Brazil and Russia, which will lose discounts on roughly 3 billion euros’ worth of exports each.
Brazil’s Foreign Ministry responded to the proposal with concern, saying late on Tuesday that the end of preferential treatment would penalize exports of local manufactured products to one of the country’s principal markets.
The value of imports entering under discounted duties will fall to about 37.7 billion euros, according to EU data, compared to almost 60 billion today.
That could prompt countries to seek preferential deals with the EU through bilateral free trade agreements (FTAs), a cornerstone of Europe’s long-term trade strategy.
“I believe that (the reform) could and should boost our FTA effort,” De Gucht told journalists in Strasbourg.
Also in line with the EU’s long-term interests is a clause to deny discounts to countries that withold scarce and coveted raw material crucial for EU production – a slight for China, which has raised export taxes on raw materials in recent years.
Europe’s main business lobby group, BusinessEurope, praised the plan, saying it would end an outdated regime which most benefits the more prosperous emerging economies.
Trade activists warned the reform would pressure poor African countries into entering unpopular free trade pacts with the EU.
“It threatens to further completely undermine regional integration in Africa while increasing pressure on less developed countries to sign free trade agreements,” said Rebecca Varghese Buchholz, trade policy adviser at UK-based Tradecraft.
Stars descend on French Riviera for Cannes film festival
CANNES: The 64th edition of the Cannes film festival gets underway on Wednesday with up-and-coming directors and Hollywood A-listers rubbing shoulders at the world’s biggest cinema gathering.
Woody Allen’s latest romantic comedy “Midnight in Paris” opens the 11-day event on the French Riviera at a black-tie evening screening that already has tongues wagging.
Billed by organisers as “a love letter” to the French capital, it stars Owen Wilson, Kathy Bates and Marion Cotillard, but all eyes have been on French first lady Carla Bruni-Sarkozy, cast by Allen in a bit part as a museum curator.
However the supermodel-turned-singer has said that she is skipping the screening for “personal and professional reasons” – only stirring rumours that she is pregnant with President Nicolas Sarkozy’s child.
Italian cinema legend Bernardo Bertolucci, whose classics include “Last Tango in Paris” and “The Last Emperor,” will meanwhile be presented on Wednesday with an honorary Palme d’Or for his life’s work.
Organisers say the laurel will from this year be presented annually to a cinema legend.
A rich galaxy of film stars is converging on Cannes, with the likes of Johnny Depp and Penelope Cruz – appearing in the 3-D adventure caper “Pirates of the Caribbean: On Stranger Tides” – expected on the red carpet.
Twenty pictures, including fresh work from Spain’s Pedro Almodovar, Denmark’s Lars Von Trier and Belgium’s Dardenne brothers, are up for the highly coveted Palme d’Or this year.
Oscar-winner Robert De Niro, who starred in past Palme d’Or winners “Taxi Driver” and “The Mission”, is steering the jury that includes Hollywood stars Uma Thurman and Jude Law, Hong Kong director Johnny To and film producer Shi Nansun, and French director Olivier Assayas.
Seven hundred police officers have been detailed to the festival, where the killing of Osama bin Laden has ramped up security concerns.
In a salute to change in the Middle East, the festival is honouring Egypt as its first “guest country,” while a snap documentary of the uprising in Tunisia will be that country’s first film in Cannes in 11 years.
Films by convicted Iranian directors Jafar Panahi and Mohammad Rasoulof, made in “semi-clandestine conditions”, will meanwhile be screened in the official and Un Certain Regard sections respectively.
In competition, Spanish heavyweight Almodovar will present “La Piel Que Habito” (The Skin I Live In) with Antonio Banderas starring.
Von Trier, a Palme d’Or winner in 2000 with “Dancer in the Dark”, returns with “Melancholia,” while the Dardennes will be gunning for their third Palme d’Or with “Le Gamin au Velo” (The Kid With A Bike).
US director Terrence Malick will present “The Tree of Life”, uniting Brad Pitt and Sean Penn on screen, and Israeli director Joseph Cedar will unspool “Hearat Shulayim” (Footnote).
From Japan will be “Ishimei” (Hara-Kiri: Death of a Samurai) by Takashi Miike, and “Hanezu no Tsuki” by Naomi Kawase.
The lone British contender is Lynne Ramsay with “We Need to Talk About Kevin”, while from Australia, Julia Leigh’s “Sleeping Beauty” is one of two first-time films in competition, the other being “Michael” by Austrian film-maker Markus Schleinzer.
Cannes nearly triples in population during the 11-day festival to 200,000, due not only to all the screenings, but also to an international film market where more than 10,000 participants from 101 nations will haggle over the rights to 4,240 films, many of them still in production. – AFP
Woody Allen’s latest romantic comedy “Midnight in Paris” opens the 11-day event on the French Riviera at a black-tie evening screening that already has tongues wagging.
Billed by organisers as “a love letter” to the French capital, it stars Owen Wilson, Kathy Bates and Marion Cotillard, but all eyes have been on French first lady Carla Bruni-Sarkozy, cast by Allen in a bit part as a museum curator.
However the supermodel-turned-singer has said that she is skipping the screening for “personal and professional reasons” – only stirring rumours that she is pregnant with President Nicolas Sarkozy’s child.
Italian cinema legend Bernardo Bertolucci, whose classics include “Last Tango in Paris” and “The Last Emperor,” will meanwhile be presented on Wednesday with an honorary Palme d’Or for his life’s work.
Organisers say the laurel will from this year be presented annually to a cinema legend.
A rich galaxy of film stars is converging on Cannes, with the likes of Johnny Depp and Penelope Cruz – appearing in the 3-D adventure caper “Pirates of the Caribbean: On Stranger Tides” – expected on the red carpet.
Twenty pictures, including fresh work from Spain’s Pedro Almodovar, Denmark’s Lars Von Trier and Belgium’s Dardenne brothers, are up for the highly coveted Palme d’Or this year.
Oscar-winner Robert De Niro, who starred in past Palme d’Or winners “Taxi Driver” and “The Mission”, is steering the jury that includes Hollywood stars Uma Thurman and Jude Law, Hong Kong director Johnny To and film producer Shi Nansun, and French director Olivier Assayas.
Seven hundred police officers have been detailed to the festival, where the killing of Osama bin Laden has ramped up security concerns.
In a salute to change in the Middle East, the festival is honouring Egypt as its first “guest country,” while a snap documentary of the uprising in Tunisia will be that country’s first film in Cannes in 11 years.
Films by convicted Iranian directors Jafar Panahi and Mohammad Rasoulof, made in “semi-clandestine conditions”, will meanwhile be screened in the official and Un Certain Regard sections respectively.
In competition, Spanish heavyweight Almodovar will present “La Piel Que Habito” (The Skin I Live In) with Antonio Banderas starring.
Von Trier, a Palme d’Or winner in 2000 with “Dancer in the Dark”, returns with “Melancholia,” while the Dardennes will be gunning for their third Palme d’Or with “Le Gamin au Velo” (The Kid With A Bike).
US director Terrence Malick will present “The Tree of Life”, uniting Brad Pitt and Sean Penn on screen, and Israeli director Joseph Cedar will unspool “Hearat Shulayim” (Footnote).
From Japan will be “Ishimei” (Hara-Kiri: Death of a Samurai) by Takashi Miike, and “Hanezu no Tsuki” by Naomi Kawase.
The lone British contender is Lynne Ramsay with “We Need to Talk About Kevin”, while from Australia, Julia Leigh’s “Sleeping Beauty” is one of two first-time films in competition, the other being “Michael” by Austrian film-maker Markus Schleinzer.
Cannes nearly triples in population during the 11-day festival to 200,000, due not only to all the screenings, but also to an international film market where more than 10,000 participants from 101 nations will haggle over the rights to 4,240 films, many of them still in production. – AFP
Pakistan, IMF start key talks on targets, reforms in coming budget
KARACHI: Pakistani officials on Wednesday began talks with the International Monetary Fund — meetings moved to Dubai after Osama bin Laden’s death — aimed at getting agreement on enough reforms in the coming budget to restart a halted IMF bailout loan.
The two sides are expected to struggle to reach an accord on targets for the budget to cover the fiscal year that starts on July 1. The talks are expected to last until May 17, and the budget is due to be unveiled on May 28.
The talks come at a time when some US lawmakers have questioned whether Pakistan is serious about fighting militants and called for a suspension of American aid to Islamabad.
US support was pivotal to getting an agreement, in November 2008, on an $11 billion IMF loan to financially-strapped Pakistan. In August 2010, the IMF stopped releasing funds because of Pakistan’s patchy implementation of fiscal reforms the government promised to carry out.
An official involved in the Dubai talks said the IMF wants Pakistan to reduce its deficit by increasing revenue while cutting wasteful spending.
The budget deficit for the first nine months of the current fiscal year was 4.5 per cent of gross domestic product. The government has said it aims to keep the budget deficit to less than 5.5 per cent of GDP for the year, but analysts doubt that can be achieved.
Pakistani budgets have a “huge lack of fairness” in that some sectors are not taxed at all and some untargeted subsidies such as for electricity have yet to be eliminated, said the official.
In Pakistan, tax revenue is equivalent to only about 10 per cent of GDP, one of the lowest levels in the world. The IMF and other donors have pressed Pakistan to raise its ratio by implementing fiscal reforms.
But it remains to be seen if the unpopular government will increase its tax base in the new budget, especially with an election due in roughly 18 months.
“Pakistan will have to take tough measures to increase its revenue otherwise the economy will never head towards sustainable growth,” said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.
Economic growth is expected to be 2.4 per cent this fiscal year compared with 4.1 per cent last year.
Ways to generate revenue may include a gross asset tax or a wealth tax, along with a much-debated general sales but political considerations may prevail.
“Heading towards elections, I don’t think there will be any substantial move on tax reform,” said Sakib Sherani, a former economic adviser to the government, adding that there are many vested interests that benefit from tax-exemptions.
DEPENDENCE ON FOREIGN AID?
In the wake of the recent United States operation that killed bin Laden, the subject of American aid is a key and hot one.
Prior to the US operation, Pakistan’s finance minister said it was “largely a myth” that the country got tens of billions of dollars in aid from the US.
According to a US government auditor’s report, by the end of 2010, Pakistan got only $179.5 million of $1.5 billion authorized in civilian aid.
“Foreign aid may be small and marginal but the US clearly plays a role in terms of its membership of the board of the IMF and in the past has been helpful,” said Hafiz Pasha, member of the government’s economic advisory council.
Pakistan’s foreign reserves, according to Pasha, are hovering around record high levels at $17.11 billion but of that, $8 billion is from the IMF and nearly $3.5 billion belongs to commercial banks.
“So really, our own genuine reserves are about $5 billion to $6 billion and we have to start repaying our debt early next year,” Pasha said, referring to the need start paying off the IMF loan by 2012.
The two sides are expected to struggle to reach an accord on targets for the budget to cover the fiscal year that starts on July 1. The talks are expected to last until May 17, and the budget is due to be unveiled on May 28.
The talks come at a time when some US lawmakers have questioned whether Pakistan is serious about fighting militants and called for a suspension of American aid to Islamabad.
US support was pivotal to getting an agreement, in November 2008, on an $11 billion IMF loan to financially-strapped Pakistan. In August 2010, the IMF stopped releasing funds because of Pakistan’s patchy implementation of fiscal reforms the government promised to carry out.
An official involved in the Dubai talks said the IMF wants Pakistan to reduce its deficit by increasing revenue while cutting wasteful spending.
The budget deficit for the first nine months of the current fiscal year was 4.5 per cent of gross domestic product. The government has said it aims to keep the budget deficit to less than 5.5 per cent of GDP for the year, but analysts doubt that can be achieved.
Pakistani budgets have a “huge lack of fairness” in that some sectors are not taxed at all and some untargeted subsidies such as for electricity have yet to be eliminated, said the official.
In Pakistan, tax revenue is equivalent to only about 10 per cent of GDP, one of the lowest levels in the world. The IMF and other donors have pressed Pakistan to raise its ratio by implementing fiscal reforms.
But it remains to be seen if the unpopular government will increase its tax base in the new budget, especially with an election due in roughly 18 months.
“Pakistan will have to take tough measures to increase its revenue otherwise the economy will never head towards sustainable growth,” said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.
Economic growth is expected to be 2.4 per cent this fiscal year compared with 4.1 per cent last year.
Ways to generate revenue may include a gross asset tax or a wealth tax, along with a much-debated general sales but political considerations may prevail.
“Heading towards elections, I don’t think there will be any substantial move on tax reform,” said Sakib Sherani, a former economic adviser to the government, adding that there are many vested interests that benefit from tax-exemptions.
DEPENDENCE ON FOREIGN AID?
In the wake of the recent United States operation that killed bin Laden, the subject of American aid is a key and hot one.
Prior to the US operation, Pakistan’s finance minister said it was “largely a myth” that the country got tens of billions of dollars in aid from the US.
According to a US government auditor’s report, by the end of 2010, Pakistan got only $179.5 million of $1.5 billion authorized in civilian aid.
“Foreign aid may be small and marginal but the US clearly plays a role in terms of its membership of the board of the IMF and in the past has been helpful,” said Hafiz Pasha, member of the government’s economic advisory council.
Pakistan’s foreign reserves, according to Pasha, are hovering around record high levels at $17.11 billion but of that, $8 billion is from the IMF and nearly $3.5 billion belongs to commercial banks.
“So really, our own genuine reserves are about $5 billion to $6 billion and we have to start repaying our debt early next year,” Pasha said, referring to the need start paying off the IMF loan by 2012.
Pakistan tax dodgers put economy in peril
ISLAMABAD: Pakistan is defying mounting Western pressure to end a giant tax dodge with fewer and fewer people contributing to government coffers, spelling dire consequences for a sagging economy.
Tax is taboo in Pakistan. Barely one per cent of the population pays at all, as a corrupt bureaucracy safeguards entrenched interests and guards private wealth, but starves energy, health and education of desperately needed funds.
Less than 10 per cent of GDP comes from tax revenue – one of the lowest global rates and worse than in much of Africa, say economists.
Federal Board of Revenue (FBR) spokesman Asrar Rauf said 1.9 million people paid tax in 2010, less than the year before, despite 3.2 million being registered to pay – itself a drop in the ocean of a population of 180 million.
As a result, Pakistan’s fiscal deficit widened from 5.3 per cent to 6.3 per cent of GDP in 2010, the Asian Development Bank said this month, knocking 2011 growth figures to 2.5 per cent and predictions for 2012 to 3.2 per cent.
In the wake of catastrophic 2010 floods that cost the economy $10 billion, Washington donated hundreds of millions of dollars and demanded that Pakistan’s rich, whose lifestyles outstrip many in the West, step up to the plate.
This month visiting British Prime Minister David Cameron pressed the point home, saying aid increases were a hard sell when: “Too many of your richest people are getting away without paying much tax at all and that’s not fair”.
And despite a flurry of meetings, no new loan has been agreed in the run-up to the IMF and World Bank’s Spring meetings.
An IMF review mission is due to visit on May 8. “Consensus is building, we have almost reached agreement (on reform),” one government official told AFP, but gave no details.
Under pressure, President Asif Ali Zardari pushed through a short-term 15 per cent flood surcharge on income tax and a 2.5 per cent special excise duty in March, but it is uncertain whether they will survive the next budget in June.
Government suggestions of raising revenue by reforming a general sales tax ran into walk-outs from politicians who said it unfairly hits the poor.
What would really work, say analysts, would be scrapping exemptions that serve entrenched interests, such as a 50 percent tax discount on sugar and a gate on taxing agricultural income that largely exempts wealthy feudal landowners.
But stalemate and vested interests have made that impossible.
“There’s talk of early elections. One has a brittle coalition. A lot of the reform areas that need to be dealt with have very well entrenched and powerful lobbies that are making the case against it,” said a finance ministry official.
As it is, the tiny minority who contribute say they carry a disproportionate tax burden, for which they get nothing in return.
Pakistan suffers from an awful energy crisis, yet government spending on electricity subsidies last year reached just under one percent of GDP, health spending 0.5 percent and education two percent, said the finance ministry.
According to a 2009 study by the Pakistan Institute of Legislative Development and Transparency, the average member of parliament was worth $900,000 and the wealthiest $37 million.
Those figures stand against estimates that a quarter of the population lives below the poverty line and that GDP per capita stands at $2,400.
“No one trusts the government,” says industrialist Mohammad Ishaq, former vice president of the chamber of commerce in the northwestern province of Khyber Pakhtunkhwa.
“Without social welfare and with this corruption, nobody is ready to pay tax… in return one gets nothing — no health, education, social security.” Eunuchs have been appointed tax collectors in Karachi, the financial capital, on the understanding that a visit from the maligned transgender group would embarrass people into paying up.
But former finance minister Salman Shah said tax evasion was inevitable because of corruption within the FBR, which employs 23,000 people nationwide.
“There’s a big mistrust of the tax authority itself. That’s why a self-assessment scheme came in,” said Shah.
Pakistan’s counter-terror fight generates huge injections of aid from the United States, but at a conference last October, Secretary of State Hillary Clinton could not hide her impatience.
“Is it absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people while the taxpayer of Europe, the US and other contributing countries are all chipping in to do our part,” she said.
Tax is taboo in Pakistan. Barely one per cent of the population pays at all, as a corrupt bureaucracy safeguards entrenched interests and guards private wealth, but starves energy, health and education of desperately needed funds.
Less than 10 per cent of GDP comes from tax revenue – one of the lowest global rates and worse than in much of Africa, say economists.
Federal Board of Revenue (FBR) spokesman Asrar Rauf said 1.9 million people paid tax in 2010, less than the year before, despite 3.2 million being registered to pay – itself a drop in the ocean of a population of 180 million.
As a result, Pakistan’s fiscal deficit widened from 5.3 per cent to 6.3 per cent of GDP in 2010, the Asian Development Bank said this month, knocking 2011 growth figures to 2.5 per cent and predictions for 2012 to 3.2 per cent.
In the wake of catastrophic 2010 floods that cost the economy $10 billion, Washington donated hundreds of millions of dollars and demanded that Pakistan’s rich, whose lifestyles outstrip many in the West, step up to the plate.
This month visiting British Prime Minister David Cameron pressed the point home, saying aid increases were a hard sell when: “Too many of your richest people are getting away without paying much tax at all and that’s not fair”.
Tax reform has come to nothing, not least because of political stalemate in the hamstrung parliament and a government coalition threatened with collapse by walk-outs.
The IMF last May halted $11.3 billion assistance package over a lack of progress on reforms, principally on tax.And despite a flurry of meetings, no new loan has been agreed in the run-up to the IMF and World Bank’s Spring meetings.
An IMF review mission is due to visit on May 8. “Consensus is building, we have almost reached agreement (on reform),” one government official told AFP, but gave no details.
Under pressure, President Asif Ali Zardari pushed through a short-term 15 per cent flood surcharge on income tax and a 2.5 per cent special excise duty in March, but it is uncertain whether they will survive the next budget in June.
Government suggestions of raising revenue by reforming a general sales tax ran into walk-outs from politicians who said it unfairly hits the poor.
What would really work, say analysts, would be scrapping exemptions that serve entrenched interests, such as a 50 percent tax discount on sugar and a gate on taxing agricultural income that largely exempts wealthy feudal landowners.
But stalemate and vested interests have made that impossible.
“There’s talk of early elections. One has a brittle coalition. A lot of the reform areas that need to be dealt with have very well entrenched and powerful lobbies that are making the case against it,” said a finance ministry official.
As it is, the tiny minority who contribute say they carry a disproportionate tax burden, for which they get nothing in return.
Pakistan suffers from an awful energy crisis, yet government spending on electricity subsidies last year reached just under one percent of GDP, health spending 0.5 percent and education two percent, said the finance ministry.
According to a 2009 study by the Pakistan Institute of Legislative Development and Transparency, the average member of parliament was worth $900,000 and the wealthiest $37 million.
Those figures stand against estimates that a quarter of the population lives below the poverty line and that GDP per capita stands at $2,400.
“No one trusts the government,” says industrialist Mohammad Ishaq, former vice president of the chamber of commerce in the northwestern province of Khyber Pakhtunkhwa.
“Without social welfare and with this corruption, nobody is ready to pay tax… in return one gets nothing — no health, education, social security.” Eunuchs have been appointed tax collectors in Karachi, the financial capital, on the understanding that a visit from the maligned transgender group would embarrass people into paying up.
But former finance minister Salman Shah said tax evasion was inevitable because of corruption within the FBR, which employs 23,000 people nationwide.
“There’s a big mistrust of the tax authority itself. That’s why a self-assessment scheme came in,” said Shah.
Pakistan’s counter-terror fight generates huge injections of aid from the United States, but at a conference last October, Secretary of State Hillary Clinton could not hide her impatience.
“Is it absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people while the taxpayer of Europe, the US and other contributing countries are all chipping in to do our part,” she said.
What to expect in Pakistan’s FY11/12 budget
KARACHI: Pakistan is due to announce its budget for the 2011/12 (July-June) fiscal year on May 28. The International Monetary Fund and Pakistan began talks on Wednesday in Dubai to discuss budget targets.
Following are some targets that could be announced:
ECONOMIC GROWTH
Pakistan’s economy is expected to grow 4.2 per cent in the coming financial year, which starts on July 1, after what is expected to be growth of 2.4 per cent this fiscal year.
The Asian Development Bank has forecast growth next year will be 3.7 per cent. It expects persistent energy problems and security issues will continue to check Pakistan’s growth in 2011/12, with surging inflation posing a major risk.
REVENUE TARGET
According to reports, the government is targeting tax revenue at 1.95 trillion rupees ($23 billion) in the next fiscal year, compared with the Federal Board of Revenue’s estimate of revenues of 1.59 trillion rupees ($18.7 billion) this fiscal year.
Analysts expect the revenue board to collect 1.5 trillion rupees this year and some say its target for next year’s tax revenue could be unrealistic.
EXPENDITURE
Analysts said there is hardly any room to cut on the expenditure side as 75 per cent of the Federal Board of Revenue’s tax revenue goes on debt servicing or interest repayments and security related expenditure.
However, the government could eliminate untargeted subsidies such as electricity subsidies. Another option would be to sell off loss-making public sector enterprises which according to analysts would cost about 300 billion rupees ($3.5 billion) this year just to run.
DEFENSE
According to finance officials, Pakistan is budgeting 495 billion rupees ($5.8 billion) for defense, an 11.7 per cent increase from last year. Analysts said that was a realistic increase and was less than the annual rate of inflation which is at 13.04 per cent.
INFLATION and FISCAL DEFICIT
Inflation is being projected to come in at 12 per cent next year while the fiscal deficit is expected to be contained to 4.5 per cent of GDP.
POSSIBLE REVENUE MEASURES
- Imposition of a gross asset tax or a wealth tax.
- Imposition of a reformed general sales tax or a “plan B” which would include removal of exemptions.
- Imposition of tax on agricultural income but that would be announced in provincial budgets.
Following are some targets that could be announced:
ECONOMIC GROWTH
Pakistan’s economy is expected to grow 4.2 per cent in the coming financial year, which starts on July 1, after what is expected to be growth of 2.4 per cent this fiscal year.
The Asian Development Bank has forecast growth next year will be 3.7 per cent. It expects persistent energy problems and security issues will continue to check Pakistan’s growth in 2011/12, with surging inflation posing a major risk.
REVENUE TARGET
According to reports, the government is targeting tax revenue at 1.95 trillion rupees ($23 billion) in the next fiscal year, compared with the Federal Board of Revenue’s estimate of revenues of 1.59 trillion rupees ($18.7 billion) this fiscal year.
Analysts expect the revenue board to collect 1.5 trillion rupees this year and some say its target for next year’s tax revenue could be unrealistic.
EXPENDITURE
Analysts said there is hardly any room to cut on the expenditure side as 75 per cent of the Federal Board of Revenue’s tax revenue goes on debt servicing or interest repayments and security related expenditure.
However, the government could eliminate untargeted subsidies such as electricity subsidies. Another option would be to sell off loss-making public sector enterprises which according to analysts would cost about 300 billion rupees ($3.5 billion) this year just to run.
DEFENSE
According to finance officials, Pakistan is budgeting 495 billion rupees ($5.8 billion) for defense, an 11.7 per cent increase from last year. Analysts said that was a realistic increase and was less than the annual rate of inflation which is at 13.04 per cent.
INFLATION and FISCAL DEFICIT
Inflation is being projected to come in at 12 per cent next year while the fiscal deficit is expected to be contained to 4.5 per cent of GDP.
POSSIBLE REVENUE MEASURES
- Imposition of a gross asset tax or a wealth tax.
- Imposition of a reformed general sales tax or a “plan B” which would include removal of exemptions.
- Imposition of tax on agricultural income but that would be announced in provincial budgets.
Pakistan and Russia face similar threats: Medvedev
MOSCOW: Russia and Pakistan on Thursday pledged to coordinate efforts in the fight against terror as the Kremlin welcomed the Pakistani leader for a key visit after the killing of Osama bin Laden.
Meeting Pakistan’s President Asif Ali Zardari for talks expected to also produce several economic cooperation agreements, Russian President Dmitry Medvedev said the two countries both suffered from terrorism.
“We are interested in coordinating our efforts on the international arena. It is obvious that our countries are facing absolutely the same threat, I mean international terrorism,” Russian news agencies quoted Medvedev as telling Zardari at the Kremlin.
“We have to do everything so that we could jointly counter this main evil of the 21st century,” Medvedev was quoted as saying.
Zardari, who kicked off his three-day trip to Russia on Wednesday, expressed hope his visit would help deepen ties between the two countries which share a complicated history.
“Our countries are very close neighbours, we are located in the same region and although we do not share borders our hearts beat in unison,” Russian news agencies quoted Zardari as saying.
“The time has come to acknowledge the importance of our countries for each other and the importance of our cooperation.”
Foreign news agencies were not invited to cover the talks.
The Russian trip is Zardari’s first high-profile visit abroad since the Al-Qaeda leader, the world’s most wanted man, was killed in the raid by US forces on a compound in Abbottabad in Pakistan.
The Kremlin hailed the death of bin Laden as a “serious success… in the war against international terrorism” but Pakistan has expressed fury that US forces carried out the raid without informing Islamabad first.
Russia and Pakistan are hoping to pursue joint economic projects and officials from the two countries were also expected to sign agreements on cooperation in agriculture, aviation and energy.
Meeting Pakistan’s President Asif Ali Zardari for talks expected to also produce several economic cooperation agreements, Russian President Dmitry Medvedev said the two countries both suffered from terrorism.
“We are interested in coordinating our efforts on the international arena. It is obvious that our countries are facing absolutely the same threat, I mean international terrorism,” Russian news agencies quoted Medvedev as telling Zardari at the Kremlin.
“We have to do everything so that we could jointly counter this main evil of the 21st century,” Medvedev was quoted as saying.
Zardari, who kicked off his three-day trip to Russia on Wednesday, expressed hope his visit would help deepen ties between the two countries which share a complicated history.
“Our countries are very close neighbours, we are located in the same region and although we do not share borders our hearts beat in unison,” Russian news agencies quoted Zardari as saying.
“The time has come to acknowledge the importance of our countries for each other and the importance of our cooperation.”
Foreign news agencies were not invited to cover the talks.
The Russian trip is Zardari’s first high-profile visit abroad since the Al-Qaeda leader, the world’s most wanted man, was killed in the raid by US forces on a compound in Abbottabad in Pakistan.
The Kremlin hailed the death of bin Laden as a “serious success… in the war against international terrorism” but Pakistan has expressed fury that US forces carried out the raid without informing Islamabad first.
Russia and Pakistan are hoping to pursue joint economic projects and officials from the two countries were also expected to sign agreements on cooperation in agriculture, aviation and energy.
Indian PM in Kabul for talks after bin Laden’s death
KABUL: Indian Prime Minister Manmohan Singh arrived in Afghanistan on Thursday for a two-day visit, including talks on the regional impact of Osama bin Laden’s death and future aid projects, officials said.
Singh, on his first visit to Kabul in six years, was due to meet President Hamid Karzai as calls grow for a quicker withdrawal of US troops from Afghanistan following the killing of the al Qaeda chief.
Any rapid reduction of US presence in Afghanistan would cause India concern, as it fears the country could become dominated by a Taliban-influenced government friendly towards its arch-rival Pakistan.
Singh said that he and Karzai would “exchange views on developments in the region and our common fight against the scourge of terrorism”.
“The quest of the Afghan people for peace, stability and reconciliation needs the full support of all countries in the region and the international community,” he said in a statement before leaving New Delhi.
After more than two decades without sway in Kabul, India swiftly established diplomatic ties with the new government after the 2001 US-led invasion deposed the extremist Taliban.
India has since committed 1.3 billion dollars to Afghanistan for projects ranging from new roads and electricity lines to constructing a new parliament.
But the relationship has raised hackles in Islamabad, where the government and military establishment has long considered Afghanistan its own strategic asset to offset the perceived threat from India in the east.
Analysts say India’s tussle with Pakistan for influence in Afghanistan could sharpen as the United States begins cutting troop numbers from July with the aim of all foreign forces exiting the country by the end of 2014.
Both India and Afghanistan have troubled relationships with Pakistan, accusing it of supporting and sheltering militant leaders who orchestrate attacks in the region.
Pakistan has been deeply embarrassed by the May 2 killing of bin Laden by US Special Forces in the garrison city of Abbottabad, just two hours’ drive from Islamabad, forced to deny allegations of incompetence and complicity.
Karzai’s office said the consequences of bin Laden’s death would be a key topic discussed by the leaders on Thursday.
“Since it is a new issue, it is on the agenda,” spokesman Siamak Herawi said. “They will hold talks, then a press conference before the president hosts an official banquet this evening.”An Indian government source told AFP that Singh wanted “to hear what President Karzai has to say about” the death of bin Laden.
“Al Qaeda is obviously of concern to all of us. We hope it (the death of bin Laden) will affect the operations of Al-Qaeda in Afghanistan,” he said.
US Major General John Campbell, who commands NATO-led forces in the east, told reporters this week that the death could encourage Afghan insurgents to lay down their weapons and spur a possible peace settlement to end the war.
Karzai has visited India 10 times since 2002, and was educated for a time in the Indian hill station of Shimla. Singh last visited Afghanistan in 2005.
Singh, on his first visit to Kabul in six years, was due to meet President Hamid Karzai as calls grow for a quicker withdrawal of US troops from Afghanistan following the killing of the al Qaeda chief.
Any rapid reduction of US presence in Afghanistan would cause India concern, as it fears the country could become dominated by a Taliban-influenced government friendly towards its arch-rival Pakistan.
Singh said that he and Karzai would “exchange views on developments in the region and our common fight against the scourge of terrorism”.
“The quest of the Afghan people for peace, stability and reconciliation needs the full support of all countries in the region and the international community,” he said in a statement before leaving New Delhi.
After more than two decades without sway in Kabul, India swiftly established diplomatic ties with the new government after the 2001 US-led invasion deposed the extremist Taliban.
India has since committed 1.3 billion dollars to Afghanistan for projects ranging from new roads and electricity lines to constructing a new parliament.
But the relationship has raised hackles in Islamabad, where the government and military establishment has long considered Afghanistan its own strategic asset to offset the perceived threat from India in the east.
Analysts say India’s tussle with Pakistan for influence in Afghanistan could sharpen as the United States begins cutting troop numbers from July with the aim of all foreign forces exiting the country by the end of 2014.
Both India and Afghanistan have troubled relationships with Pakistan, accusing it of supporting and sheltering militant leaders who orchestrate attacks in the region.
Pakistan has been deeply embarrassed by the May 2 killing of bin Laden by US Special Forces in the garrison city of Abbottabad, just two hours’ drive from Islamabad, forced to deny allegations of incompetence and complicity.
Karzai’s office said the consequences of bin Laden’s death would be a key topic discussed by the leaders on Thursday.
“Since it is a new issue, it is on the agenda,” spokesman Siamak Herawi said. “They will hold talks, then a press conference before the president hosts an official banquet this evening.”An Indian government source told AFP that Singh wanted “to hear what President Karzai has to say about” the death of bin Laden.
“Al Qaeda is obviously of concern to all of us. We hope it (the death of bin Laden) will affect the operations of Al-Qaeda in Afghanistan,” he said.
US Major General John Campbell, who commands NATO-led forces in the east, told reporters this week that the death could encourage Afghan insurgents to lay down their weapons and spur a possible peace settlement to end the war.
Karzai has visited India 10 times since 2002, and was educated for a time in the Indian hill station of Shimla. Singh last visited Afghanistan in 2005.
ICC considered ‘trapping’ players prepared to fix matches
LONDON: International Cricket Council (ICC) chief executive Haroon Lorgat has considered the use of ‘sting’ operations to trap players prepared to fix matches.
The South African administrator said the use of a “mystery shopper” could help weed out possible fixers as the global governing body tries to eradicate corruption from top-flight international cricket.
“I thought when this issue came up last year that perhaps we could have a ‘mystery shopper’,” Lorgat told the BBC’s Hardtalk programme.
“In other words, some people posing as bookmakers approach players and see if those players report along with our codes of conduct.”
However, Lorgat admitted the proposal had met with strong resistance.
“We would have to get the players’ federations consenting to it and they of course opposed it and were not happy, they considered it a form of entrapment,” he said.
Another plan would give the ICC access to players’ bank accounts and assets so that they could be monitored, but Lorgat conceded that had less chance of being enacted than his ‘sting’ scheme.
“It is a bit more complex than that, there are human rights issues and legalities to understand properly,” he said.
Three memmbers of the Pakistan team – former Test captain Salman Butt and bowlers Mohammad Asif and Mohammad Amir – were all banned by the ICC for a minimum of five years each for their involvement in a spot-fixing scam during last year’s tour of England.
The trio now face criminal prosecution in England.
But the scandal, which involved the bowling of deliberate no-balls during the Lord’s Test, only came to light as a result of a ‘sting’ operation carried out by Britain’s News of the World tabloid.
Many pundits said the fact it took a newspaper, rather than the ICC’s own anti-corruption and security unit, to expose the affair was an embarrassment for the global governing body.
That was a point the ICC denied at the time but Lorgat told the BBC: “We are doing a review of our whole process and all of our systems right now.
“We have engaged an independent firm to conduct that review and I’m hopeful that some constructive recommendations will come up that will enhance or improve the way we are currently tackling the issue.”
The South African administrator said the use of a “mystery shopper” could help weed out possible fixers as the global governing body tries to eradicate corruption from top-flight international cricket.
“I thought when this issue came up last year that perhaps we could have a ‘mystery shopper’,” Lorgat told the BBC’s Hardtalk programme.
“In other words, some people posing as bookmakers approach players and see if those players report along with our codes of conduct.”
However, Lorgat admitted the proposal had met with strong resistance.
“We would have to get the players’ federations consenting to it and they of course opposed it and were not happy, they considered it a form of entrapment,” he said.
Another plan would give the ICC access to players’ bank accounts and assets so that they could be monitored, but Lorgat conceded that had less chance of being enacted than his ‘sting’ scheme.
“It is a bit more complex than that, there are human rights issues and legalities to understand properly,” he said.
Three memmbers of the Pakistan team – former Test captain Salman Butt and bowlers Mohammad Asif and Mohammad Amir – were all banned by the ICC for a minimum of five years each for their involvement in a spot-fixing scam during last year’s tour of England.
The trio now face criminal prosecution in England.
But the scandal, which involved the bowling of deliberate no-balls during the Lord’s Test, only came to light as a result of a ‘sting’ operation carried out by Britain’s News of the World tabloid.
Many pundits said the fact it took a newspaper, rather than the ICC’s own anti-corruption and security unit, to expose the affair was an embarrassment for the global governing body.
That was a point the ICC denied at the time but Lorgat told the BBC: “We are doing a review of our whole process and all of our systems right now.
“We have engaged an independent firm to conduct that review and I’m hopeful that some constructive recommendations will come up that will enhance or improve the way we are currently tackling the issue.”
Syria top destination for illegal Iran arms – UN
UNITED NATIONS: Most of Iran’s breaches of a UN arms embargo have been illegal weapons deliveries to Syria, which Western diplomats say were to be passed on to Lebanese and Palestinian militants, a UN report says.
The report by the UN Security Council’s so-called Panel of Experts, a newly formed committee that reports on compliance with four rounds of UN sanctions imposed on Iran for refusing to halt its nuclear enrichment program, also says Tehran flouts the sanctions as it continues to develop its atomic program.
Western powers and their allies say they suspect Iran is developing the capability to produce nuclear weapons under cover of a civilian atomic energy program. Iran insists its only aim is the peaceful generation of electricity and refuses to halt its enrichment program.
“The Panel notes that most reported incidents of conventional arms-related violations involve Syria, which has a long and close relationship with Iran,” said the confidential report, which was obtained by Reuters on Wednesday.
“In all such incidents inspected by the Panel, prohibited material was carefully concealed to avoid routine inspection and hide the identity of end-users,” it said.
The panel noted that it was likely that “transfers took place undetected and that other illicit shipments were identified but not reported to the (Sanctions) Committee.”
The report said Syria was the stated destination of the weapons in six out of nine incidents of conventional arms transfers reported to the panel. It said the panel “awaits Syria’s response to its queries.”
Israeli, US and other Western officials say that Syria has become a conduit for Iranian transfers of arms to Hezbollah militants in Lebanon and Hamas in the Gaza Strip. Iran and Syria have denied the charges.
Expanding presence in Africa
The expert panel noted that Iran appeared to be “expanding its presence in Africa, both through increased trade and diplomatic activity. Concurrent with this, it has been alleged that the IRGC (Islamic Revolutionary Guard Corps) is also expanding in the region.”
The report mentioned a case in which Nigerian authorities complained to the Iran sanctions committee about an Iranian arms shipment it seized last year. Tehran said that arms shipment was a legitimate trade deal with Gambia.
Nigeria is prosecuting one of two Iranians allegedly involved in the deal. UN diplomats say both Iranians appeared to have connections to the IRGC.
There were other cases of attempts by Iran to export conventional weapons in violation of the UN embargo. Among the countries that uncovered such attempts were Turkey, Cyprus, Germany, Israel and Britain. The weapons ranged from bullets, machine guns and explosives to small missiles and launchers, the report said.
As for Iran’s nuclear program, the report said Tehran is believed “to be coming close to exhausting its supply of uranium oxide.”
It said Iran may therefore be seeking additional sources of uranium that would be needed to realize its planned expansion of uranium enrichment activity.
The report said Iran was exploiting loopholes in the sanctions regime “by seeking to procure equipment and technology that fall below the thresholds for listed (banned) items, but which are still useful, in an attempt to evade sanctions while maintaining its nuclear activities.”
Iran has also been trying to purchase nuclear technology in developed countries with strong export controls by placing orders with intermediaries in countries without rigorous export oversight, the panel said. It added that the front companies then re-export the items to Iran.
The report concludes that the sanctions are “slowing Iran’s nuclear program but are not yet having an impact on the decision calculus of its leadership with respect to halting uranium enrichment and heavy water-related activities.”
The report by the UN Security Council’s so-called Panel of Experts, a newly formed committee that reports on compliance with four rounds of UN sanctions imposed on Iran for refusing to halt its nuclear enrichment program, also says Tehran flouts the sanctions as it continues to develop its atomic program.
Western powers and their allies say they suspect Iran is developing the capability to produce nuclear weapons under cover of a civilian atomic energy program. Iran insists its only aim is the peaceful generation of electricity and refuses to halt its enrichment program.
“The Panel notes that most reported incidents of conventional arms-related violations involve Syria, which has a long and close relationship with Iran,” said the confidential report, which was obtained by Reuters on Wednesday.
“In all such incidents inspected by the Panel, prohibited material was carefully concealed to avoid routine inspection and hide the identity of end-users,” it said.
The panel noted that it was likely that “transfers took place undetected and that other illicit shipments were identified but not reported to the (Sanctions) Committee.”
The report said Syria was the stated destination of the weapons in six out of nine incidents of conventional arms transfers reported to the panel. It said the panel “awaits Syria’s response to its queries.”
Israeli, US and other Western officials say that Syria has become a conduit for Iranian transfers of arms to Hezbollah militants in Lebanon and Hamas in the Gaza Strip. Iran and Syria have denied the charges.
Expanding presence in Africa
The expert panel noted that Iran appeared to be “expanding its presence in Africa, both through increased trade and diplomatic activity. Concurrent with this, it has been alleged that the IRGC (Islamic Revolutionary Guard Corps) is also expanding in the region.”
The report mentioned a case in which Nigerian authorities complained to the Iran sanctions committee about an Iranian arms shipment it seized last year. Tehran said that arms shipment was a legitimate trade deal with Gambia.
Nigeria is prosecuting one of two Iranians allegedly involved in the deal. UN diplomats say both Iranians appeared to have connections to the IRGC.
There were other cases of attempts by Iran to export conventional weapons in violation of the UN embargo. Among the countries that uncovered such attempts were Turkey, Cyprus, Germany, Israel and Britain. The weapons ranged from bullets, machine guns and explosives to small missiles and launchers, the report said.
As for Iran’s nuclear program, the report said Tehran is believed “to be coming close to exhausting its supply of uranium oxide.”
It said Iran may therefore be seeking additional sources of uranium that would be needed to realize its planned expansion of uranium enrichment activity.
The report said Iran was exploiting loopholes in the sanctions regime “by seeking to procure equipment and technology that fall below the thresholds for listed (banned) items, but which are still useful, in an attempt to evade sanctions while maintaining its nuclear activities.”
Iran has also been trying to purchase nuclear technology in developed countries with strong export controls by placing orders with intermediaries in countries without rigorous export oversight, the panel said. It added that the front companies then re-export the items to Iran.
The report concludes that the sanctions are “slowing Iran’s nuclear program but are not yet having an impact on the decision calculus of its leadership with respect to halting uranium enrichment and heavy water-related activities.”
PM Gilani inaugurates Chashma-2 nuclear power plant
ISLAMABAD: Pakistani Prime Minister Yousuf Raza Gilani on Thursday inaugurated a 330-megawatt nuclear power plant built with Chinese assistance.
The plant is at Chashma in Punjab, where a Chinese-aided power plant of similar capacity is already operational.
“Today is a proud day for Pakistan and for Pakistan’s civil nuclear energy programme,” Gilani said as he commissioned the second unit.
“It is yet another illustrious example of the Pakistan-China cooperation in the field of nuclear science and technology,” he said.
The opening of Chashma-2 comes as Gilani is due to make a four-day official visit to China next week.
The plant is at Chashma in Punjab, where a Chinese-aided power plant of similar capacity is already operational.
“Today is a proud day for Pakistan and for Pakistan’s civil nuclear energy programme,” Gilani said as he commissioned the second unit.
“It is yet another illustrious example of the Pakistan-China cooperation in the field of nuclear science and technology,” he said.
The opening of Chashma-2 comes as Gilani is due to make a four-day official visit to China next week.
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