Globalization has made the world shrink into a small unit where action of one country can easily be felt by other countries due to connected deeds irrespective of borders. International affairs in general and economic activities in particular, among the countries are very important these days as they need to be understood for alignment with the changes coming rapidly. Great Depression of 1935 and global meltdown of 2008 are a few examples found in past, which depict that most countries feel the heat of the crises of global economic activities. Presently, Brexit and trade war between China and United States…
Author: Ahsan Nisar
By the time these lines will go in print, World Bank must have issued their Ease of Doing Business Report 2020 in which Pakistan is likely to improve its ranking from 136th position out of 190 countries. Considering the current state of the national economy and the highly pessimistic economic prospects projected for the current and subsequent years in the short run by various national and multilateral organizations it is indeed a matter of immense satisfaction that the World Bank has listed Pakistan among the top 20 countries that introduced reforms in ease of doing business. The World Bank declared…
The policy for oil and gas exploration & production could be described as confused at best. Although the government has eliminated the quota system and is preparing a draft in order to separate the functions of policymaking, regulation and administration of the exploration and production (E&P) sector, still it would be an uphill task to streamline the policies and procedures prevalent since last few decades. Simplification and elimination of redundant steps for getting approval to start drilling activities in potential areas will attract further investment. The petroleum sector has been divided into five key areas, which included oil and gas,…
Though fuel prices in Pakistan are largely driven by international oil prices, the relationship between the prices of the various fuels is not very obvious. The administrative intervention often distorts the pass-through of international prices to domestic Petroleum Oil Lubricants (POL) prices, despite the fact that oil prices have been officially deregulated since June 2011. The government administers the tax and levy rates to cover the fiscal deficit or to enforce certain political considerations. For example, the government may increase tax rates instead of passing on the benefits fully or partially to the consumers when global oil price declines. Similarly,…
Pakistan’s Information Technology (IT) sector has a promising future with its talented youth, and is poised to become the largest export industry of the country. With more than 30 percent population between the 15-20 year age brackets, Pakistan is touted as one of the financially attractive destinations for outsourcing services. Pakistan-based IT firms are serving the world’s leading aeronautical and space research organizations, National Aeronautics and Space Administration (NASA) and international governments to protect them from cyber threat. Presently, the government is striving to increase exports, reduce imports and create import substitutes in order to bring balance between foreign earnings…
Key Lessons The Doi Moi economic reforms of the late 1980s helped the country move away from its centrally planned economy towards globally market oriented economy. This contributed to a stunning growth rate of about 7 percent for three decades. This experience provides some important lessons, which can be helpful for other aspiring export powerhouses, including Pakistan: Continuity in economic policies with strong political will can help change economic outlook The consistency and continuity in policies helped Vietnam give a strong positive signal to stakeholders, who benefited from a stable business environment. With a democratic governing structure, Pakistan can also…
Auto industry was the highest tax-paying industry during the last government’s tenure followed by cigarette, tobacco, telecom sectors. Presently, the automobile industry is going through worst crisis amid rising prices due to imposition of new, higher taxes in the budget and steep currency devaluation in the recent months and now the government is expected to receive less tax by Rs150 to Rs200 billion from the industry due to the emerging situation. In the current situation of economic crisis, the auto manufacturing giants in the country are halting their vehicle production, thus leading to a direct impact on the auto vendors…
Eating out is a great privilege and perhaps one of the only available forms of entertainment available in Pakistan. Various options are available in the form of food festivals, pop-up restaurants, home-based food businesses, road side cafes and ‘dhabas’ etc. which shows that the food culture is thriving. With the devaluation of Pak Rupee, purchasing power has seriously been affected due to high inflation and stagnant wages. This, in turn, may directly affect the food business if it has not been affected already. In a bid to reduce food imports and boost local industry, the government has imposed sizable duty…
When thinking of ride-hailing or taxi apps, the first thing that probably comes to one’s mind is Careem or Uber. However, things have changed a lot on the transportation landscape since 2015 and thee some more and fast moving companies that have moved in to solve the transportation issues of Pakistan: Siayara Siayara is a new online taxi service that will cater to people looking for inexpensive transport in Karachi. Initially, they have started with 2,000 cars divided into four categories – eco-mini, eco-, eco-plus, and eco-business with reasonable fares and 24 hours service. The company aims to introduce a…
Supply chains have grown incredibly complex over the years. Any supply chain progresses by initially delivering the raw materials from a supplier to a manufacturer and eventually ends by delivering the final product to the consumer. Proper implementation of supply chain management can result in benefits like increased sales and revenues, decreased frauds and overhead costs, quality improvisation. Moreover, this will also lead to accelerating production and distribution. Maintaining a supply chain is a tedious task even for small businesses. The interconnectivity of different elements in the supply chain gradually becomes more inefficient when a business grows. In order to…
Poverty is a multi-faceted fabric which involves economic, social, cultural and psychological dimensions. It is a worldwide phenomenon whose consequences are dehumanizing, devastating and traumatic. In the light of this, and recognizing the importance of the devastating effect of poverty and inequality, the awareness is much more favored at the international level of finance and governance. Poverty results from over population, low economic growth, unequal distribution of wealth and most importantly, low per capita income. This, coupled with poor health, people in third world countries get low productivity due to which they are mostly unemployed. Such poverty can only be…
National Bank Of Pakistan National Bank of Pakistan (NBP) is one of the largest commercial banks of Pakistan and Corporate Social Responsibility (CSR) is an integral part of NBP’s corporate policy. It has institutionalized by creating a separate division and running a full-fledged CSR program to bring positive change and improving quality of life of underprivileged members of our society. The prime area of focus for CSR initiatives are education, health, woman & child, special persons, culture & relief for affectees of natural disasters. NBP has contributed in the ‘health’ sector by providing financial and equipment support to MALC Leprosy…
With the emergence of e-commerce and rising digital literacy among the consumers, the global logistics industry has been changing significantly in the recent years. Factors such as rising disposable incomes, dual-income households, and constant urbanization have encouraged consumers across both developed and emerging economies to follow upcoming logistics trends. This has further resulted in the rapid development of retail channels requiring efficient inventory management and warehousing solutions for helping the customers to make informed purchase decisions. From e-commerce deliveries to restaurant chains to service providers, the logistics industry is constantly evolving. The latest developments involve technology-based management to reduce expenses…
Any single risk event can wreak havoc on a company’s operations, and a combination of multiple issues can totally collapse an organization. The number of potential hazards is growing every year. The first category includes taxes, tariffs, geopolitical issues, natural disasters and other events that fall beyond control of most companies. Tactical issues include problems with the supply base, a customer going out of business, and so forth. The final category includes day-to-day issues like a lack of labor, business process problems or failing internal systems. Following are the top five potential supply chain risks that should be on every…
Television has become one of the most influential socializing agents of our times. There are many who complain about the content that is being shown on television and there are also many who respond to this by saying, “If you don’t like what’s on TV, then don’t watch it.” It is similar to saying that “if you’re bothered by air pollution, just stop breathing.” There have been many debates about television corrupting society as well as there being proposed solutions to how to solve this problem. Some feel that television has no effect on society, while others feel that television…
Pakistan is a sports loving nation. However, this love is not limited to just one or two sports only. There are a few sports that are quite popular in Pakistan and time and again, we have shown the world that there is no dearth of talent. Many of these are played at both national and international level; however, due to lack of proper infrastructure and facilities, the talent which Pakistan can produce is not exploited to its full capacity. Pakistan has a rich sporting history. Over the years, different sports in Pakistan have seen their golden days and some sports…
Green Economy Today Pakistan is facing numerous environmental problems such as global warming, ozone depletion, crowded cities and pollution. The universal solution in general and Pakistan in particular, has no other option but to address these problems by planting more and more trees and making the nation greener and eco-friendly. A growing trend in business is the emphasis on sustainable ‘green’ business practices. Going ‘green’ means many things to different individuals as well as to different business enterprises. On one hand, it could mean reducing energy use or supporting the use of alternative energy sources, reducing greenhouse gas emissions and…
Pakistan is blessed with unlimited natural and marine resources. Pakistan’s 1,200 kilometers lengthy coastline with the Arabian Sea is a god gifted area with natural harbors. It is a mid-sea section which joins the strategic oil line of the Persian Gulf with the Indian Ocean. Pakistani sea ports join the trade routes between East and West which could be helpful to boost the economy of country. However, there are many issues that plague the maritime and fishery sectors for long. Since Pakistan lags behind in technology; sustainability is impossible, which leads to massive wastage. The Deep Sea Fishing Policy has…
There has been a constant debate about Pakistan’s credit risk lately and all sorts of theories and analyses have been volunteered to make a case that the credit risk of Pakistan has been deteriorating for the last few years based on one pretext or the other — starting from abnormally high debt levels to GDP growth not being the best judge of economic progress, etc. The world economies have been getting more and more integrated over the past few years and the case of Pakistan is no different. The constant improvement in the external and internal debt mix has also…
The contribution of American MNCs in Pakistan has been very significant not just in monetary terms but from qualitative angle as well. There are over 200 American entities operating in Pakistan under various sectors such as banking, energy, FMCG, agriculture and pharmaceuticals etc. A number of these companies are listed on Pakistan Stock Exchange (PSX). Some of the selected US companies are as under: Logistics (Uber, FedEx, Hertz) Financial services (CitiBank, JP Morgan, VISA, AIG) Technology (Oracle, Microsoft, IBM, Teradata, TRG, Nielsen) Pharma (Abbott, Pfizer, Lilly) Oil & Energy (Chevron, LMKR) Food and beverages (Coca Cola, Culligan, McDonald’s, Dunkin Donuts,…
The advancement in technology, over the last few decades, has completely changed the outlook of the world and so our lives. From using ATM machines to paying online bills, from ordering favorite food to sending out invitations, from booking cabs to giving feedback to a restaurant… everything is happening on fingertips. In short, greater part of the world has been digitized. The ultimate usage of digital resources in our lives gave rise to e-commerce businesses. Today, by just typing the name of any top-leading brand on Google will land you on their e-commerce website. This enormous advancement has made it…
Household savings are key to ensuring financial wellbeing, especially in countries like Pakistan, that do not have well developed social security nets. Emerging middle-class is rising as a consumer class that will play a significant role in the development of consumption-led economies. They are the consumers who are earning enough to start saving and investing and that’s what makes them a crucial engine for economic growth. They have a lot of pressing reasons to save: longer life spans, rising cost of education, health care and property. And they do save actively; two-thirds put aside for their top priority every month,…
Over a period of time, particularly in the last decade, National Savings has transformed itself from a retail debt raising arm and the source of infrastructure funding of the government into a formidable vehicle for financial inclusion, particularly women, and a provider of social security to the vulnerable sections of the society. Pakistan has one of the lowest saving rates in the region which has direct relationship with the economic growth rates. Whilst National Savings, as an institution, contributes less than 1% towards the GDP and around 10% in the Domestic Savings to GDP Ratio of 7.5%; however, there’s substantial…
Pakistan’s extremely blessed to have abundance of coal, natural gas and water resources and all these could very well be the main fuels at different points of time, now and in future. But, it is also true that Pakistan has been faced with power crises and its multiplier effect on the economy for decades. There are basically two main issues: Transmission & Distribution (T&D by DISCOS) and generation. Solutions for the two divisions are very different given, of course, the distinct nature of the two businesses. The solution to take care of the generation is a bit more complex and…
Predicting the oil prices is a million dollar question; in fact, it’s a game of billions of dollars literally. The task is difficult because of involvement of too many economic variables but sometimes it gets even more difficult because of global politics. Global storage capacity has enhanced and this has become the single biggest business opportunity for the investors, particularly in Pakistan, as that would determine the energy security levels and dependence on the international oil supplies and the price volatility in future. The oil price movement is largely dependent on the global politics. This is also a fact that…
Mobile Money The global financial sector is witnessing a significant transformation due to technological progress and the role it has played. Over a span of decades, various technological innovations have led to new business models and products including new methodologies to conduct financial transactions; from the invention of ATMs to Core Banking Systems and now Peer to Peer Lending. In the recent decade, technological progression has exponentially increased as compared to past decades. The race of innovating a financial product equipped with technology having more efficiency and more customer centric has led to introduction of new business models. Fintechs are…
Mobile devices (smartphones and tablets) have clearly been the main driving force behind the country’s recent surge in internet users, which has almost doubled from 2016. Taking note of mobile’s influence over the Pakistani population, a lot of mobile-wallet options have popped up during the past few years. These services offer anything from online transactions to quick and easy transfers using NFC to online bill payments and much more. Mobile finance apps are becoming ubiquitous across the world. Mobile banking is of huge importance, for example, in Africa, where smartphone penetration is high and growing exponentially, a generation of “unbanked”…
Taxation on agriculture income has been a debatable issue in Pakistan since long owing to its intricate democratic structure. Since our agriculture system is dominated mainly by large landholders, the elected candidates do not pass the necessary legislation to collect what is due under the existing tax laws in order to appease the feudal. The history dates back to pre-partition times when colonial rulers created and protected feudal loyalty and even today mainstream political parties show no interest in alienating feudal support. Agricultural income falls in the provincial domain and is subjected effectively to a tax on land. All the…
Lot of area in Pakistan is lying uncultivated which is boosting the tractors industry in Pakistan. Population is growing day by day hence increasing the need for food, clothing and shelter. Agriculture sector is the backbone of Pakistan creating opportunities for a prosperous country. Decrease in average yields is creating problem at the other end. Lack of mechanization techniques in agriculture especially machinery is pushing us backward in high production per acre. Use of agri machinery like modern tractors will increase the efficiency and will make harvesting processes faster. The agriculture sector in Pakistan has been facing a number of…
Nation-building is referred to the process of getting all the citizens involved in the socioeconomic prosperity of a country. However, it is youth which is considered as nation builders in its truest sense. The young minds have passion, energy, acceptance for new innovative ideas, dreams and hope. According to a recent report, 64% of the population in Pakistan is below the age of 30. Furthermore, 29% of the total population comprises people aged between 15-29 years. This is quite a healthy sign. However, if not utilized, the same young minds can create serious problems for any country. Today Pakistan faces…
Currently, Pakistan is one of Asia’s fastest growing internet markets, with over one million people going online via mobile phones every month. The e-commerce market has similarly witnessed phenomenal growth recently, driven by the country’s large population, rising middle class, and strong digital adoption rates. It is growing at a compound annual growth rate (CAGR) of over 100%, and as per Google’s analysis, it will surpass the $1-billion revenue mark by 2020. Access to capital has remained a big challenge for entrepreneurs. High impact entrepreneurs are the building block of a healthy economy as they can change the world by…
The present government unveiled its first full budget with total outlay of Rs. 7.022 trillion for FY 2019-2020. Following is the backdrop in which the budget was announced: High fiscal deficit @ 6.5% of GDP. Current account deficit highest in recent history @ 6.3% of GDP. Significant budget spent on debt servicing. Depleted forex reserves; insufficient for 2 months of imports. Economic growth rate @ 3.3%. Inflation @ 8.8%. SBP policy rate @ 12.25%. Weakest currency in Asia. According to government, the budget is based on the following guiding principles: Managing the external deficit. Reduction of fiscal deficit. Enhanced collection…
The recent budget for FY 2019-20 has outlined incentives for some industries while other may feel the pinch. On a macro level, the gainers and losers are as follows: Gainers Furniture Tourism Paper/Packaging Pharma Telecom Losers Steel Textile Sports Cement Surgical Tobacco Cottage Auto Leather Carpet CNG Beverages On a micro level, it appears that the urban middle class is likely to get hit by the budget. The rising inflation and higher taxes will squeeze both nominal and real income of all tiers of the middle class. The massive depreciation (worst form of taxation) has already eroded the value of…
Pakistan is blessed with unlimited natural and marine resources. Pakistan’s 1,200 kilometers lengthy coastline with the Arabian Sea is a god gifted area with natural harbors. It is a mid-sea section which joins the strategic oil line of the Persian Gulf with the Indian Ocean. Pakistani sea ports join the trade routes between East and West, which could be helpful to boost the economy of country. However, there are many issues that plague the maritime and fishery sectors for long. Since Pakistan lags behind in technology; sustainability is impossible, which leads to massive wastage. The Deep Sea Fishing Policy has…
Hutchison Ports KICT is Pakistan’s leading deep water container terminal. The new facility is the closest Pakistan port to the shipping lanes in the Arabian Sea. Its prime location offers the shortest steaming time from the Fairway Buoy, and will bring real benefits to customers, relating to time, cost, reduction in risk of delays, and reduced carbon emissions. It has been in operation since 1998. It has three berths equipped with modern container-handling facilities. Hutchison Ports KICT is a member of Hong Kong based Hutchison Ports, the port and related services division of CK Hutchison Holding Limited (CK Hutchison). Hutchison…
Of all the tax amnesty schemes announced, the last tax amnesty scheme was unique in this respect that it was the first scheme that dealt with assets held abroad by Pakistani nationals. These schemes have been issued from time to time appeasing different stakeholders each time, from salaried middle class to vehicle importers and then small traders. There are two issues with launching such schemes: first, there are all kinds of people who are not paying taxes — businessmen, drug dealers, terrorists etc. The government will want only the first type to avail the opportunity; otherwise there is a chance…
The five biggest challenges the international money transfer industry is facing in 2019 would break down something like this: Globally significant events If one puts the technology and the emerging world of FinTech to one side; in many ways the overseas money transfer industry will always be most affected by major world events and the modern day industry is no different. Global political and economic factors affect not only the FX industry, but also the remittance industry. Events such as Brexit, an escalation in the US China trade war, developments in war zones like Syria, changes to the global supply…
1- If one looks at the remittances figures in FY19, overall increase in volumes from the US and UK will be observed. The valuation effects of the US dollar appreciation against the currencies of remittance-source countries, especially the rupee, influence the impact of growth in remittances. The continuing recovery in the US and a modest acceleration of economic activity in Europe are producing a general increase in overall volume.Coupled with fairly stable prices and competition mostly based in the forex spread, the traditional MTOs have been more optimistic in 2018-19 than in previous years. But, as is common knowledge, the…
According to World Bank, the growth of Islamic finance has been rapid at 10-12 percent annually over the past two decades, with the industry surpassing approximately US$ 2,500 billion in size by 2018. Islamic finance has emerged as an effective tool for financing development worldwide, including non-Muslim countries. Accordingly, Islamic financial institutions are gradually becoming an integral part of the financial system. Growth is expected to be maintained by the banking needs of over 1.5 billion Muslim customers globally as an alternate to conventional banking. Allied Bank Limited Promoting Islamic Banking amongst vast potential customer base remained part of ABL’s…
When we talk about implementation and practice of Islamic economic system as a whole, we must look at every aspect of Islam as well. Marketing is one of the most important aspects of economics having a wide meaning and sense. Marketing involves each and every action that one performs during the time of production to selling or offering goods and services to the people. Therefore, the concept of marketing is the integral part of economy and without the concept of marketing; the economic practice cannot be performed. Marketing involves the process of attraction and awareness of certain product or service…
Pakistan’s first-ever official report on multidimensional poverty was released in 2016, and it revealed shocking figures. According to the study, 39 percent (38.8%) of Pakistanis live in multidimensional poverty, while 24.4 percent of those don’t even have enough money to satisfy their basic needs. It was in this backdrop that the government launched ‘Ehsaas’, a poverty reduction program, developed by Dr. Sania Nishtar, with aims to change the lives of at least 3.3 million poor people in the next four years. The government has allocated a massive amount of Rs. 80 billion –expandable to Rs. 120 billion by 2021 –…
FINCA In 2008, the bank was founded with a mission to alleviate poverty in Pakistan. FINCA provides state-of-the-art deposit and payment solutions including micro-credit facilities aimed at improving livelihoods in Pakistan. Khushali Microfinance Bank Founded in the year 2000, Khushhali Microfinance Bank Limited was a part of the Government of Islamic Republic of Pakistan’s Poverty Reduction Strategy and its Microfinance Sector Development Program (MSDP). MSDP was developed with the facilitation of Asian Development Bank (ADB). With its headquarters based in Islamabad, Khushhali Microfinance Bank (KMBL) operates under the supervision of the State Bank of Pakistan (SBP). Apna Microfinance Bank Apna…
A trade deficit occurs when an economy is importing more goods than it is exporting. The deficit equals the value of goods imported less the value of goods being exported. For example, Pakistan is importing goods worth USD 15 billion from China while exporting goods worth USD 1.8 billion only, the trade deficit with China would be USD 13.2 billion. However, a country’s net receipt and payment positions are computed with the help of other accounts known as current and financial accounts which are then totaled to arrive at the balance of payments figure. The current account is used as…
Markhor (Footwear) Shoes, crafted from leather by hand, are being produced by Markhor in Okara and picked up all around the world since 2010. The brand is named after an endangered breed of wild goat Markhor that is natively found in northern and central mountainous regions of Pakistan and Central Asia. This remarkable export activity is the result of the hard work of two young entrepreneurs, Sidra Qasim and Waqas Ali. Over eight long years, they have successfully identified indigenous shoe-making talent, built its capacity to an international standard and found a market for its products beyond Pakistan. Food &…
Qatar is endowed with major hydrocarbon reserves, especially in relation to the size of its population. Nearly all of its gas reserves are contained in an offshore gas field called the North Field which is the largest, single natural gas deposit in the world. Combining Qatar’s reserves of gas, crude oil and condensates equated to 172 billion barrels of oil equivalent making it the world’s largest LNG exporter and the world’s richest country in terms of GDP per capita. Qatar invested heavily in liquefied natural gas (LNG) in the early 1990s. The sector experienced rapid growth, particularly through continued investment…
When insurance progressed considerably, insurance companies found themselves committed to huge sums having been insured. They realized that in case of a catastrophic loss, they would go bankrupt. Therefore, the need of reinsurance was felt very keenly, and it came into existence and specialist reinsurance companies were established. Every insurance company now has to arrange for reinsurance before starting business and taking on big commitments. For example, suppose an insurance company insures a factory for one hundred million rupees. In case of total loss, it will be beyond the capacity of the insurance company to pay this loss. The insurance…
As compared to Europe, Pakistan is a market with low insurance penetration and a limited variety of distribution channels. Bancassurance is on the rise, particularly in emerging markets as its outlook remains positive worldwide. In many markets, bancassurance is the primary mode of distribution of insurance products. It is also fast catching up in markets in the far-east, India and the Middle East. While insurers have been successfully leveraging bancassurance to gain a foothold in emerging markets, there is potential for banks to leverage customer base to generate risk free income from non-interest sources. Standard Chartered Bank Standard Chartered Bank…
The world is changing rapidly and to compete with other nations we need to adopt new technologies. The last 3G/4G spectrum auctions for telecom services happened in 2014. Pakistan has already been successfully experiencing 3G and 4G mobile broadband technologies and the number of users is increasing every day. Rapidly increasing demand for high bandwidth telecom services has moved into gaining pace towards 5G testing in Pakistan. Undoubtedly, introducing 5G will be a positive sign for Pakistan as it would open a new arena for smart devices and ensure career and investment opportunities in Pakistan during upcoming years. Mobile broadband…
After a decade of launching regulations for branchless banking that enabled the entry of telecommunication companies into the arena of banking and payments, SBP recently launched regulations for Electronic Money Institutions (EMIs). The document outlines objectives and scope of regulations, licensing procedure, governance arrangement, Capital Requirement, funds safeguarding arrangements, customer due diligence use of agents and interoperability. The regulations also cover other regulatory requirements including outsourcing activities, AML/CFT, consumer protection, complaint handling mechanism, oversight and regulatory reporting etc. The launch of EMIs regulations was the first step of SBP’s strategy towards embracing technology and innovation in digitizing banking & payments.…
Human capital is acquiring a more significant role in economic development. In a fiercely competitive international market, industrially advanced countries import cheap, skilled and highly educated professionals to reduce costs and enhance productivity. Labor-importing countries save money on the high cost of skills training and education of professionals. The demand for workers in labor-deficit countries fluctuates with economic cycles but does not perish. Mobility of capital and the growth serve as a magnet for attracting both domestic labor and foreign manpower. Saudi Arabia and the United Arab Emirates (UAE) host the bulk of the Pakistani labor force abroad and, hence, send the most remittances back to Pakistan. The emigration…
Gwadar soon will become ‘base station’ for import and export of oil to Middle East Saudi Arabia has shown a keen interest in China-Pakistan Economic Corridor (CPEC) primarily to relate its economy with China and take steps in achieving its Vision 2030, which aims to diversify the economy with energy mega projects to reduce oil dependency. This would also utilize the unique location of Gwadar to become a global hub for vast economic activities. CPEC would provide the Saudis with an opportunity to participate even better in world trade traffic. Saudi Arabia will also be able to help China have a better crude oil…
Pakistan is rich in eye-catching scenic beauty. As the place abounds with diverse culture, traditions, historical places, beautiful valleys, attractive tourist spots, beaches, historical civilizations and much more, Pakistan is an ideal travel destination to visit. Pakistan is home to one of the world’s oldest historical civilization that ranges from Mohenjo-Daro, Harappa and Taxila and these prove to be archaeological allures for many local and foreign tourists to witness the great civilizations of all times. The Mughal era and its archaic architecture has also left its mark on the history of the subcontinent. Monuments like Badshahi Mosque, Jahangir Tomb, Lahore Fort,…
“The nation that will insist upon drawing a broad line of demarcation between the fighting man and the thinking man is likely to find its fighting done by fools and its thinking by cowards” (William Francis Butler) Pakistan is facing a complex multi-dimensional situation with multiple possibilities after its stand-off with India. Only few weeks earlier, Pakistan was intensely engaged in the Taliban-US negotiations with the Saudi Arabia in the backdrop. Then, the twin suicide attacks, one in Sistan, Iran and the other in Pulwama, India-held Kashmir, left Pakistan in a diplomatically vulnerable position. A closer analysis will reveal whether these events were…
Recent anti-encroachment drive aims to crush institutional corruption and building of cartels Profit margins have shrunk due to increase in cost of input and taxes Interview with Muhammad Ejaz Taj — CEO, T. I. Marketing, T. I. Properties & 9T9 Advertising (T. I. Group of Companies) [box type=”shadow” align=”” class=”” width=””]Profile: Muhammad Ejaz Taj holds a Master’s degree in International Relations and Political Science and Diploma in Public Administration from Karachi University. He has also completed ISO 9001/9002 certification in Quality Management & Marketing. He has a working experience of more than 19 years in various diversified capacities including property…
More women in Pakistan are riding the wave of technological change sweeping the world. Following entrepreneurs have come up with apps which allow them to run their businesses independently. Sidra Qasim – Markhor Shoes, crafted from leather by hand, are being produced by Markhorin Okara and picked up all around the world since 2010. The brand is named after an endangered breed of wild goat Markhor that is natively found in northern and central mountainous regions of Pakistan and Central Asia. This remarkable export activity is the result of the hard work of two young entrepreneurs, Sidra Qasim and Waqas Ali. Over eight long years,…
An age-old saying is that the most important asset of an organization is its workers. If this saying is valid, and it is, then handling a work force becomes vital for the organization. Managing people is a continuous process from the time people join an organization until their retirement — and at times even beyond that. In smaller businesses, this job is done by the owner (proprietor) himself, whereas in large-scale organizations, it is the responsibility of the management. The importance of people management is undoubted but at the same time, managing human beings is indeed a delicate, complicated and a difficult job.…
“And We sent down iron, wherein is great military might and benefits for the people……….” (Al-Quran 57:25) “And make ready against them all you can of power, including steeds of war (tanks, planes, missiles, artillery, etc.) to threaten the enemy of Allah….” (Al-Quran 8:60) One of the most important stimuli for the military revolution was the discovery and use of iron. Iron weapons were heated and hammered into shape rather than cast, making them stronger, less brittle, and more reliable than bronze weapons. The importance of iron in the development of ancient warfare does not lay in its strength or…
In Pakistan, a slowdown in the construction industry is already visible in the recently announced financial results of the listed cement companies. The effect of reduction in local consumption may hit the local steel industry harder, which is already suffering from a slowdown in the economy. It will be very difficult for steel industries to pass on the sudden rise in input cost to consumers without negatively affecting the revenue. Currently, many companies such as Aisha Steel and International Steels are going through the expansion cycle due to the expected rise in demand from the China-Pakistan Economic Corridor (CPEC), construction…
Halal food is a large segment serving the global Muslim population, while also gaining attention of a wider global audience. The Halal market has, for many years, been uncharted territory. In terms of market research, trade data and analysis, and the preferences and spending habits of 1.6 billion consumers, the halal marketplace is still a very young, continually evolving commercial arena. It is, in effect, a new market paradigm that crosses geographic, cultural and even religious boundaries. To meet the Halal requirement, food producers are encouraged to follow the standards that in line with global benchmarks, such as ISO-9000, Codex…
The global Halal food market reached a value of USD 1.4 trillion in 2017. The growth of the global Halal food market is being primarily driven by health benefits offered by Halal food items which is continuously influencing the eating patterns of people. This has resulted in an increase in the consumption and acceptance of Halal food among non-Islamic communities as well. Moreover, food producers have been offering a wide variety of Halal food to consumers which has been positively stimulating the growth of the market. The consumption of such food items is also increasing due to a surge in…
National Bank of Pakistan With long term vision & focus on digital banking, a new Group was recently formed within the Bank by the name of Payment Services & Digital Banking Group “PSDBG” to ensure that NBP is not only at par with its peer banks but is also capable of leading the industry on the road to digitalization. PSDBG has not only initiated multiple technology deployments but also captured businesses, which also places NBP in a competitive position in this arena, especially in G2P & P2G business. Key initiatives include: Designing & strategizing the long-term Digital Strategy of the…
Although P2P network is still only a small part of the global banking landscape, a number of convergent trends are powering its growth as an industry. The youth are increasingly eager to transact online round the clock. The ‘Big Data’ has removed banks’ information advantage and the need for expensive infrastructure. Current low interest rates have raised alternate investment profile. P2P providers are able to provide better services as compared to conventional banks. P2P seems to represent real competition in what has been a closed market for a very long time. For investors, P2P providers can offer better returns than…
Habib Bank of Pakistan (HBL) has renewed its contract for next three years with Pakistan Cricket Board (PCB) as the official title sponsor of Pakistan Super League (PSL). The new deal is worth three times more than the original agreement signed ahead of the fourth edition of the glittering tournament PCB is likely to receive around $14.3 million as part of the new sponsorship deal whereas in 2016 this amount was $5.2 million. Many other companies are the sponsors of different teams. Following are some of the benefits of PSL for the sponsors: Heightened quality brand awareness as a very…
In this article, we will try to take a look at the various Twenty20 international leagues that are being played/launched around the world: Pakistan Super League: The PSL is easily the most ambitious project ever undertaken by the Pakistan Cricket Board and is seen as the ideal tonic for salvaging the declining standards of Pakistan cricket. Both critics and former players feel that PSL is a huge step towards reviving international cricket in the country after the ghastly 2009 attack on the Sri Lankan cricketers in Lahore had effectively put an end to all foreign teams’ visits to Pakistan.The PSL,…
Remittances have remained a big source of foreign currency inflows, which partially help finance foreign expenditure, import payments and debt repayment. While the remittance gap between the formal and informal channel is narrowing, at the same time, the gap between remittances and exports is also narrowing down on our external account. This signifies the importance of remittances and efforts need to be made on part of the government to recognize it as an industry. But focusing on remittances doesn’t mean that we should not address the outstanding structural issues and constraints faced by our exports sector which, in fact, is…
For the past 50 years, Pakistan’s export sector is confronted with some structural issues, like lack of value-addition and dependence on few sectors and products (we’re virtually a three-product exporting country), which will take some time to address, at least medium to long-term. No matter how much we devalue our currency, our exports cannot be increased in their present form. We have devalued our currency by almost 35 percent in just one year and yet our exports have fallen. This will give an idea of our export competitiveness and also about how little devaluation helps our exports. So, it is…
The recent positivity in stock markets came after the government announced the second supplementary budget withdrawing critical taxes on capital markets, lifting the ban on purchase of vehicles by non-filers of income tax returns and facilitating industry, agriculture and small and medium enterprises. The government has extended a range of reforms intended to stimulate exports, increase investment in capital markets and resolve outstanding issues pertaining to the Gas Infrastructure Development Cess (GIDC) and tax refunds. The budget is positive for capital markets, as it will reduce the cost of doing business and generate volumes which will encourage investors to participate.…
Human capital development inevitable for manpower export and remittances With the contribution of human capital in total wealth growing globally, the creation of a skilled labor force that is more productive and better able to adopt and adapt to new technologies is at the core of a long-term growth path for Pakistan. To this end, improvements in education and learning need to go hand in hand with improvements in health and well-being to maximize the cognitive potential of both men and women in the population. Pakistan has made progress on these fronts, but it is uneven and slow. If Pakistan…
Ardent interest of Saudi Arabia Pakistan wants to develop Gwadar not only as an economic hub but also an oil city consisting of oil refineries and petrochemical complexes under CPEC. Gwadar’s port is being developed as part of the $64 billion China-Pakistan Economic Corridor, an ambitious plan to build energy and transport links connecting the western Chinese region of Xinjiang with the Arabian Sea via Pakistan, as part of Beijing’s broader Silk Belt and Road initiative.The 80,000-acres mega oil city at Gwadar will be used to transport oil from the Gulf region to China through the Gwadar port. This will…
Economic role of natural gas Pakistan’s primary energy supply mix clearly shows natural gas as playing major role in country’s economic development by accounting for nearly 50 percent of its total primary energy supply mix. Pakistan’s natural gas production has remained stagnant at nearly 4,000 mmcfd during the last decade. Over last few decades, Pakistan has developed a formidable gas sector. Its economy has so far survived due to abundant initial gas discoveries. The natural gas market of Pakistan is among the biggest in Asia and is somewhat comparable with the size to France and The Netherlands. Pakistan was gas…
Education is the basic right of every citizen living in any country and this right is provided amicably by all developed countries on a priority basis. But in Pakistan, consumers of educational services – parents and students – have been left with little choice or idea when it comes to seeking higher education. Higher education is a powerful and essential tool for building a modern, knowledgeable, cultured and peaceful society. It imparts in-depth knowledge related to different spheres of life. By giving a wider perspective of the world. Higher education is no longer a luxury, it is essential for survival.…
Interest in learning from Asia’s high-performing education systems has grown rapidly in recent years. But the lessons from Asian education systems do not relate to what helped them achieve their high scores on international comparative tests, but to the efforts they have engaged in over the past few decades to transform their educational practices. These efforts are often mistaken for policies and practices designed to produce the high academic performances indicated by international tests. In reality, they are intended to create a different kind of education, an education deemed necessary for cultivating citizens in the twenty-first century. In other words,…
Automotive manufacturing sector is the backbone of engineering spectrum in any country but when compared to many developed countries, our automotive sector is still at infancy level. In Pakistan, automobile sector is mainly lead by the Japanese manufacturers i.e. Honda, Toyota, Suzuki, Yamaha, yet due to the implementation of Automotive Development Policy (ADP 2016 -2021) some Western and Korean players along with Chinese are entering into the market but till now the Japanese players dominate. With a contribution of 4 percent to GDP and despite a decline of 57 percent in market value from its peak in May 2017 due…
The auto policy 2016-21 indeed seems to be revolutionary for the automobile industry and it seems that the monopoly of local Japanese automakers will soon end in Pakistan. Many new automakers are entering Pakistani market and ready to give tough competition to the existing ones namely; Toyota, Honda, and Suzuki. Following are the new companies seems to do investment in Pakistan: RENAULT Renault Pakistan has acquired an industrial land in Faisalabad to set up the assembly plant to manufacture vehicles in the country. The expected five cars that Renault will launch in Pakistan are Duster, Captur, Lodgy, Pulse and Kwid.…
Apart from managing the twin deficits (fiscal and current) in 2019, the government will be on its toes to clear two important tests: One is the stabilization program to be signed with the International Monetary Fund (IMF) and the second is the review of the Financial Action Task Force (FATF) for the possible removal of Pakistan’s name from the grey list. Presently, the government is resisting the temptation to exercise the IMF bailout option, but if it finds the fiscal deficit becoming unmanageable, it will be left with no other option than to implement some unpopular but extremely crucial economic-reform…
The new year is on track to be one of the toughest economically and financially that Pakistan has witnessed in recent times. As 2018 comes to a close, all global economic forecasters have revised down the expected economic performance of the country citing shrinking foreign exchange reserves and a high debt burden among other factors. The government has marginally succeeded in managing to get critical dollars from friendly nations. The secured breathing space better positioned Pakistan’s economic managers to bargain with the International Monetary Fund (IMF) regarding conditions that are perceived to be unduly harsh and politically costly. Currently, only…
The year 2018 was a unique year in the history of Pakistan as it witnessed a new political party coming into power which, since 1988, was being shared predominantly between two political parties including an 8-year period of General Pervez Musharraf’s rule (1999-2007). With the transition of power completed in August 2018, the second half of the year mostly saw the reversal of populist decisions taken by the outgoing government during their last budget presented in May 2018. The present government (quite literally) finds itself caught between the devil and the deep sea as the timeline for conclusion of talks…
The above table gives a snapshot of banking industry performance at the close of third quarter of CY2018. From the table, key industry figures could be summarized as below: 1. Assets: PKR 16,728 Billion 2. Deposits: PKR 12,937 Billion 3. Equity: PKR 1,255 Billion 4. Advances: PKR 6,861 Billion 5. Branches: 12,519 6. CASA: 74.2% 7. CA: 37.6% 8. Net Interest Margin: 3.5% 9. ADR: 53% 10. Coverage: 86.3% 11. Gross infection: 7.5% 12. Net infection: 1.1% 13. Capital Adequacy Ratio: 14.8% 14. Cost to Income: 62.7% Assets The big five banks lead the way with Habib Bank Limited on top (PKR 2,627 billion)…
In the wake of widening external deficits, dwindling reserves and uncompetitive exports in the back drop of political uncertainty, the million-dollar question that arises is where to invest in 2019? While the economic managers are still busy understanding the sector-wise impact of the recent fall in the rupee’s value, meanwhile, investors keep themselves away from taking long-term positions in stocks. Even foreign investors, whom everyone expected to swoop in to pick up stocks in the event of rupee depreciation, have continued to keep their wait and watch policy. Conventionally it is considered that when people get high return in terms…
Pakistan heavily relies on imported energy – petroleum oil and fuel gases – to run the economy. According to estimates, it meets around 70 percent of energy needs through imports. Energy imports comprise around one-fourth of the total import bill of the country. Pakistan imported energy fuels worth $5.17 billion, which was over 27 percent of total imports of $19.04 billion in first four months (July-October) of the current fiscal year, according to the Pakistan Bureau of Statistics. Imported crude and refined petroleum products make 82-83 percent of Pakistan’s total consumption. Domestic crude oil production is 33 percent of the…
The OPEC-led group of oil producers announced a supply cut of 1.2 million barrels per day (bpd) in crude oil supply from January 2019, measured against October 2018 output levels. The move follows a more than 30 percent collapse in oil prices that saw international benchmark Brent crude fall from more than $86 a barrel to a 13-month low of $57.50 last month. The oil market is heading for another streak of volatile trading, in part due to competing priorities by the world’s top three producers. While some analysts believe international oil prices will average $60 a barrel in 2019,…
No.1 passport UAE has overtaken Singapore and Germany as the country with the world’s most powerful passport. According to Passport Index, UAE passport holders are now able to gain entry to 167 countries without obtaining a prior visa — 113 countries visa-free, and another 54 using visas on arrival. The UAE passport was on 27th position in December 2016, and now has attained first place globally in December 2018. The number one spot in the Global Passport Index was achieved just as the UAE celebrates its 47th National Day and its achievements since 1971. The exceptional achievement on 1st December…
In less than two years time, Expo 2020 Dubai will welcome the international community to the UAE for a six-month celebration of human ingenuity and progress, allowing millions of people to experience the world in one place. The upcoming Expo 2020 will be a global celebration of the UAE. A total of 190 countries have confirmed their participation at Expo 2020 Dubai. Countries that have already unveiled their pavilion plans include Austria, Brazil, the Czech Republic, Finland, Germany, the UK and Switzerland. The confirmation of 190 international participants is further testament to the UAE’s stature on the international stage and…
The critical juncture at which the present government was formed may prove to be a bane or boon for Pakistan which could be witnessed in the days to come. On one hand, it is confronted with corruption, taxation and fiscal issues on the domestic front whereas on the international front, foreign policy issues (relationship with the US, China-US trade feud etc.) dominate. The present government has to walk a very thin line between prioritizing and balancing national interests with international relations. Now that the 100-days period is over, all stakeholders wait with their fingers crossed as to what lies ahead!…
An International Monetary Fund (IMF) mission led by Harald Finger visited Islamabad from November 7-20, 2018 to initiate discussions on a financial arrangement with the IMF requested by the Pakistani authorities to support their economic reform program. Discussions will continue in the coming weeks towards reaching staff-level agreement by mid-January 2019. Despite deepening balance of payment crisis, the government claims that it is not in an urgent need of IMF funds. This is in sharp contrast given the recent visits to Saudi Arabia, China, UAE and Malaysia by the premier haven’t materialized into a significant aid package. If the government…
Nowadays, a lot of changes are happening in the remittance and money transfer industry. Margins on remittances are declining. Competition is increasing. Pre-funding costs are going up. Consumers are demanding real-time settlements. Cost of acquiring new customers is going up. Bigger, well-funded players are now entering the money transfer arena. Regulators are becoming more strict and vigilant. Fines are being slapped with higher dollar values, etc. If one has to transfer the money from country A to B, he or she could do so by using the “brick and mortar” model or “digital app” model. But the minimum amount that…
The outlook is facing increased uncertainty. In this global context, Pakistan’s economy continues to expand while vulnerabilities mount. Agriculture, industry and services supported GDP growth from the supply side. Consumption continues to drive growth, while investment demand remains sluggish. Accumulating macro imbalances point to vulnerabilities on the external front as well as on the fiscal front with implications on debt levels. Inflation remained within target, with the State Bank of Pakistan (SBP) tightening monetary policy in H2FY18. GDP growth is expected to decelerate in FY19. Structural reforms are needed for long term growth. A sustainable fiscal policy over the medium…
Recent anti-encroachment drive aims to crush institutional corruption and building of cartels Profit margins have shrunk due to increase in cost of input and taxes Interview with Muhammad Ejaz Taj — CEO, T. I. Marketing, T. I. Properties & 9T9 Advertising (T. I. Group of Companies) [box type=”shadow” align=”” class=”” width=””]Profile: Muhammad Ejaz Taj — CEO, T. I. Marketing, (T. I. Group of Companies) “Muhammad Ejaz Taj holds a Master’s degree in International Relations and Political Science and Diploma in Public Administration from Karachi University. He has also completed ISO 9001/9002 certification in Quality Management & Marketing. He has a…
With the contribution of human capital in total wealth growing globally, the creation of a skilled labor force that is more productive and better able to adopt and adapt to new technologies is at the core of a long-term growth path for Pakistan. To this end, improvements in education and learning need to go hand in hand with improvements in health and well-being to maximize the cognitive potential of both men and women in the population. Pakistan has made progress on these fronts, but it is uneven and slow. If Pakistan is to grow in an inclusive manner, the government…
According to World Bank’s Doing Business Report 2019, Pakistan carried out three business reforms during the past year to help create jobs, attract investment and make the economy more competitive. This year, Pakistan advances 11 places to 136th place on the ease of doing business global ranking. On the measure of absolute progress towards best practice, Pakistan improved score to 55.31, from 52.78 last year. The reforms of the past year covered the Doing Business areas of starting a business, registering property and resolving insolvency. Substantial reforms at both federal and provincial levels over the past year have contributed to…