An interview with the Rector of MITE – Dr. Huma Baqai MiTE is a project of The Millennium Trust for Education and Entrepreneurship (TMTEE) built on 3Es principle (Empathy, Entrepreneurship and Equity). The founders of the trust TMTEE also have contributed towards building and creating the legacy of The Roots Millennium Schools Pakistan, Pakistan’s third-largest educational group in Pakistan for K-12 education. They also are responsible and proud founders of The Millennium Universal College, the Transnational Higher Education Wing of The Millennium Education group. The team of passionate academicians is spearheading MiTE with the same objective of delivering quality teaching and learning reflective of the legacy…
Author: Ahsan Nisar
Mass transit turned delivery startup, Airlift, has announced shutting down its operations in Pakistan since 13th July 2022. Airlift was a perfect platform and a few months ago they generated record high revenue but now they are closed. When it secured a Series B of US$85 million last year, Airlift looked to be on top of the world, an aspiration in a startup ecosystem that had just begun to thrive. In three years’ time, it had raised a total funding of $110m. So where exactly did they go wrong? As with all setbacks, there are some hard lessons to be…
As financial inclusion is picking up pace in Pakistan, so are various scams and scandals. Of late, many exploitative lending apps have surfaced, luring people with misleading terms. One such scandal which comes under the category of extortion is being reported for “Barwaqt” app that is offering instant credit of up to PKR 25,000 in less than half an hour to clients. The surprising fact is that the entity is registered with Securities and Exchange Commission of Pakistan (SECP) but is involved in many shady deals. Its ownership is also dubious as there is clear evidence that it is being…
Solar energy Pakistan has a population of over 225 million. Approximately 88 percent of the population has access to electricity while 12 percent remains un-electrified. The annual per capita electricity consumption in Pakistan is around 550 kWh as compared with the world average of 3,081 kWh per capita. The energy sector has pivotal importance for the people as well as the industries and trade in the country. At the moment fuel prices are skyrocketing which has made thermal energy expensive. Pakistan targets an on-grid Alternative Renewable Energy (ARE) generation mix of 20 percent by 2025 and 30 percent by 2030.…
Sustaining the growth momentum, ensuring fiscal consolidation, managing balance of payments and ensuring debt sustainability are some of the philosophies on which the budget should be based. The budget situation does not seem to get better and the recent governments have certainly not attempted to reduce debt or develop a coherent strategy to improve the overall budgetary situation. Pakistan’s budget is out of alignment as there exist some structural imbalances. The government need to start taking action to address the structural issues within our national budget and ensuring that the revenues and expenditure match. Efforts to reverse the current imbalances…
Pakistani startups raised $174 million in disclosed funding across 17 deals in the first quarter of 2022. Compared to the first quarter of 2021, it’s an increase of 776% from $20 million. And, compared to the fourth quarter of 2021, it is an increase of 140% from $71 million. During the first three months of the year, Pakistani startups raised half of the total funding raised in 2021. It was also the best quarter for Pakistani startups ever. Previously, 18 deals totaling $172 million were recorded in Q3 of 2021. Some of the best startups that have raised funding during…
Life insurance is a key savings and investment vehicle available to public at large and Pakistan’s low saving and investment rate is a major reason for its underdevelopment. Pakistan is behind regional peers and world average in the critical indicator of investment to GDP ratio. While Pakistan’s investment to GDP ratio stands at less than 15% of GDP, Sri Lanka, Bangladesh and India’s investment to GDP ratio is 30% and above. In 2019, Sindh Revenue Board has made individual life insurance subject to 3% sales tax whereas group life insurance is subject to normal tax rate at 13% in Sindh.…
Islamic banking’s market share likely to move up in Pakistan Global outlook Islamic financing emerged 50 years ago, in countries with large Muslim populations who were keen to ensure their sources of funding were governed by the requirements of Shariah and the principles of Islam. In 2019, Islamic finance assets amounted to US$2.88 trillion, the highest recorded growth for the industry since the global financial crisis. The prospects look positive: by 2024, this is set to rise to US$3.69 trillion. While Muslim countries have turned to Shariah financing to fund their thirst for capital, another underlying reason for its popularity…
Corporate social responsibility (CSR) has become much popular in the last few years. A large number of companies issue reports on the Corporate Social Responsibility nowadays. Corporate Social Responsibility has become an important part of planning to get and sustain the competitive advantage in the globally competitive companies. Companies can gain great benefits from participating in CSR and that these benefits are the reasons for their engagement in Corporate Social Responsibility. Corporate Social Responsibility also affects the financial performance of the firms. In today’s global world, organizations have many challenges to operate and earn profits. People have more knowledge about…
Cyber security is now a critical function in organizations in the current era of online/digital business and communication. Hackers will remain on the winning side if the assets in organization are left with vulnerabilities that might eventually be exploited. In the ongoing time of COVID-19 waves, hackers are taking advantage of this confusion while attacking with ransomware and phishing at faster pace and this is very much anticipated to continue in 2022. It is not just the speed but variety of attacks that give hackers an edge over the opponents (defending teams at target organizations). Following are the top cyber…
When it comes to the health and vitality of the communities, affordable housing is the key. The need for quality, affordable homes is an important part of sustainable development goals of Pakistan. The poor management of the growth of housing cost in Pakistan has been affecting negatively in terms of finance. Therefore, reducing the effect of housing issues could be a potential benefit to both low and middle income households. The main challenge to obtain affordable housing in Pakistan is high interest rate and big gap between house prices and level of household income. Earlier on, housing sector has largely…
Whenever there is a major global technological change, the businesses that are quick to jump the bandwagon have the first mover advantage and banking industry is no exception. With the rise in online banking, the customer interaction has increased manifolds. Now payment of bills and transfer of money is possible digitally without being physically present at branches. Digital banking has therefore changed consumer preferences by providing frictionless and (near) real-time transactions. Some of the advantages that digital banks offer over conventional banks are: Convenience Agility Mobility Efficiency Transparency Accessibility Further, since digital banks have reduced overhead expenses due to lower…
In Pakistan, the health sector has been badly neglected and the policy makers have shown a callous lack of concern for educating the people and providing them with health care. People living in rural and remote areas mainly depend on primary health care facilities, like basic health unit and dispensary provided by the public sector. However, due to poor governance, lack of access and unequal resources, poor quality of health information management system, corruption in health system, lack of monitoring in health policy and health planning and lack of trained staff, the quality of life of the people has remained…
Country’s premier event facing financial and political challenges The new Chairman PCB is in turbo-mode to upgrade the infrastructure An interview with Mr. Aqeel Samar – Radio presenter and emerging commentator PAGE: Tell us something about yourself AQS: I started my media career as a Radio presenter and this passion still runs in the blood. Doing cricket commentary was always a larger than life dream as it is the best seat in the house. Back in 2006, when Muhammad Yousuf set a world record by scoring most runs in a calendar year, I requested the FM Radio producer to give me…
Aviation Industry The aerospace industry is searching for innovative results to boost its business in a sector that operates in a cut-throat competitive environment. Blockchain is a disruptive technology that has the potential to affect various stakeholders and replace current platforms. Most people associate blockchain with cryptocurrencies but it’s a cutting-edge technology that may optimize performance of aviation industry. At the most basic level, every blockchain is a digital ledger of transactions that take place on a peer-to-peer network with the ability to control access to data. The five core issues determining the adoption of blockchain by the industry are: Specific adoption…
In this article, sector specific and international trade hurdles will be discussed in detail: 2- Sector specific hurdles a) Agricultural taxation Agricultural taxation is prone to outdated political system which is mainly dependent upon the feudal system. Every government is afraid of losing the massive vote bank of farmers by aggressive taxation reforms in the agriculture sector. Interestingly, subsistence level farmers are unable to comprehend that they will be exempt in any system of progressive taxation and are thus easily exploited by the feudalism. The whole agricultural process is effectively informal i.e. from the supply of raw material to the…
The economy of Pakistan, like any other economy is of two types: 1) documented or formal economy and 2) undocumented or black economy. Documented economy connotes that the business as well as employment is registered with the relevant registration authorities, as well as taxation authorities. On the other hand, undocumented economy is not registered with the authorities and consists of the following two types: a) Legal businesses which may be unreported (for tax evasion) or unrecorded (due to practical difficulties in documentation) b) Illegal businesses activities which are restricted or banned by the state; for example, trading in alcohol in…
[box type=”shadow” align=”” class=”” width=””]Updated status on revival of Chenab Limited Recently, Chenab Group has announced revival of its business on 29-10-2021 after reversal of an earlier decision by Lahore High Court Lahore vide its order dated 13-07-2017 that pronounced the winding up of the Company in a petition filed by a small creditor of the company. The Court took into consideration Chenab’s excellent track record for the last 35 years and its great capacity to bounce back to pay all its financial obligations through normal course of business. The default made by the company in payment of debt was…
China, officially the People’s Republic of China, is the second largest economy in the world and the fastest growing trillion-dollar economy. With a GDP of $15 trillion plus in 2020, it makes up almost 20 per cent of the global economy. When compared on the basis of Purchasing Power Parity (PPP), China is the largest economy with a GDP of $27 trillion plus. At present, the size of China’s nominal GDP is lesser than that of the US but China is on the path to become a $20 trillion economy by 2024 superseding the US. Since 1949 till today, China…
Pakistan is a fairly young country by most standards. Conflicts, complications and historical political divisions have hindered its path to emerge as an influential and modern state. However, globalization along with various other economic factors have put the country in a strong position, most significantly due to its vibrant banking and finance sector. As the fifth most populous state, Pakistan is slowly and gradually becoming a significant player in South Asia. Its macro-economic indicators, however, tell a different story when one looks at its infrastructure, health, education and business environment. The slow pace of growth and development could be attributed…
With the rampant rise in E-commerce and explosion of mobile commerce, the economic playing field for women in Pakistan is changing rapidly and has a positive transformative impact on women entrepreneurs. Not challenging the culture barriers that sometimes require women to stay at home, e-commerce offers women in Pakistan the liberty to work from the comfort of their homes while expanding their online businesses and earning a livelihood. According to data from UN Women, currently only 45 per cent of women worldwide have access to the internet, while most mobile phones are in the hands of men. Moreover, women represent less…
Area-yield index insurance was first developed in Sweden in the early 1950s and has been enforced in India since 1979 and in the United States since 1993. There have been numerous attempts to establish crop insurance programmes in developing countries. Some of them have succeeded in laying the foundation for a sustainable risk management service. But there have also been failures. Most of such programs that did not prove durable were set up on the base of unrealistic prospects. Risk management is of pivotal importance in the investment and financing decisions of growers in developing countries and in transition economies. Agrarian…
Pakistan used to be one of the most often overlooked countries when it comes to fintech investments but now it is one of the countries with the most potential. The world’s fifth-most populous nation is seeing record money flow into its startups with more than $305 million this year, higher than the past six years combined. Similarly, ‘Buy Now, Pay Later’ (BNPL) model is also heating up around the globe since the start of the year. Following the hype and the scale witnessed globally, local startups have also started coming up with their own BNPL offerings. That includes QisstPay from…
There is a common saying that “cut your coat according to your cloth”. While this proverb gives a clear message to live within our available means, it also allows us to arrange a bigger piece of cloth to cut the coat according to the desired size. It is basically a call of an individual or a nation to go for i) exploiting extra resources to enjoy better living standards, ii) spend time in managing the existing resources or otherwise, and iii) start living beyond means by hook or by crook. Since the known resources are scarce with seemingly uneven distribution,…
While the economies of the world are expected to gather momentum as more and more people get vaccinated, one of the biggest cautions to consider is whether supply chains will be able to keep up with growing demand. Companies need to review critical areas to address concerns about disruptions to supply chains and shortages that have occurred during the pandemic. A major example is semiconductors. But even before pandemic, the US and China have been engaged in a trade war for over three years now. This has impacted the semiconductor industry which has a global supply chain. The intensity of…
Startups The ongoing year has been a phenomenal year for Pakistani startups as far as investments are concerned. Pakistani startups had received an investment of $77 million throughout 2020 whereas, in just 8 months of 2021, investments in Pakistani startups have crossed $228 million. That is a growth of about 3 times over 2020 with another 4 months still to go. Annual investments in Pakistani startups can reach billion dollars by 2025 if the momentum continues like this for the next couple of years. Over the last five years or more, government, academia, and industry have launched many incubators which…
The year 2021 has been even harsh for those who couldn’t recover from the shocks of 2020 due to job loss or salary cuts. Those who could stay at home and enjoy a steady stream of income should consider themselves lucky. There are many families who had to dig in their safety stock with whatever little savings they had considering the savings trend in Pakistan. While saving for uncertain times is always advisable, it is investing that will help in the long run. The first and the foremost thing is that how much cash is available at hand. One must…
Globally, fast rising trend of both external and domestic debt, emerging in 2008 and onwards due to economic recession has engulfed the entire financial world in a whirlpool of fiscal deficit both in developed and developing economies. Some of the high-income developing countries had taken radical measures to recapture their lost ground and luckily came out of quandary. However, the onslaught of Covid-19 factor has drastically damaged their economies and put them in a negative growth rate situation. The problem has, however, aggravated in case of low-income developing countries. Pakistan, in particular, where slow penetrations of aftereffects of global recession…
More than one year has passed but the battle against pandemic still continues. Governments and businesses are struggling hard to reduce the damages caused by the on-going Covid-19 pandemic to the socio-economic fabric across the world without any discrimination of rich or poor. While the analysts and medical scientists are busy in categorizing its spell into wave-1, wave-2 and at some places even wave-3, the arrival of the vaccine and marathon campaign to administer it, fortunately faded away the looming dark clouds of fears and uncertainties to a great extent. With the approval and rollout of the long awaited coronavirus…
Pakistan has been experiencing an acute shortage of energy right across all sectors especially industry and through energy disruption to domestic users. These shortages have highlighted the necessity for reliable, cost realistic and effective sources of energy and an improvement in the distribution of energy to facilitate development of the country. Pakistan currently relies disproportionately on thermal power generation from local gas fields and expensive imported oil to fuel both government and privately owned and rented power plants. Still the poor communities of Pakistan depend on wood and dried dung to heat their homes and in food preparation. Solar energy…
The overall impact of Covid-19 on food security and agricultural food systems was not known in the initial phases of Covid-19. However, during the last five months of unfolding of the diseases in Pakistan, Covid-19’s effect on lives and livelihoods, more so for the poor, is gradually making economic access to food for masses difficult. As per World Bank Group, South Asian countries may face food security challenges both in terms of supply and demand if not properly managed especially for marginalized sections in the society and Pakistan is no exception to it. Already it is understood that food insecurity…
Pakistan was somewhat unusual compared to other countries as regards the unexpected pickup in officially recorded remittances during 2020, particularly in the latter part of the year. Earlier surveys of remittance receipts suggested that remittances were falling during the pandemic. Given the massive displacement of migrants as they faced unemployment in host countries in April and May, earlier forecast expected a drop in remittances in Pakistan during 2020-21. However, despite GDP decline in sender countries due to the pandemic, Pakistan registered growth by end of 2020. Pakistan saw a growth in remittance of 17.4 per cent year-on-year in 2020. Regarding…
We created state of art platforms for flawless experience to customers Interview with Mr. Danyal Khan Afridi – Head of Operations, M A Fast Move Ltd UK (Shpun Remit) PAGE: Tell us something about yourself Danyal Khan Afridi: I started my career as a manager in hospitality and then drifted my focus to help those people who were struggling to send their hard earned money to their loved ones hence why I decided to take part in the remittances business. PAGE: Tell us something about your product and your key initiatives till date? Danyal Khan Afridi: The story starts with a few…
Commercial banks around the globe have designed and utilized Islamic financial instruments according to the rules of Shariah. Section 5(b) of Banking Companies Ordinance-1962 defines the business of banking as “banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.” By analyzing both sides of the balance sheet of any Islamic bank, it is quite clear that like conventional banks, Islamic banks can also efficiently provide most of the banking services. However, the assets-side of the balance sheet looks…
The complexity and influx of data in healthcare means that Artificial Intelligence (AI) will increasingly be applied within the health sector. Several types of AI are already being employed by providers of care and life sciences companies. The key categories of applications involve diagnosis and treatment recommendations, patient engagement and adherence, and administrative activities. Although there are many situations during which AI can perform healthcare tasks better than humans, implementation factors will prevent large-scale automation of healthcare professional jobs for a considerable period due to ethical issues. Artificial Intelligence (AI) and related technologies are increasingly prevalent in business and society,…
Human health has become a major growing concern worldwide due to infectious diseases. Biotechnology has played a dynamic role in improving the challenges regarding human health because it has flexibility to scale back global health differences through provision of promising technologies. Health, life quality and expectancy of life are increased worldwide through the services provided by biotechnology. Malnutrition mainly arises due to the lack of essential nutrients and vitamins in food and ultimately results in death. Biotechnology has played a major role in eliminating these problems by producing nutrients enriched food such as golden rice, maize, potato and soybean etc.…
State Bank of Pakistan in collaboration with Karandaaz and Bill & Melinda Gates Foundation, marked the beginning of 2021 with a digital leap forward following the launch of Raast — Pakistan’s first instant payment system that permits end-to-end digital payments among general public, businesses and government entities. The initiative is part of ‘Digital Pakistan Vision’ aimed at financial inclusion of poor segments and women of our society in the formal economy and improving tax collection. Raast is not an application or a product, rather it is a back-end payment system similar to 1link, which intends to take all banks of…
Over time, the real estate sector has marked significant economic importance. As large as the real estate sector is, it is considered equally sophisticated. Despite being one of the latest sectors to adopt innovation, technology has undoubtedly added a new dimension to the industry. The introduction of Artificial Intelligence (AI) technology revolutionized the whole industry, bringing real estate properties, innumerable housing societies, diverse housing types, changing market trends, different agents, and distinctive pricings at one’s fingertips. The history of AI, defined as of today, spans no more than a century, with the idea being roughly discussed in the 1940s and…
Collectively, financial sector’s risk indicators have significantly strengthened since the last financial crisis of 2008. In terms of capitalization, the industry boasts of a CAR of 18.7% , ADR of 46.3% and about 53% of the asset base is liquid as of June 2020. These ratios are indicative of strong loss absorption buffers while the excess liquidity available with the banks should allow them to sail through the crises. Private sector lending, which is expected to be most affected during pandemic stood at Rs. 5.8 trillion as of June 2020 out of which 8.1% was outstanding against the SME sector.…
Things finally seem to be looking good for the automobile industry, especially after the downfall caused by Covid-19. Domestic car production grew at a cumulative growth rate of 10% approx. over the past six years while weak demand due to challenging macroeconomic environment lead to a sharp decline in production in FY-20. Due to continuous slowdown in demand, all local auto manufacturers observed several non-production days in order to rationalize operational costs and maintain optimum inventory levels. Given stringent import policies being pursued by the government, car imports have declined considerably over the last two years while share of imported…
Al-Hajj to launch proton variants Malaysian auto giant Proton, which has collaborated with Al-Haj Automobile, the assembler of FAW automobiles in Pakistan, will be launching its SUV crossover X70 soon along with a sedan named Saga. The company has confirmed that it will initially launch two vehicles and will offer variants in CBU condition. Proton has received a green-field status under the Auto Development Policy 2016-21. Under the status, new companies like Proton, Kia, Hyundai, and Changan etc. will be paying less duties compared to firms already operating in Pakistan like Toyota, Honda and Suzuki. Chinese passenger car to be…
*Mera Pakistan Mera Ghar buzzword a three-pronged benefits for country’s homeless population Poor access to affordable housing results in unequal home ownership: proprietorship remains concentrated in the top income bracket, leaving a limited supply of housing for low-income households. Housing insecurity among the lower income strata of Pakistan has therefore become a pressing public policy issue. And now affordable housing has become a buzzword in Pakistan. Pakistan’s Prime Minister, Imran Khan, has promised to provide five million new affordable houses to the people in his term. Mera Pakistan Mera Ghar is a low-cost housing scheme offering affordable house financing to…
Looking at global GDP at constant prices of 2017 adjusted for cost of living/purchasing power, China was the biggest economy in the world in 2019 with an adjusted GDP of more than USD 22.5 trillion according to World Bank. While the Chinese economy is projected by IMF to grow by a low of 1.2% in 2020 due to pandemic, the US in second rank is expected to see its USD 20.6 trillion GDP decrease by 6%. Asian countries, on the other hand, exhibit best growth prospects even during the coronavirus pandemic. European economies like Germany and the UK are expected…
The outbreak of Covid-19 has been accompanied by widespread decline in global commodity prices. The pandemic presents a unique shock that has a major impact on both demand and supply of commodities. Oil markets have been most affected given the travel restrictions arising from mitigation measures and have witnessed the steepest one month decline on record. Metal prices have also fallen, albeit less than oil, while agricultural prices have been much less affected so far given their indirect relationship with economic activity. Over the short-term, in addition to weaker demand, disruptions to supply chains could cause dislocations in commodity markets,…
Digitization has become a part of everyday life with the introduction of smartphones and availability of social media. This has brought the banking industry at the verge of possibly the greatest revolution in history as it is more of a matter of life and death for this industry to get the digital banking right. Banks are already at a crossroad with the adoption of digitalization as can be seen prominently. The banks or any other financial institutions still struggle hard to maintain banking relations through physical and more traditional channels such as the physical bank building itself. However, this process…
A recent report of World Bank titled Digital Pakistan in Covid-19 Environment advocates for IT and IT enabled services, automation and artificial intelligence, which can play a more prominent role to put the economy of Pakistan back on track. In this regard, Telenor International Research Report emphasizes use of artificial intelligence and digitization for all times to come, in view of the large number of workforce, both in public and private sector working from home, resulting in saving of commuting time and less traffic on the roads, which has reduced pollution. Undoubtedly, the return of overseas workers to their countries…
State Bank of Pakistan (SBP) through its recent initiatives and actions has focused its attention on finance-deficient areas such as financial inclusion, low cost housing facility, agricultural credit, SME finance and most importantly, the Green Banking phenomenon. In accordance with its strategic policy, given the importance of SMEs being attached to our economic development, SBP is playing a facilitator’s role, aimed to increase the orderly flow of financing to SMEs. It has set the principal targets to be achieved in SME financing till 2020 for increasing SME’s share from existing 8 percent private sector credit to 17 percent by 2020…
Automotive assemblers/manufacturers The automobile industry in Pakistan includes companies involved within the production/assembling of passenger cars, light commercial vehicles, trucks, buses, tractors and motorcycles. The current market structure of the industry is concentrated. It is largely dominated by Japanese players: Toyota, Suzuki and Honda. The three players have deep rooted presence in Pakistan. FAW is a new addition to the sector. In Pakistani market, Suzuki Motors enjoys largest share of over 55% followed by Toyota (25%) & Honda (20%). New assemblers have already started their production activities, especially within the car segment. However, these newcomers as well as the incumbents…
In the global fight against financial crime, Pakistan faces complex challenges. It is not the first time that Pakistan has been placed on the grey list. In 2008 and thereafter from 2012 to 2015 Pakistan has been grey listed. In June 2018, Pakistan was again placed under the watch-list due to the gaps in its Anti Money Laundering (AML)/Counter Terrorist Financing (CTF) compliance regimes. Pakistan – as a member of the Asia Pacific Group on money laundering (APG) – has demonstrated that it takes financial crime seriously and is committed to implementing the Financial Action Task Force (FATF) 27-point plan.…
Basic mindset of any type of investor is to manage the risk and maximize the returns. The common phenomenon in managing the risk is diversification or, in other words, not putting all the eggs in one basket. The diversification requires choosing right basket to put your eggs in; and most importantly how much? The article is a compilation of tried and tested investment opportunities in Pakistan that require little investment but the returns are significant. Real Estate Investing in real estate is one of the most famous and widely practiced investment ideas in Pakistan. People buy property, especially land, and…
Pakistan is a country with limitless growth opportunity in almost all sectors, construction being one of them. The government is providing subsidy to sectors that have high positive cyclical effects. However, malpractices in the real estate sector prevent it from flourishing beyond a point that was reached decades ago. In other words, things are stagnant. For quite some time, the image of the industry is tarnished by fraudulent realtors and malpractices. People engaged in the real estate sector perceive investors as cash cows. Instead of executing a good deal that will attract potential investors, the agents wish to make maximum…
Rising urbanization and growing middle class are key drivers of FMCG business in the country In Pakistan, a large middle-class section, some 60 per cent of which is young, has been emerging and it looks for quality products and services with an expectation for value for money. In major cities like Karachi, Lahore and Islamabad, Pakistan’s rising middle class consumers are driving sales of international brand name products and services. New mega shopping malls are being opened by real estate developers and retailers. Although Fast-Moving Consumer Goods (FMCG) sector is mainly dominated by MNCs, there are a few local players…
Bykea, a four-year-old ride-hailing and delivery service, today has more than 500,000 bikes registered on its platform. It operates in some of Pakistan’s most populated cities, such as Karachi, Lahore and Islamabad. The three cities Bykea operates in have a combined population of 30 million people. Public transportation is underserved in all three cities, but these urban centers drive the economy of the 5th most populous country in the world. Auto-rickshaws are some of the most popular mode of transportation in South Asian nations. Two-wheelers are more popular in Pakistan as motorbikes are the rails for distributors, couriers, e-commerce retailers…
In Pakistan, marble and granite sector despite having abundant reserves of 30 billion tons have been operating in an unorganized manner, while primitive quarrying and processing methods are the reasons sector that could not reap its true export potential. There are over 3,000 processing units and 1,500 quarries across the country. The sector employs over 200,000 people but could only fetch US$61 million (2017) mostly through export of raw marbles and granites. Though efforts have been made in the past to uplift the sector and State Bank of Pakistan (SBP) also offered refinance facilities, however, all these efforts have not…
There are signs of business activity picking up in Pakistan at a faster pace as worries about new coronavirus (COVID-19) infections fade in the country. Pakistan is adding fewer active cases as population is fast approaching herd immunity. The economic growth is now being led by an aggregate demand push. Some of the sectors that are showing signs of pickup are as under: Construction Cement sales rose 38% from a year ago to 4.8 million tons in July, and near a record level seen in October. The government program to give amnesty to tax evaders, provided they fund construction projects,…
Real sector Agriculture: Out of Rs 1,240 billion fiscal package on COVID-19, Rs 100 billion is allocated for the agriculture and Small and Medium-size Enterprises (SME) sector. An amount of Rs 15.7 billion was initially allocated for nitrogenous fertilizers that now has been diverted to phosphate and potash fertilizers. A subsidy of Rs 1.5 billion for tractors and markup of Rs 6.8 billion on all loans for land holdings up to 12.5 acres has been disbursed by Zarai Taraqiati Bank Limited (ZTBL). Manufacturing: LSM sector (Large Scale Manufacturers) has started to rebound after the damage inflicted by COVID-19 outbreak. The monthly snapshot…
According to a recent World Bank report, remittances to low and middle-income countries are projected to fall by nearly 20 percent. In order to prevent further damage, the government must do everything to keep remittances flowing in times of COVID-19 and beyond. Following are a few actionable measures to keep remittances and development financing flowing: The remittances should be deemed as an essential financial service so that they can continue operations amidst the pandemic, allowing migrants to continue sending funds. Given the health risks, hygiene and social distancing measures must be in place at agent outlets to ensure that safety…
As the economy moves towards the end of FY20, it continues to face high uncertainty owing to the challenges posed by the COVID-19 pandemic on several economic fronts. High levels of uncertainty are also reflected in recent State Bank of Pakistan (SBP) surveys. The Consumer Confidence Survey of May 2020 recorded a sharp deterioration in both consumer confidence and expected economic conditions following their improvement in March 2020. Similarly, the Business Confidence Survey of April 2020 registered its lowest historical level for overall business confidence. Importantly, Pakistan is not an outlier in this regard, as the global economic uncertainty index…
Remittances are seeing a global boost in digital payments even while the physical ones decreased as the pandemic set in. Remitly, focused on remittances, raised $85 million for its business, while other companies like MoneyGram and Western Union are readying themselves for what could be a major, permanent shift in how money moves across borders. Digital payments have been favored as of late, as people avoid going out to public spaces due to the coronavirus. More and more fintech firms are trying to catch the digital wave and new alliances are being formed some of which are as under: UK-based…
With the world battling the novel coronavirus pandemic, the impact has been felt on every sector and everyday life. Perhaps one of the biggest effects of this pandemic has been on the financial services industry and the insurance industry. In many cases, insurers have already started taking the necessary action for protecting their businesses, which have left many consumers in the lurch in this challenging time. On the other hand, the overall reputation of insurers is taking a further battering as consumers and businesses come to terms with the fact that most insurance policies do not cover pandemics. With a…
Recently, Prime Minister Imran Khan said that rising pension bill is a far more serious problem for the government than the power sector debt. It is a fact that unfunded pension liabilities are ballooning and will become financially untenable if not contained. In a limited budget, it is already crowding out development. The pension bill in Pakistan is big but its impression of being overblown is said to be overstated. Presently, there is a lot of confusion regarding pension reforms and changes made in Directory Retirement Rules due to which many civil servants are contemplating early retirement. The pension bill…
Pakistan received workers’ remittances worth $19.62 billion in FY18 and $21.74 billion in FY19. They grew to a record high of $23.10 billion in FY20 with an increase of 7.8% during the March-June 2020 pandemic period compared with the corresponding period of 2019. The significant increase in remittances during June 2020 could be attributed to a number of factors. Since many of the countries eased lockdown in June, overseas Pakistanis were able to transfer accumulative funds, which they were unable to send earlier. Further, it is also believed that they sent remittances to support extended families and friends due to…
The coronavirus (COVID-19) pandemic will have a huge and lasting negative effect on the global economy; 2020 and 2021 will be lost years in terms of growth, and it is expected that the global economy will recover to pre-coronavirus levels only in 2022. However, this global forecast masks big disparities between countries. Some members of the G7 and BRICS groupings will recover quickly, whereas others will take up to four years to return to pre-coronavirus GDP levels depending on the level of economic shock experienced in the second quarter of a year. China will be an exception, as the country…
State Bank of Pakistan (SBP) has introduced a temporary refinance scheme for payment of wages and salaries to the workers and employees of the business concerns. SBP has extended the Rozgar Scheme for supporting employment for another three months and widens its scope in collaboration with Government of Pakistan. Rozgar Scheme This scheme provides concessional loans to businesses for wages and salaries expenses provided they commit not lay off their employees for the period of the loan. SBP has decided to extend the validity of this scheme by another three months to end September, 2020. Businesses will now be able…
The health, geopolitical and socioeconomic impacts of COVID-19 crisis are significant and catastrophic. Organizations are finding way to understand, react, and learn lessons from the rapidly unfolding events. While the effects of the exponential impact of the virus have proved to be disastrous for many organizations, it is also providing opportunities to other businesses to flourish. Following and keep continuing the Corporate Social Responsibility (CSR) of any of the organizations during the difficult time of COVID-19 may badly affected in some way. Automobile & auto part manufacturers The automobile sector was already challenged by weak demand and lower sales pre-pandemic,…
As people have embraced social distancing as a way to slow the spread of the pandemic, there has naturally been a drop-off in brick-and-mortar shopping. That would seem to mean there would likely be an increase in online shopping as people turn to e-commerce to purchase the items they might have otherwise purchased in person. In reality, e-commerce sales are not higher across the board, although some industries are seeing significant upticks. This is especially true for online sellers of household goods and groceries. A survey found out that people are spending on average 10-30% more online. While people in…
The coronavirus pandemic has lasted just over four months across Pakistan and the main question that has arisen is: Will the coronavirus accelerate the market penetration rate of e-commerce in Pakistan and get more Pakistanis comfortable with the idea of shopping online? Everyone has been saying since the last decade that the future is online: from grocery shopping to education but the way this change has been enforced has caught everyone unaware. But as the demand for online deliveries increase, and innovations such as contactless delivery become the new norm, companies are not just ramping up their efforts but actually…
The federal budget for 2020-21 is set in difficult circumstances with an exceptional degree of uncertainty generated by COVID-19. The economy was already reeling under the sharp slowdown brought on by the macroeconomic adjustment that began last July with accession to an IMF program when the COVID-19 pandemic hit in March 2020. The impact of the pandemic on countries is via three overlapping channels: – The ‘external’ economic disruption caused by the pandemic (upended supply chains, halted global transportation and logistics links, interrupted flow of goods, people, investment and capital). – The ‘internal’ economic disruption caused in response to the…
The recently released Economic Survey paints a bleak picture of Pakistani economy. Since the period covered by the data includes mostly the first nine months of the fiscal year, meaning July 2019 to March 2020, much of what is portrayed cannot be attributed to the disruptions from COVID-19. Private credit off-take Credit to the private sector fell sharply from Rs554.7 billion last year to Rs187.3 billion this year in the July to March period. This is a marked decline and shows a sharp deceleration underway in private sector activity due to “crowding out effect” as government emerged as a major…
Central banks around the world have slashed interest rates, though perhaps none as aggressively as State Bank of Pakistan (SBP). According to a recent report by Bloomberg, Pakistan has cut its interest rates the most this year, out of a survey of nine countries, including the US, Peru, South Africa, Turkey and Ukraine. Coronavirus has created ‘unique’ challenges for a monetary policy due to its non-economic origin. In last three months, SBP has slashed the policy rate four times. In the space between March 17 and May 15, the SBP has cut the policy rate by a whopping 525 basis…
There are different barriers to financial inclusion, one of these is the voluntary exclusion due to religious reasons and the other is the high cost of interest charged to small borrowers. Islamic banking seems to offer reasonable solution to these challenges where the interest is replaced with other tools based on partnerships and social cooperation. However, banks might be facing different type of challenges such as the regulation and customer reach in absence of profitable margins. The other factors impacting adoption will be to offer an economic access to the service without heavy investments from the banks, and maintain high…
Akhuwat Foundation is a non-profit company established in 2001 and registered with SECP. Akhuwat aims to alleviate poverty by creating a bond of solidarity between the affluent and the marginalized. Their goal is to develop and sustain a social system based on mutual support. They extend a helping hand to the poverty-stricken by providing interest-free loans so they can start a business and become self-reliant. Other than having more than 700 branches in almost all cities of Pakistan to conduct its operations of distributing Qarz-e-Hasna – interest-free loans – Akhuwat also uses places of worships, like mosques and churches to…
The world today is dealing with a crisis of monumental proportions. The vicious, novel coronavirus is wreaking havoc across the globe, destroying lives and ruining livelihoods. The primary cost of the pandemic as seen in the loss of human lives is distressing, but the secondary effects on the global economy, on livelihoods and on sustainable development prospects are even more alarming. The International Monetary Fund estimates that the world has entered into a recession, and while the full economic impact of the crisis is difficult to predict, the costs of the pandemic will no doubt be astronomical, with preliminary estimates…
Coronavirus is going to present unique challenges to the financial sector. Hundreds of millions of people are facing restricted movement and with them, commerce will — and is already — slowing. The financial sector needs to do two things: get money to the people who need it as fast as they can, and keep as much money in their hands as possible. Getting money to people quickly is critical. To the degree that government and private institutions are able, they should keep lending and processing stimulus payouts. Banks and agent networks need to maintain liquidity throughout their networks so households…
The New World Order implemented after the events of 9/11/2001 has changed after the COVID-19 pandemic outbreak. The details of what the world might actually look like is still being determined, however, it is safe to assume that if there was a Before Covid (BC) world, then we are actually living in an After Covid (AC) world. The following will give the readers a glimpse as to how the AC times would look like: In games of great power rivalries, we may expect China to be more assertive and US to be more belligerent. Possible dismantling of global institutions. Economically,…
Provision of disinfected currency notes by banks Recognizing the need for issuance of fit, authenticated and disinfected cash by the banks, detailed instructions have been provided by State Bank of Pakistan (SBP) to ensure to clean, disinfect, seal and quarantine all cash being collected from hospitals and clinics and to block circulation of such cash in the market. The banks shall report daily collection of cash from hospitals to SBP, which shall credit bank’s accounts for the amounts so quarantined by them. Further, arrangements are being made to provide sufficient fresh or disinfected cash to banks enabling them to issue…
Presently, Pakistan seems to be suffering from ‘Stockholm Syndrome’ – a psychological condition wherein a captive begins to identify closely with his or her captors, as well as with their agenda and demands. The obsession and the unwavering trust in multilateral agencies, including IMF, and the traditional foreign bilateral partners, particularly Saudi Arabia and the strings attached with the helping-hand ever extended by them in the past bears testimony to the fact. The first issue is that they follow their own template to address our economic challenges whilst our issues are very unique (like a typical emerging market country) and it…
The monetary policy is the key to influence trade/ current account of any country. The extent and the effectiveness of that, however, vary from country to country, given country’s own political and economic dynamics and other realities on the ground. These elements must not be used as ‘one-size, fits-all’ as part of the template to manage the economy, particularly the external account. The effectiveness of monetary policy is already under debate these days, particularly due to the outward flight of ‘hot money’. If one looks at the relationship strength between interest rate and currency in the context of Pakistan, the convention says…
The cyber security is still a challenging and diverse field and it has been evolving due to constant technology transformation and enhancement as per changing business environments, needs and practices. In the earlier stage of protecting IT systems or digital assets, primary focus was on ‘perimeter security defense’ against outside threats as lots of capital and investment was made on perimeter controls like firewalls, intrusion detection systems, proxy servers, etc. to avoid the cyber criminals. Recognizing that perimeter defense alone is insufficient, now ‘layered defense’ is being adapted to confront insider threats as well because nowadays and in future most…
The coronavirus has presently affected more than 100,000 persons worldwide. This fast widespread of the virus impacts several business sectors including that of insurance. The pandemic won’t be affecting life insurance in 2020 and as per Moody’s agency estimates, the impact of the pandemic on global reinsurers will be limited, i.e. the consequences will only be significant only at very high levels of gravity. For property and casualty insurance, the impact of coronavirus will be minimal since standard insurance policies do not cover communicable diseases. However, insurers covering the cancellation of high magnitude events e.g. the Olympic Games are more…
The present government is striving to improve its citizens’ quality of life and economic well-being by ensuring availability of accessible, affordable, reliable, universal and high-quality Information and Telecommunications Technology (ICT) services. It believes in mass adoption of emerging digital technologies and innovative applications to enable cross-sector socio-economic development and transformation of economic activities, governance models, social interaction, and achievement of sustainable development goals. It was in this backdrop that Digital Pakistan Policy was announced. The aim is to make Pakistan more digitally inclusive and use technology for the greater public good. Based on five strategic pillars (which include access and…
Foreign direct investment in telecom The telecom sector has been a star performer lately when it comes to foreign direct investment. The sudden rise in telecom FDI this fiscal, however, owes mainly to the license renewal. Telecom companies have made partial payments to renew their right to operate in Pakistan. The government, meanwhile, pocketed valuable non-tax revenues to meet IMF targets. There have been rounds of inflows and outflows in the telecom sector but since the ministry is vacant, the government needs to come up with some ideas for sustaining high level telecom FDI as there are plenty of avenues.…
The new digital economy has redefined the business landscape. Successful traditional businesses are at a huge risk of not only losing their dominant position but going out of business. Technical advancements, ubiquitous connectivity, proliferation of mobile devices combined with our understanding of how humans interact with machines and software has allowed creation of not just new businesses, but increased process efficiency within all industries. Today, we have the convenience of getting what we need through online marketplaces and highly usable mobile applications that essentially serve as remote controllers, to perform most tasks in both our personal and professional lives. While…
One of the key policy objectives of Digital Pakistan Policy is promotion of innovation, entrepreneurship and incubators/start-ups in IT sector through: Generation of sustainable innovation, entrepreneurship and employment opportunities for the country’s rapidly growing technology savvy and entrepreneurial youth. Conducting digital skills programs for the human resource development in current and emerging technology domains. Collaboration with international partners to boost innovation. Setting up venture capital funds to hold national level competitions on regular basis in all key emerging technologies and applications. Establishment and building a framework for setting-up incubation centers in provincial capitals and major secondary cities facilitating IT startups…
Logistics companies are facing an era of unprecedented change as digitization takes hold and customer expectations evolve. New technologies are enabling greater efficiency and more collaborative operating models; they are also re-shaping the marketplace in ways that are only just beginning to become apparent. New entrants, whether they be start-ups or the industry’s own customers and suppliers, are also shaking up the sector. For the logistics industry, we start by taking a closer look at some of the key disrupting factors: changing customer expectations, technological breakthroughs, new entrants to the industry, and new ways to compete or collaborate. These disruptions…
Today’s businesses have increasingly become fast-paced. Highly demanding customers seek instant gratification on one side, and businesses, in a quest to do more with the finite resources on hand, try to optimize and accelerate their supply chain, on the other side. All this means not just larger volumes to process, but also a significant increase in the number of issues warehouse and logistics management needs to deal within a day. Side-by-side, competitive pressures means squeezed margins, leaving warehouses without the luxury of spending more to cater to the increased workload. Logistics is a precision business, where success depends on making…
State Bank of Pakistan (SBP) has been actively engaged in development and promotion of Islamic banking in the country through various policy and regulatory initiatives. In continuation of earlier efforts to augment the industry’s progress, State Bank of Pakistan has developed detailed guidelines for conversion of existing conventional banks into full-fledged Islamic banks. Eligibility criteria The eligibility criteria for conversion of conventional bank into Islamic bank shall be as follows: All banks having Islamic banking division/branches can apply for conversion into full-fledged Islamic bank. The bank which has not yet been granted approval by SBP for Islamic banking division shall…
Doing business in Islamic way requires Muslims to undertake transactions free of Riba (interest), Gharar (uncertainty), Maisir (gambling) and non-Halal (prohibited) activities. Islamic banks are, therefore, forbidden from taking or offering interest or usury. Unlike in conventional banking, a lender in Islamic finance should shares the risk of the project with the borrower, as neither the borrower nor lender controls the outcome of the venture. This risk sharing in financial contracting by replacing ex-ante fixed return, with an ex-post uncertain return based on a profit-sharing principle, differentiates Islamic from conventional banking. Under this profit and loss sharing (PLS) paradigm, only…
The much debated Electric Vehicle Policy will be integrated as a part of Auto Development Policy (ADP 2016-2021), which would comprise of investment plans, standardization of equipment, the promotion of localization, generating exports in the long run to have a positive impact on the national economy. But the EV policy seems to have more problems than solutions and agreements. The uncertainty of the policy is also making the investors of ADP 2016-2021 take a backseat. Meanwhile, the auto sector faces recession each day as the policy gets delayed. The Ministry of Climate Change is putting in its best efforts to…
Mass production of Hyundai Porter H-100 pickup Hyundai Nishat Motor (Private) Limited announced its mass production at the assembly plant in Faisalabad. With an annual production capacity of up to 15,000 units per annum in its initial phase, Hyundai’s manufacturing plant is now fully operational. The HNMPL plant is the new production home for Hyundai’s first ‘Make in Pakistan’ product, the Porter H-100 Pickup, with other exciting range of models to follow in near future. The new plant allows them to serve the transportation requirements of Pakistan’s market, with world class Hyundai’s product line that enjoys a strong legacy in…