Profit issue 25 by Profit (by PT)

8 Weekly Roundup 12 ‘Let public schools give us a run for our money’ 22 Will Indus Motor be able to kill two birds with one Vios

30 30 Chiniotis mean business! 36 Gaslight at the end of PSX tunnel KK Shahid

38 Suspending people and businesses 40 Giving it a go

Managing Editor: Babar Nizami l Joint Editor: Yousaf Nizami l Contributing Editor: Farooq Tirmizi l Business Editor: Agha Akbar Editor Reporting: Farooq Baloch l Reporters Aisha Arshad l Arshad Hussain l Usman Hanif l Syeda Masooma l Ahmed Ahmedani Director Marketing: Zahid Ali l Regional Heads of Marketing: Muddasir Alam (Khi) l Zulﬁqar Butt (Lhr) l Mudassir Iqbal (Isl) Design & Layout: Rizwan Ahmad l Illustrator: ZEB Photographers: Zubair Mehfooz & Imran Gillani Publishing Editor: Arif Nizami Contact: proﬁt@pakistantoday.com.pk

CONTENTS

“Pakistan will continue to encourage the private sector to engage in agricultural research” Minister for National Food Security and Research Sikander Hayat Khan Bosan

QUOTE

BRIEFING

“Infrastructure has been given priority in Karachi Development Package announced by the government” Sindh Governor Muhammad Zubair

growth was recorded in sales of automobiles during September. Local car assemblers, including LCVs, Vans and Jeeps, managed to sell 18,798 units in September 2017, despite a contraction of 15 per cent on a sequential basis.Cumulative industry sales during the first three months of fiscal year 18 exhibited 27 per cent growth to 60,470 units which are on track for our full-year target of 236,000 unit sales. Looking at OEM’s individually, Honda (HCAR) continues to outperform peers in terms of 24 per cent YoY growth of in September due to the success of new models Civic & BRV. Albeit sales lagged on a monthly basis (-27 per cent) as Honda’s plant was shut down for a longer period (compared to others) due to clumping of Eid and Muharram holidays. In the first quarter, 2017-18 Honda’s sales grew 56 per cent to 12,606 units. Suzuki’s (PSMC) sales were up 22 per cent YoY as price-conscious models Mehran (+43 per cent YoY), WagonR (+60 per cent), & Cultus (+33 per cent) all exhibited healthy growth. Cumulative Q1 sales were up 30 per cent YoY for PSMC to 32,777units. Toyota’s Indus Motors (INDU) lagged behind peers with only 4-5 per cent growth in September Q1 due to production constraints.

17pc

$20m

were collected during the first quarter of financial year 2017-18 by Federal Board of Revenue (FBR). Growth of 20pc was recorded during the aforementioned period compared to same period last year (SPLY). Finance secretary stated that as per the provisional data, the FBR tax collections remained robust. Due to increased tax collections, the amounts transferred to the provinces also increased substantially. As compared to transfers of Rs 416 billion last year this year the total transfers have so far reached Rs 570 billion, including arrears. The meeting was informed that on the expenditure side, the federal government maintained strict fiscal discipline. As against total expenditure of Rs 914 billion in the first quarter last year, the federal government spent Rs 894 billion in the first quarter this year. This was despite the fact that increased investments were carried out through the development budget. The overall budget deficit was recorded at Rs 324 billion in the first quarter this year as compared to Rs 438 billion in the same period last year. This was made possible through robust tax collections and lower expenditure.

is being invested by 1839 Ventures, an Austin based venture capital firm, has launched a Venture Capital Fund for the technology startups in Pakistan. Recently, 1839 Ventures announced to invest $ 20 million in technology-based startups. Since the announcement comes through PITB Chairman, Dr Umar Saif, it is expected that PITB will be a major stakeholder in decision making and scout for the startups in Pakistan. We have reached out to PITB to get more update on this. The announcement was made at the Atx+Pak launch event held at Austin City by 1839 Ventures. This development will play its role in reshaping ecosystem of technology startups of Pakistan. The launch of venture capital fund with the association of Plan 9, PITB’s Tech Incubator and 1839 Ventures will open a gateway for Pakistani entrepreneurs to develop their innovative ideas under this shelter.

Rs765b

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“Only an enabling environment can attract prospective investors to undertake new investment initiatives in the textile industry” APTMA Chairman Aamir Fayyaz

QUOTE

40MW

coal-fired power plant of Maple Leaf Cement’s subsidiary Maple Leaf Power Limited has commenced operations, said in a notification sent to the bourse. The notification read that it will help the company meets its power requirements and add another reliable source of uninterrupted power supply which would contribute in enormous savings in power cost. It will help in improving its margins and reduce dependence of electricity from national grid. Maple Leaf Cement was incorporated in April 1960 and the company is listed on the Pakistan Stock Exchange (PSX). It is a subsidiary of Kohinoor Textiles Limited. MLCF is in the business of producing and selling cement.

increase in regulatory duties has been imposed on 731 items via a statutory regulatory order (SRO) issued by the federal government. This is part of the government’s strategy to curb imports, which is twice the number of exports and has contributed to the country’s widening current account deficit (CAD). Profit had reported earlier this month that the government was initiating a plan to slap regulatory duties on import of luxury items and mobile phones, which would help restrict imports. In March, the government had passed measures to reduce the imports of non-essential items like mobile phones, vehicles, cigarettes by demanding 100pc of the cash upfront from importers, but it didn’t restrict imports in any given manner. The issuance of this SRO revealed that several items including confectionary, toiletries, fruits, electronic items all the way up to cars will be impacted by the slapping of regulatory duties, which would make these items more expensive and hence discourage their imports.

10pc-50pc

is the rate at which Pakistan’s economy is expected to grow, said World Bank’s South Asia Economic Focus report. n Pakistan, economic growth is expected to accelerate to more than 5 percent this and the next year provided country’s fiscal deficits remain well managed and external stability is maintained. Efforts to reverse the trade and fiscal imbalances and continued implementation of reforms will be needed for sustaining and accelerating growth and improving welfare. After having led global growth for over two years, South Asia has stalled and fallen to second place, after East Asia and the Pacific region. The slowness in growth has been attributed to temporary shocks and longer-term challenges, said the report. The reasons for the slowdown in growth, especially in India have taken place due to internal factors such as fall in private investment, increase in exports and government spending. South Asia’s growth will fall to 6.9pc during 2017 from 7.8pc in 2016, and will rise again to 7.1pc by 2017 provided the right policies and reforms are undertaken.

5pc

is Pakistan’s total debt, said Parliamentary Secretary for Finance and Revenue Rana Muhammad Afzal told the National Assembly. Responding to various supplementary questions during question hour, the secretary said the debt was under the limit of Debt Limitation and Responsibility Act. He brushed aside that hefty loans were taken by the government which could not be paid. Afzal said the national economy was stable and foreign reserves stood at over $ 20 billion adding that it was mere $ 8 billion in 2013 when the incumbent government took charge. The revenue collection witnessed 40 per cent increase during the last four years and it would be further improved, he said. Replying to another question, he categorically said that a proposal was under consideration to devalue the currency.

$62.5

30pc widening of the trade deficit was recorded during first quarter of financial year 2017-18. It touched Rs9.09b during July and September, compared to $7b in same period last year (SPLY).. During September, trade deficit touched $2.8b rising 22pc from SPLY. Pakistan’s trade deficit had touched an all-time high of $32.85b during FY 2016-17, recording annual growth of 37pc. To rein in imports, Economic Coordination Committee (ECC) had given go-ahead to imposition of regulatory duties and incentivize exports on all non-essential and luxury items. Exports continued their resurgence which started from March 2017, registering rise of 10.84pc during July-September to touch $5.172b from $4.67b in SPLY. In September, exports registered a yearly increase of 8.9pc to touch $1.67b.

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“Lack of development in agriculture has made production difficult and inefficient, aggravating poverty” All Pakistan Business Forum President Ibrahim Qureshi

QUOTE

$2b

loans obtained by the government during first half of 2017 were legitimized without taking definitive approval from the cabinet. The federal cabinet also waived off 10 per cent tax on interest payments to foreign lenders. Interestingly, the federal cabinet has taken such retroactive actions for the second time in the past nine months. In February this year, it regularised $2.7 billion in foreign commercial loans. During the first half of 2017, the Finance Ministry signed eight agreements with foreign banks and got $1.965 billion short-term loans to support the already brittle foreign currency reserves. However, all of these agreements were signed without obtaining approval of the federal cabinet. The ministry is obligated to take prior approval under the Rules of Business of 1973.

rise in foreign direct investment was recorded for the first quarter (July-September) of financial year 2017-18 to touch Rs661.9m. In September 2017, the country received $ 204.8 million as direct investment, while investors pulled back their investment worth $ 61.7 million in the same period, the data released by the State Bank of Pakistan (SBP). Foreign private investment stood at $ 583.7 million up by 29.5 per cent in last three months compared to $ 450.9 million in the same period last year. During August 2017, the SBP has recorded outflows of an amount of $ 49.6 million in the head of Foreign Public Portfolio Investment (Debt Securities), which further decreased by 154.7 per cent during July-Sept 2017 which was in plus at $ 90.8 million in the same period last year, the data said. In portfolio investment (Equity Market), the country recorded an outflow of $ 78.2 million in July-Sept this year compared with an inflow of $ 27.5 million in July-Sept 2016.

56.3pc

37pc

$4.8b

Rs12.77

increase in funds disbursement from the federal government to provinces during first quarter of current financial year 2017-18. The federal government transferred an amount of Rs 570 billion, including arrears, to the provinces during the current fiscal year compared to the transfers of Rs 416 billion during last year, according to latest data. The revenue collections during the first quarter of the current financial year increased to Rs 765 billion, showing robust growth of over 20 per cent in comparison to same period last year (SPLY). Finance Secretary Shahid Mehmood briefed the meeting that as against the total expenditure of Rs 914 billion in the first quarter last year, the federal government spent Rs 894 billion in the first quarter this year, despite the fact that increased investments were carried out through the development budget.

was remitted by overseas Pakistani’s during the first quarter (July-September) of financial year 2017-18. A State Bank of Pakistan (SBP) statement here on Tuesday said that during September 2017, the inflow of workers’ remittances amounted to $ 1,293.88 million, which is 33.79 per cent lower than August 2017 and 19.75 per cent lower than September 2016. The country-wise details for the month of September 2017 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $ 308.05 million, $ 302.77 million, $ 171.9 million, $ 194.76 million, $ 141.02 million and $ 45.07 million respectively compared with the inflow of $ 437.87 million, $ 361.9 million, $ 211.14 million, $ 210.22 million, $ 182.18 million and $ 43.60 million respectively in September 2016.

per unit multi-year tariff was fixed by National Electric Power and Regulatory Authority (Nepra) for K-Electric. This multi-year tariff will be enforceable for a period of seven years which started on July 1st, 2016 and ends on June 30th, 2023. K-Electric announced higher-base tariff wouldn’t affect end-consumer tariff in line with uniform tariff policy applicable across the country. While announcing its decision, Nepra said KElectric will seek the services of an independent engineer to conduct heat rate tests within six months once the tariff gets notified. The regulator will be involved in the selection process and appointment of the engineer. Heat rate tests conducted by the hired engineer will take place in presence of Nepra’s professionals.

BRIEFING

By: Agha Akbar and Syeda Masooma eir to the four-decades-old Beaconhouse School System, and so much more, Kasim Kasuri comes from the most eminent family of Kasur in politics – with both his grandfather (Mahmud Ali Kasuri) and father (Khursheed Mahmud Kasuri) having served in the federal cabinet, in the 1970s and 2000s as influential law and foreign ministers respectively. Post-modern in approach, Kasim is convinced that there is a constant need to redefine the concept of student assessment and teaching techniques to make education more meaningful and practical in line with the changing world phenomena. “The more you move towards the cutting edge in the field of education, the further away it moves.” Acutely aware of the challenges of operating in the education sector in Pakistan, Kasim is not just proud of the initiatives and accomplishments of Brand Beaconhouse, he sounds keen to continue to conquer new frontiers. Disarmingly candid and forthright, he communicates well – with conviction and passion. At the same time, he couches his opinions about the curriculum, teaching policies and the politics of education with quite visible care – something foisted on him by an ‘intolerant’ society. As CEO, he is not only proud of the

IN THE EVER-EVOLVING AREA OF EDUCATION, WITH THE GOVERNMENT HAVING WASHED ITS HANDS OFF IT, WHILE PRIVATE INSTITUTIONS HAVE MADE HAY BIG TIME, THROUGH CONSTANT INNOVATION AND UPGRADING TO STAND UP TO SPEED WITH THE RAPIDLY CHANGING TIMES, IT CANNOT BE DENIED THAT THE SCHOOLS FOR THE PRIVILEGED ALSO MAKE THE DIFFERENCE way Beaconhouse has made a mark ahead of the competition, but also of the CSR activities that it engages in, which, he adds, are little known to the general public. He very well realizes the dearth of quality in public sector education, and therefore looks forward to the opportunity when “government schools give us [private schools] a run for our money”. He snaps at allegations on the private sector for making education unaffordable for the lower strata of the society, though he concedes that the perception has stuck because his own Beaconhouse and other leading schools have failed in presenting a counter-narrative “because no one private school is willing to come forward and talk about this issue.” Profit sat with Kasuri in his well-appointed office for an in-depth conversation on the state of education in Pakistan – the challenges, opportunities, and the future outlook for students of today for the world of tomorrow.

Celebrating 10 Years of Beaconhouse in Malaysia with his mother Nasreen M. Kasuri and other company officials in 2012.

Profit: Beaconhouse is perhaps the largest educational institution in the private sector in Pakistan. What difference do you think your schools have made to the society and secondly where have you taken Pakistan's education overall? Kasim Kasuri: Well, in 1975 my mother – still involved in Beaconhouse at a strategic level – founded the Les Anges Montessori and then in 1978, the one good thing that Gen. Zia did was allowing the private sector to enter primary and secondary schooling. Nationalising such institutions some years earlier under Bhutto had set us back a few decades. There were only a few private schools in the 1970s such as Aitchison College and a few other missionary schools in Lahore; the situation was similar in Karachi, Rawalpindi etc. Very few people had the contacts or resources to get their children enrolled in these elite missionary or pre-partition schools. And everybody else who was not able to get in had no option but to rely on the public sector schools. The launch of Beaconhouse and its success paved the way for others to follow suit – like LGS and City. I don't want to single out Beaconhouse, as others too have made a tremendous contribution to education in Pakistan as well. Across generations from the Quaid-eAzam to Nawaz Sharif, to Benazir Bhutto and Imran Khan, most of our political leaders and standout personalities who made an impact at the national or global level were products of private schools – whether forprofit or non-profit. So were our celebrated scientists, doctors, musicians, actors, the Oscar winners, and those who entered the international job market and also multilateral institutions. It is mainly the graduates of private schools who gain entry into the world’s leading universities, and go on to

EDUCATION

win laurels for this country. So, the contribution of private schools is immense and cannot possibly be over-emphasised. I believe schools like ours have played a major part in nation-building. Yet we take the flak because private schools have not been able to present a counter-narrative to the ‘fee issue’. There is no effective spokesperson for private schools, and individual schools do not want to come forward because they shun the spotlight. That’s why I maintain that we have failed in showcasing not only the contribution we have made in this country’s development, but the immense cost and challenges inherent in operating private schools. We have also failed to disabuse the completely incorrect notion of how much money private schools make! To give you just one example, private schools spend hundreds of millions of rupees on school security (armed guards and supervisors, posts on rooftops, airport-style walk-through gates, raised walls and razor wire, visitor screening rooms, female security officers, etc), yet this expense is neither known by parents, nor charged to them. We are forced to spend this money because the government, which should provide security to all schools, has flatly refused to do so, even though it is the legal, moral, and constitutional duty of the government to provide security to all citizens… not ask those citizens to create their own security. I was pleased to learn recently that the government is creating a special security force for CPEC… I believe they should do the same for the children of this country. While Beaconhouse should be given the credit for paving the way in 1978 by being the first private educational institution to enter primary and secondary schooling, our contribution in a number of areas is noteworthy. For instance, professional development of faculty. Before Beaconhouse, there

8 UNITED KINGDOM

1 PAKISTAN

(Cherub Nurseries and Preschools, Pocklington Montessori Nursery, Newlands School)

(approximately 150 private schools in more than 30 cities)

7 BELGIUM Beaconhouse operates in Belgium as an international company with independent divisions

BSS

operates in

6 UAE Acquired Gulf Nursery in Sharjah, in 2009 . Entered in a public-private partnership with Abu Dhabi Education Council. Launched Beaconhouse Newlands in Al-Warqa, Dubai.

countries 5 THAILAND (St George's International School)

(11 schools in Malaysia, all of them in or around Kuala Lumpur. 7 are preschools and 4 are primary and secondary schools.)

3 OMAN 1 school in Muscat in Sep 2006, through a joint venture between Beaconhouse UK and a local Omani group, Al-Kanz Education.

4 PHILIPPINES (Dame Theresiana de Montealegre School in Manila, St Paul Learning Centre, in Cebu City, Partner with the Angels in Heaven school in Cabuyao, Laguna)

Began in 1975 as Les Anges Montessori Academy with 19 toddlers, now there are about 300,000 fulltime students pre-school to post-graduation

were no formal teacher training opportunities in Pakistan. In 1978, there were few, if any trained teachers, and not much expertise in training them either. My mother recognised the urgent need for it and negotiated with universities in Scotland and England – because they were ahead of the curve in this area globally – way back in 1978 to train our teachers. Their trainers

‘TODAY WE ARE THE LARGEST EMPLOYER OF PROFESSIONAL WOMEN IN PAKISTAN. THIS IS ALSO ANOTHER CONTRIBUTION THAT PRIVATE SCHOOLS COLLECTIVELY HAVE MADE: CREATING TREMENDOUS EMPLOYMENT OPPORTUNITIES FOR WOMEN IN PARTICULAR AND IN GENERAL AS WELL’ 14

2 MALAYSIA

used to come in and train our teachers. Then there were also local teachers because Beaconhouse is very big and it is not possible for all the teachers to be trained by foreign trainers. Even today we have the largest teacher training program in the sector. For us, this has its downside too, as other schools try to poach our teachers. Today Beaconhouse the largest employer of professional women in Pakistan. This is also another contribution that private schools collectively have made: creating tremendous employment opportunities for professional women in particular and for others in general. We were also the first to have purposebuilt school campuses in Pakistan. In the past, all our schools operated out of residential facilities converted into schools – and

even today, many of our schools function in that way. But no matter how good these converted properties are, it is difficult to provide essential-for-school facilities in a residential building. For instance, standardised classrooms, science lab, playing fields, a swimming pool and so on cannot be created in a residential building… although I feel that there are certain advantages that smaller schools offer, especially for children in the early years We were also the first ones to start using technology in the classrooms, including computers and programming languages, way back in the 1980s. Technology is now ubiquitous, but back in those days to the best of my knowledge Beaconhouse was the first school that started to teach students how to use computers. Presently it's more about using technology to enhance the curriculum and support the overall learning process, such as using the Internet to allow students to work along with pupils from other countries, using robotics and developing Apps etc. The use of technology is very different these days. But way back in the 1980s we made a major contribution in this area. We also brought new learning approaches to Pakistan over the years – Les Anges Montessori Academy probably being one of the earliest to adopt the concept in this country. IB (International Baccalaureate) is another in terms of embracing new ideas and pedagogies, as is our adoption of the Reggio Emilia approach. Q: Do you think you have taken education to the cutting edge? KK: Education is an area that is ever evolving. There is a lot more that we are doing that is in the pipeline. I don't know if it is

Entities under the

BSS Beaconhouse School System BeaconhouseNewlands

1 3

Gymboree Play & Music

Concordia Colleges

Premier DLC Beaconhouse Estate

9 11

ever possible to be at the ‘cutting edge’ because the closer you move toward it, the further the ‘edge’ goes. We have been organising events to understand and evolve the requirements of the world of the future. In 2005 we arranged ‘Rethinking Education’, with Dr Roger Shank as the keynote speaker. Shank is a radical thinker who

‘IN 2016 AT LAHORE, WE HAD ABOUT 200 SPEAKERS FROM DIFFERENT FIELDS – EDUCATIONISTS, FUTURISTS, ENVIRONMENTALISTS, ENTERTAINERS, SCIENTISTS, FASHION DESIGNERS AND CELEBRITIES. TITLED ‘THE WORLD OF TOMORROW’, IT WAS MEANT TO ENVISAGE HOW THE WORLD OF TOMORROW IS GOING TO BE DIFFERENT FROM THE WORLD OF TODAY, AND WHAT ROLE CAN SCHOOLS PLAY IN MAKING THAT HAPPEN’

TNS Beaconhouse

The Educators

The Early Years (TEY)

Discovery Centre Smart School

Beaconhouse National University

Premier Trading Services (Pvt) Ltd (commercial wing of the group involved in printing and supply of books, stationery and uniforms, and the management of school canteen services and staff cafeteria)

maintained that everything in the education sector is wrong, not just in Pakistan but all over the world and schools ought to change completely. From 2013 onwards, we renamed the event to, ‘Schools of Tomorrow’. I believe that we are the only school in Pakistan who are trying to look at the future of education even if it means that in the process we end up questioning or challenging some of the things that we are doing ourselves. We have held these events in Karachi, Lahore and Islamabad, and also one in Kuala Lumpur as we have a campus there as well, inviting distinguished delegates from all over the world. In 2016 at Lahore, we had about 200 speakers from different fields – educationists, futurists, environmentalists, entertainers, scientists, fashion designers and celebrities. Titled ‘the World of Tomorrow’, it was meant to envisage how the

EDUCATION

‘THE TROUBLE IS THAT MANY PARENTS VIEW PRIVATE SCHOOLS AS A PROXY FOR THE PUBLIC SECTOR, AND THEREFORE HAVE THE EXPECTATIONS THAT THEY MIGHT LEGITIMATELY HAVE FROM THE GOVERNMENT. BUT PUBLIC EDUCATION IS TOO HUGE A RESPONSIBILITY – ONLY THE GOVERNMENT CAN FULFILL IT’ Kasim Kasuri, CEO, Beaconhouse world of tomorrow is going to be different from the world of today, and what role can schools play in making that happen. For example, in fashion design, we had this very interesting panel discussion with fashion designers and with technology people. One Dutch speaker dilated upon 3D printing while others talked about how technology has transformed their business. The whole focus was on what lies ahead – what

the future holds and how we need to do adapt and change as schools to get there. Thirty years hence, things might be very different. For example, right now nobody takes climate change seriously because as Pakistanis we are obsessed with our everyday issues, and to an extent you can't even blame people. Yet, like it or not, climate change is going to completely change everything; the recent hurricanes

Beaconhouse TNS School:

‘Where the accent is on experiential learning’ decade ago Beaconhouse introduced TNS, its core philosophy having an accent on experiential learning – meaning learning by doing. We felt that in schools there was too much emphasis on knowledge and not enough on understanding or on application. For instance, at school you learn so many things of which you have absolutely no recollection later. Schools all over the world teach in a way that is not knowledge-oriented. At the TNS, we wanted to impart knowledge in a way that students understood why they were learning what they were learning. We used a strategy called PBL (Project-based learning). Here what happens is that instead of studying English, Maths, Physics, history, geography separately as separate compartments, the student is

“A

working on a project; it could be semesterlong or shorter. And often the best projects flow from the student’s interest. “For example, if a student wanted to do a project about building a colony on Mars, his teacher on this project will bring all areas of the curriculum. English will come naturally because they will have to write a lot on the subject and research a lot. Mathematics, physics (gravity), geography, environment would come, because you will have to understand the terrain on Mars. So here the student is not only doing something that they’d love to, it would be practical model, a research paper or a documentary, combining lots of technical skills, for example film making, how to write a script, interviewing people, asking questions, learning critical thinking skills, and also working as a team, thus incorporating communication and teamwork skills. “Project-based learn-

and extreme weather patterns are a clear indication of this. So, as schools we need to develop recognition of this. We feel that there is a lot more that we need to do to remain at the cutting edge of the education, and make sure that children who are attending schools of today are prepared for the world of tomorrow. The child who is entering our school right now will be entering the job ing brings together not just curriculum skills but further skills that are so vital in real life success. Still there are certain bits that are taught in a subject-oriented way but projectbased and experiential learning are the driving factors for the most part.”

On how student performance is measured ll assessment is not through tests but there are some because PBL students have to go to IB Diploma and since there are tests there, we don’t want to put them in a completely unfamiliar environment. Assessments are also divided into summative and formative. Summative are more like regular tests and formative are more on other activities like skills needed to complete a project.

“A

On teacher turnover t varies from school to school. I am not sure about TNS specifically because I am not personally looking after it but my guess would be somewhere around 10 percent – which is the industry average. It is a little bit higher for us than most other schools, as in other sectors it's about 6 to 8 percent. Another reason is that most of our

market in 2037 or later. And we have no idea what the job market of that time would be like. Many people believe that 80% of the jobs that exist today will not exist in the future, and they also hold forth that 80% of the jobs that exist in the future do not exist today. Artificial intelligence and automation is creating a lot of redundancy in the job market around the world. The jobs previously performed by humans are now being accomplished by technology. Whether you like it or not, it is going to happen here too – I believe, maybe to a much bigger degree. Here is why. When new technology comes to third world countries, it has the capacity to leapfrog various generations of technologies. For example, when Pakistan upgraded to fibre optics, we jumped over several generations of development, while the first world had gone incrementally from A to X, we went straight from A to X. Another example, just today I learnt from someone involved with CPEC about a employees are women, whose career is unfortunately secondary to their husband’s. So, the turnover is bound be high.

TNS is not just about IB here is IB Diploma, PBL, Reggio Emilia (an approach to early education that came around the time of WWII in Italy). “Reggio Emilia is connected to IB because its philosophy is that a child should play a role in his own learning. It recognizes that every child is unique with unique potential and should have freedom over the means of learning. It looks very closely at the environment and says that environment is the third teacher for students – first being parents and second the teachers. We started with Reggio Emilia, it took us to PBL, and then we moved to IB Diploma.”

“T

On how the success rate of students is measured once they graduate

“The first two graduating batches of TNS have all been admitted into excellent universities in the US other than the ones who didn't want to go. The trouble is that parents often compare IB Diploma results

‘WE FEEL THAT THERE IS A LOT MORE THAT WE NEED TO DO TO REMAIN AT THE CUTTING EDGE OF THE EDUCATION, AND MAKE SURE THAT CHILDREN WHO ARE ATTENDING SCHOOLS OF TODAY ARE PREPARED FOR THE WORLD OF TOMORROW’ project in which the Chinese in a project in Faisalabad planned to employs 400 people, but owing to automation they scaled down to only 100. That creates major unemployment and it is very important for countries like us to understand how we can leverage technology to our advantage and not against us. So this means that many of the things that schools are teaching might not be relevant for the future! So, the big question is: what do we need to be doing as schools in order to prepare children for a future that we don't know much about? Beaconhouse is among the very few [in this country] who are deeply concerned with such issues, or-

with O and A levels results… but these are like apples and oranges! Whenever students ace exams, we feel very happy for them and celebrate their success. But the fact is, straight A’s are not enough to be accepted into a top university. In the last couple of years, we have seen that students with average IB Diploma results are preferred by top universities over many kids with straight A's in O/A Levels. This is because universities realise that the IB Diploma trains a child in research, presentation skills, critical thinking, problem solving, teamwork, etc, so they are often better prepared for university education. The IB Diploma also treats community service, sports, and creative arts as mandatory. We are trying to learn from the IB Diploma will incorporate some of its best features into the O and A levels. So the placements are excellent and the results are improving. In July 2016, the school’s first result was ‘average’, but the latest result in July 2017 was much better. One of our students scored the highest in Pakistan, and was among the top 3% in the world. The 2017 IB Middle Years Programme (MYP) results at TNS were also fantastic… with the lowest result being higher than the MYP world average!”

ganising conferences and think tanks to develop our own understanding so that we can keep bringing about these changes to our system of schooling. Q: Considering that considerable fees are involved, is private education only for the well-heeled? KK: Sixty percent of children in the Punjab, our biggest province, go to private schools charging anywhere from Rs500 to Rs50,000 a month… but the vast majority of private schools in Pakistan charge from Rs500 to Rs2,000 a month. The tragedy is that majority of parents would prefer even a low-cost private school over a public school. Though private schools have failed to offer a counter-narrative [to all the criticism leveled against them], the government needs to be asked why public schools are in such poor condition that people are compelled to send their children to the private institutions. There is no way that private schools can possibly cater to the education requirement of every Pakistani. The only entity that has the power to do this is the public sector. So, it would make me very happy even if some children from our schools have the confidence to migrate to the public sector because it would mean that the future of this country is secure. Parents need to redirect their anger towards the government. Secondly, the Beaconhouse group offers a range of options to parents. In 2002-3, we started another network known as The Educators. Initially its fee was Rs1500 a month but now, about 15 years later, it is between Rs2000 and Rs2500 rupees a month. The Educators is much bigger than the Beaconhouse School System, while Beaconhouse-Newlands and TNS Beaconhouse are on the other end of the fee spectrum. Q: Said to have greater focus on preparing children for the future, IB is also the most expensive. Does it not restrict the future to a certain strata of society?

EDUCATION

KK: I feel that IB system is not for everyone, and the only factor here is not money. The IB approach requires children to think in a critical and analytical way. It requires them to think, analyse, evaluate and reason. A lot of kids actually do better in an education system which are more study-oriented. (By the way, Sanjan Nagar is a very lowcost school but it is offering the IB’s Primary Years Programme, so it’s not just about money, although money does play a key role in IB schools all over the world). That said, offering IB is generally expensive because the school has to train every individual teacher – making it investment intensive. It’s not that we are not training teachers at our other schools. But in the IB system, all teachers have to be trained abroad: Singapore, Sysney, Amsterdam, Bombay, Berlin, etc. (Although they offer online training as an option, it is not nearly as robust as face-to-face workshops.) This is very expensive and someone has to pay for it. Then there are other elements in this system that make it expensive. So I feel that it is reasonable to say that it is a system of education that is not for everyone for two key reasons: pedagogically it is very different, and yes, it is expensive to offer. The IB Diploma is very rigorous and includes co-curricular activities and community service that many parents in Pakistan might not even consider important. As a simple comparison: Cambridge A Level requires students to take three subjects, while the IB diploma requires six – three at higher level and 3 at standard level. The higher level subjects are similar to university courses in terms of rigor. And along with that, you have to be active in co-curricular activities and community service because, if you don't, you will fail the IB Diploma even if you have aced the 6 academic subjects!! So, I honestly believe that while IB is a great system of education, it's not for everyone. Q: You are not breaking even with the IB system. Is it true? KK: This is absolutely correct. I feel that it would take a couple of years before that transpires. We are offering IB’s programme in about 10 schools, and are not breaking even anywhere. Q: As an educator, why do you think public schools have failed to be at par?

Corporate social responsibility initiatives

Expansive and still expanding gain we have not been able to project it, perhaps because the accent is on making a contribution and not employing it as a marketing tool, but corporate social responsibility initiatives of Beaconhouse are extensive. “One of our biggest CSR projects is Beaconhouse National University. Not many would know that this is a non-profit entity that is not ‘owned’ by Beaconhouse. Our family is a major donor, but there are others too, such as Mr Hussain Dawood, Dr Parvez Hassan, Mr Izzat Majeed, the Punjab Government, etc. We as a family have alone contributed more than US$10 million to the BNU Foundation. “Moreover, Beaconhouse aims to support an equal number of children from underprivileged/disadvantaged backgrounds as we have in our entire network. So, for instance, we presently have 100,000 students at Beaconhouse and 185,000 at The Educators – a total of 285,000 – which means that we aim to extend support to 285,000 disadvantaged students from across Pakistan in one way or another. “On top of the nearly 13,000 students being provided scholarships, financial aid and concessions across the Beaconhouse School System, we are also running 50 public schools for the Punjab government in district Gujranwala with 9,000 children at a nominal fee, while investing far more (than what the government is paying us) in both running expenses/teacher salaries and capital infrastructure – as many of these schools lack basic facilities like toilets and classrooms. We are also managing a few early years schools for the ICT government, as well as for SOS Pakistan, and are in talks with the Sindh, KPK, and FATA governments. We have extensively donated furniture, books and computers to government schools across Pakistan and to low-cost private schools. “Our CSR work is spread all over Pakistan, and we intend to do even more. When the Children's Hospital (a government hospital in Lahore) approached us to set up a play area at their premises, we were happy to work with them to launch the Beaconhouse Aviary. We have also installed solar-powered water pumps in Tharparkar for the benefit of the people. We are in touch with Dr Nafisa Shah and doing some work with her in public schools in Sindh. A government school in North Waziristan is talking to us for taking over its management, which we shall after assessing the security situation. Over the coming years, Beaconhouse intends to support as many children outside its schools as we have enrolled within our entire network.”

“A

KK: It’s simple: Politics. Politicians like to do things that are tangible, to gain votes in elections. When you invest in public education, you see the dividends in 10 to 15 years or longer. So politicians only want to invest in roads and bridges, things that get noticed. Even when they invest in education, it is in things that are visible: school buildings or handing out thousands of laptops – which do not improve the quality of education in any way, especially since many are resold soon thereafter at the Hafeez Center. Q: What do you think about the disparity in different education systems and the impact of a particular system on the chances of survival of different students in the same industry? KK: I feel that a lot of the talk about having a uniform education system is based on politics. I feel that there should be uniform at-

tainment targets (learning targets), meaning should be required to ‘learn the same things’, to put it simply. But how you get there, I believe, should be a choice given to parents and children. I know a lot of people from the socalled elite who prefer to put their children through matric and intermediate because they wanted to send them to medical or engineering colleges – because the IBCC discriminates children from O & A Levels in the conversion formula. That's not because they cannot afford it. So, let it be up to parents to decide the education that their children receive, which is the case globally. I don't care what the politicians say on this, because they know nothing about education, but where I do agree with them is: every child must be afforded the opportunity. And there should be uniformity in the attainment targets. Attainment targets are usually very detailed. For example, children should have

this level of command in algebra or geometry by this class level…. but how we achieve that should be up to the school’s preferred curricular approach & pedagogy (rote learning, teacher-led learning, student-centered learning, student-led learning, Reggio Emilia, Montessori, Matric, Intermediate, Cambridge International Exams, International Baccalaureate, American High School Diploma, etc), parental preferences, preferred learning styles of students and yes – available financial resources. Attainment targets are usually very detailed. For example, children should have this level of command in algebra or geometry by this class level... but how we achieve that should be up to the school’s curricular approach and pedagogy (rote learning, teacher-led learning, student-centered learning, student-led learning, Reggio Emilia, Montessori, Matric, Intermediate, Cambridge International Exams, International Baccalaureate, American High School Diploma, etc), parental preferences, preferred learning styles of students and yes – available financial resources. Q: Have you done this in your schools, as in at any particular standard children in different systems have the same level of learning? KK: There is a balance in our schools. For example, if I tell you about the Educators that in matric, we have a very strict curriculum for the teachers to follow, and they are being followed. There is something which is called the theory of knowledge, which is a very interesting concept. We found that even

Kasim moderating 'Setting Directions' at the 'School of Tomorrow:End of Education' conference in Karachi, 2015.

some children from well-off families with O and A level programmes might not feel very comfortable with IB Diploma program. Q: At Beaconhouse do you teach the government-prescribed curriculum? KK: We are following the government prescribed curriculum specially in the areas where government is very sensitive, such as Islamiat, Pakistan Studies and Urdu. And I also believe in this [curriculum] as we must make sure that children are able to adjust well in our culture. After all, we can't be producing aliens. But when it comes to other subjects, like mathematics or sciences, we do try to add on wherever we can. So you can say, it’s national curriculum-plus. And we are doing the same at the Educators, and not just IB. Sometimes when I look at the Educators, I am myself impressed because I don't think other schools in Beaconhouse have such

World Economic: Kasim addressing a gathering during the World Economic Forum summit in Gurgaon, India.

curriculum. So at the Educators, being inexpensive is not synonymous with being subpar. It is also up to the individual instructors; if they have better insight or additional information they can impart it to students. There is no denying that in the national curriculum of every country, there is an agenda. So, it's not just about the textbook and the curriculum, it also depends on the mindset of the teacher. Then we’re not a very tolerant society, and media always does not play a positive role. For instance, one school started teaching comparative religion in addition to Islamiat. The media hype and the government reaction were not very pleasant. Q: You are against across-the-board uniformity of the education system. Are you also in favour of Madrassas being part of the choice? KK: That is an important part of our culture and less than two percent of the whole lot graduate from Madrassas. I'm not saying this just to be politically correct, but if somebody wants child to become Hafiz-eQuran, he should have the right to go to a Madrassa. I also believe that Madrassas should be required to teach modern subjects like maths and sciences. I don't have any issue with Madrassas, but they should not limit the child to religious education alone. Q: Who would you say your top competitors are? KK: Beaconhouse-Newlands and TNS only operate in three cities in Pakistan, Beaconhouse School System in 30 cities, and The Educators in 225 cities, towns and villages, and we have a different set of competitors in each city… so it’s hard to say. n

EDUCATION

Farooq Baloch arlier this month, the market was abuzz with talks that Indus Motor Company (IMC), the makers of Toyota Corollas in Pakistan, is replacing its hottest brands Xli and Gli, with new 1300cc variants – a hatchback Yaris and a sedan Vios. However, the company quickly refuted the news, saying it was not making that move, at least not for now. “We constantly study and plan to secure new and exciting products from Toyota that will further strengthen the existing product slate to provide a wider choice to customers. At the moment there is nothing concrete. When the time comes, the company will share the information,” IMC’s Chief Executive Officer Ali Asghar Jamali told Profit, responding to queries that specifically asked if they completely ruled out discontinuation of these two models. What we imply from the CEO’s carefully chosen response, and from our own research, is the launch of a new model is rather a question of when, not if – and that seems to be the line taken by everyone at IMC. The company has prepared a study, which is business as usual, but that doesn’t mean it is

going to implement it very soon, a senior official had told us in a previous report. Some of the analysts we spoke to also throw their weight behind the CEO, and why wouldn’t they? After all it’s Corolla 1300cc, a household name in Pakistan and the undisputed leader in the 1300-2000cc category, the most fiercely fought market segment for locally assembled cars. “For the Vios or Yaris [sold as Vitz in some countries], we do not think that the company would compromise on production of its flagship product (Corolla) while introducing a completely new product line would take two to three years,” said a research ana-

‘WE CONSTANTLY STUDY AND PLAN TO SECURE NEW AND EXCITING PRODUCTS FROM TOYOTA BUT AT THE MOMENT THERE IS NOTHING CONCRETE. WHEN THE TIME COMES, THE COMPANY WILL SHARE THE INFORMATION’ Ali Asghar Jamali, Chief Executive Officer, IMC lyst, on the condition that he would not to be named. IMC is working on full capacity since 2015, the analyst said, with delivery time ranging from four to nine months depending on the variant, a clear indication of an excessive demand for its signature car series. Corolla sales will remain strong in the coming months and it will increase it further after debottlenecking of the paint shop in March 2018, he said.

products in the country. However, Profit’s findings are quite to the contrary. This is not the first time the talks of IMC discontinuing its flagship Corolla Xli and Gli variants made rounds in the market. In December 2014, similar news was published by Pakwheels.com, the largest automobile portal in the country known for its vibrant community of car enthusiasts – and usually the first ones to break auto-related

Besides a strong demand for both Xli and Gli, the analyst argued it might not make a business case for IMC to go for such a large expansion. When they launched the new model of Corolla in 2014, it cost them up to Rs7.5 billion, he said, adding, the company will have to consider recovery (payback period) options before going for a long-term bet, which is not an easy decision in Pakistan’s volatile environment. “Why would you risk your premium product for a completely new model and that, too, when new players are expected to enter the market,” the analyst said, referring to Kia and Hyundai that are already testing their

news. The website even published pictures of both Yaris and Vios saying IMC imported these vehicles for test and analysis, a standard practice before launching a new model. The car was shown to select vendors as well. Yaris, the hatchback, will be available in 1300cc while Vios will fill the gap for sedan in the same market segment, the report said. The new models will hit the roads in mid2017 and old 1300cc variants will discontinue, it said. There was some substance to the report, as verified by Profit. The pictures published by Pakwheels.com were of Yaris 1200cc, bearing

AUTO INDUSTRY

registration number BCP 405, and Vios 1500cc, bearing registration number BCP 411, which were imported by the IMC in 2014. Both the vehicles are owned by the company, according to Sindh Government’s online vehicle verification portal. Upon digging further, we learned that the mid-2017 timeline by Pakwheels.com was true at the time. “The Xli and Gli variants had to discontinue this year, according to the decision taken by Japan [global headquarter], which banned 1300cc Corolla following complaints of engine seizures,” an insider told Profit, requesting we don’t identify him because he was not authorized to speak on the subject. “The production of 1300cc variants were almost halted earlier this year but then the management sought extension from the Japanese to continue procuring Xli and Gli parts till 2018 so they could complete the long queue of existing orders,” said he. “The Xli and Gli will discontinue in 2018 for sure because Japan has approved only 1600cc for its Corolla range,” the official said. The work on the new variant project has commenced already and IMC’s team has been visiting Thailand for training classes regarding the launch of Vios, a 1000cc sedan, which will hit the market end of next year, he said – and if numbers are any indication, Toyota Japan can’t afford a further delay. IMC has been producing 240 units a day, but still not being able to meet the pressing demand because of some production constraints – the company website is showing five-month delivery time for Xli and Gli, but market survey shows it’s longer than that, nine months in some cases. On the other hand, Honda has been increasing its market share in 1300cc and above category, which accounts for 44% of total sales (as of June 30, 2017) of local car manu-

facturers. Though IMC still holds more than half of that segment as of September 2017, Honda has reduced the gap and may soon threaten the former’s leadership position. In its last financial year, the company achieved the highest daily production of 180 units, in two shifts, which is almost double of what it was producing the previous year. As a result, Honda increased its share to 43% in 1300cc and above category at the end of JulySeptember quarter, up from 29.4% for the year ending June 2016. During the same period, IMC’s share slipped from a whopping 65.8% to 52.4% while Pak Suzuki maintained their under 5%. Honda sales in July-September quarter grew by 56% to 12,600 units (including the newly launched BRV) compared to 8,100 units of the corresponding period of last year whereas IMC sales recorded a growth of 5% to 15,100 units (including Fortuner and Revo) against 14.4k units. The 2017 fiscal was challenging for the manufacturing division amidst a pressing demand to meet production targets, IMC said in its annual report, noting the Company migrated from the legacy SAP system to the state-of-the-art SAP S/4 HANA version, which required slowing down the pace of pro-

‘HONDA HAS BEEN INCREASING ITS MARKET SHARE IN 1300CC AND ABOVE CATEGORY, WHICH ACCOUNTS FOR 44% OF TOTAL SALES (AS OF JUNE 30, 2017) OF LOCAL CAR MANUFACTURERS. THOUGH IMC STILL HOLDS MORE THAN HALF OF THAT SEGMENT AS OF SEPTEMBER 2017, HONDA HAS REDUCED THE GAP AND MAY SOON THREATEN THE FORMER’S LEADERSHIP POSITION’ 24

duction. “We also witnessed the innate challenges related to run-out of the first generation Fortuner and 7th generation Hilux. In the last quarter, preparations were made for minor model changes in the Corolla that required the making of new tools for parts and improving the process by addition of safety features in the vehicle. This also resulted in a brief loss in production volume.” Responding to a question about the latest quarter, Jamali said, “There were several holidays during July-September quarter like Eid and Moharram, which caused reduced production – a usual feature.” The CEO said, IMC is continuously improving its production capacity. “A multi-billion rupee investment was made in the paint shop to increase production capacity, which is expected to yield results from the last quarter of next year [FY2018]. This will further help in our drive to reduce the delivery period and intensify customer satisfaction,” states the annual report. The projections of market analysts polled by Profit also point the current trend will persist for another six months. IMC is working on full capacity and yet may not achieve the same growth as Honda, said one analyst. The Civic is booked through March 2018 while City till December 2017, said another. “Honda launched its new 10th-generation Civic in mid-2016 when there was no competition from any new model. And that boosted their sales,” said Arsalan Hanif, an investment analyst at Arif Habib Research. “Aggressive sales, timely delivery and new innovation ate into the demand for Corollas,” he added. Corolla’s peak time had by then reduced, as its newest model was launched back in 2015. With no alternate in sight, Honda Civic’s launch was timed to perfec-

tion, for it filled the gap,” he said. Owing to production constraints, IMC could not reach its potential while competition, Honda, gained traction and increased volumes by 44%, the company acknowledged in its annual report but added it has introduced ‘Big Minor Model change in Toyota Corolla’ with the best in class safety and luxury features standardizing Dual SRS Airbags across the entire Corolla range, which will result in considerable benefits through the next fiscal year. There is discernible hunger in the market for new models, which is always what consumers prefer when going for a new fourwheeler, the analyst said, adding, the Civic euphoria will continue for a while and if City’s demand slows down, Honda will launch its new model, which will jack up its demand again. “The last three months data is clear indication that Honda has consumed IMC’s market share,” Hanif said. “IMC has not officially notified yet, but the market grapevine suggests the company is planning to replace Corolla Xli and Gli with Yaris or Vios to recapture its market share and contest with the new Honda City, expected to be launched in the first quarter of calendar year 2019,” he added. “Honda has announced to launch new City model in the first quarter of 2019, but they can launch it any time if the intent was to further dent Corolla’s market,” Hanif said. Toyota ’s response to competition, a 1000cc Sedan; who should worry more, Honda or Suzuki? The GDP growth purportedly is the highest in over a decade and is forecast to grow at 6% for the financial year 2017-18 as government is set to go on a spending spree ahead of 2018 general elections, providing further fillip to already high-demand levels. The automobile market continues to exhibit strong growth and is forecasted to achieve a level of half a million units by the

year 2025, according to IMC – the number was 213,000 units in FY17, not counting 59,000 used or refurbished cars landed in the country under various schemes last year – no wonder auto financing soared to 54.3% in total consumer financing (Rs70.5 billion) during the period, thanks in part, to the introduction of new models of passenger cars and increasing popularity of ride-hailing services that played a significant role in its uptick. It was also in the last couple of years, Pak Suzuki, IMC and Honda booked their highest-ever sales. And analysts predict, they will better their previous best the next year. However, the market presently lacks choices from local auto-assemblers and demand continues to strip supply, as reflected in all three auto manufacturer’s rather longish waiting lists across almost all brands. Therefore, IMC’s move to launch a 1000cc Sedan next year may cause quite stir in the market, especially for Pak Suzuki, the dominant player in 1000cc segment. “Given the engine’s significance in determining the price, it seems like Toyota will hit Rs1.5 million price tag,” says Omer Arshad, a blogger at Ecarpak.wordpress.com who also runs a Youtube channel focussed on auto reviews. Explaining the car enthusiast said with that price range, IMC can target both City’s lowest 1300 cc (manual) model and Swift’s top-of-the-line 1300 cc variant. “If they also launch the auto version, they could also target City’s 1300cc auto variant,” he said. He, however, said the sedan may not affect Suzuki’s hatchbacks market where Cultus and WagonR are the runaway favourites. The variant under discussion, Vios, Ar-

‘BUT ONE THING IS SELF-EVIDENT: TOYOTA’S LEADERSHIP IN THE PAKISTANI MARKET IS NOT GOING TO WITHER AWAY JUST BECAUSE ITS COMPETITION MADE SOME SUAVE MOVES TO DENT IT FOR THE SHORT TERM. FOR, AS THE VERNACULAR MARKET QUIP SUGGESTS, TOYOTA FOR A VERY LARGE PART CONTINUES TO HOLD SWAY OVER THE PEOPLE’S IMAGINATION’

shad said is a successor of Belta, which was the only Sedan available in 1000cc engine capacity and was internationally discontinued in 2013. It may be recalled that the test vehicles imported by IMC were Vios 1500cc and Yaris 1200cc but the company, according to our sources, is going for 1000cc – after the outdated Belta, a 1000cc sedan was not available in any of the regional markets we checked. In other words, IMC will be replacing an underpowered 1300cc sedan with yet another underpowered 1000cc sedan, or at least this is how Arshad interprets the move. Based on weight-to-engine ratio, the sedan in a 1000cc capacity will be underpowered, the analyst said. Asked if IMC is taking a risk by introducing this variant to replace its largest selling brand, Arshad said, it would sell like a hot cake just like the underpowered 1300 cc sedans Xli and Gli because of the brand Toyota. He also disagreed with analysts thinking IMC won’t risk that, saying not a single Toyota car has ever failed in Pakistan – Vitz, Passo and even Cuore, which was produced by its subsidiary Daihatsu. “We grew up listening agar gadha gari pe bhi Toyota ka logo laga do tu we be bike gi [even if you place a Toyota logo on a donkeycart, it will sell],” he said. Would it continue to be that way in the months and years to come, it remains to be seen. But one thing is self-evident: Toyota’s leadership in the Pakistani market is not going to wither away just because its competition made some suave moves to dent it for the short term. For, as the vernacular market quip suggests, Toyota for a very large part continues to hold sway over the people’s imagination. n

AUTO INDUSTRY

BANKING

‘WRAPPING THE ENTIRE CHINIOTI COMMUNITY IN THE CLOAK OF PRISTINE BUSINESS PRACTICES AND SO-CALLED DEVOTION TO RELIGIOUS VALUES MAY BE OVERSTATING THE REALITY A BIT. YET THE FACT THAT SO MANY OF THEM HAVE ACHIEVED UNPARALLELED SUCCESS OVER A PROLONGED PERIOD IN A CONSTANTLY SHIFTING-SANDS POLITICAL SCENARIO AND UNCERTAIN ECONOMIC ENVIRONMENT, IS REMARKABLE IN ITSELF’

What makes Chiniotis so special in the market? By: Agha Akbar ushtaq Ahmad Yousufi, the greatest-ever Urdu language satirist, in one of his trademark quips said that Muslims of undivided India thrived only in one business â&#x20AC;&#x201C; skins and leather, and that too of the unfortunate animals they had earlier consumed. Witticism apart, there is more than a grain of truth in this adage. Being a top Pakistani banker himself, and knowing the commercial qualities of the Chinioti businessmen who had by then started making their presence felt among the countryâ&#x20AC;&#x2122;s business fraternity, Yousufi might actually have been alluding to them.

BOOK REVIEW

The other principal mercantile community in India, the Hindus, detested dealing in leather owing to their religious beliefs. That creed provided not merely an opening for Muslims but the great break for a near monopoly in the tannery business. Though they diversified in the post-partition era, during the Raj this was the main source of wealth of Pakistan’s now largest and perhaps the most influential and thriving business community, the hard-working and shrewd Chiniotis. They can, perhaps by stretching it a bit, be compared to the western businessmen of Calvinist views, such as the legendary John D. Rockefeller, who were noted for their almost obsessional moneymaking drive, and whose work ethic comprised worshipping six days in business and the seventh in church, living frugally and donating generously to philanthropic and altruistic causes. This raises another question: Having thrived in a monopoly situation by default, with some honourable exceptions aside, could this be the reason why it has become second nature for a considerable portion of the Pakistani business community, to always be drawn towards cartels, subsidies and government handouts? And to blame everyone else under the heavens, and especially the government of the day, for their abysmal incapacity to compete as equals in world markets?

Fascination with Chiniot and Chiniotis r Amjad Saqib may have outgrown his initial gripping attraction, but his lingering fascination with Chiniot and Chiniotis, instilled in his early twenties when he was posted there as Assistant Commissioner, has endured to

‘HAVING FLOURISHED IN AN ABERRATIONAL MONOPOLY ENVIRONMENT BY DEFAULT, HONOURABLE EXCEPTIONS ASIDE, COULD THIS BE THE REASON WHY IT HAS BECOME SECOND NATURE FOR THE PAKISTANI BUSINESS COMMUNITY TO ALWAYS BE LOOKING FOR CARTEL-FORMATION, SUBSIDIES AND GOVERNMENT DOLE-OUTS?’ this day. The author of two books that relate directly to his posting there (Shehr-e Lab-e Darya, alluding to this central Punjab city’s location along the river Chenab, and Ek Yadgar Mushaira, on a poetry recitation gala that he organized, he has now performed his literary hat-trick – his magnum opus spread over 400-plus pages on the Chinioti Sheikhs, their ancestry and roots and how through their genetic commercial savvy, they have, not only individually, but on a collective level, created an amazing rags to riches story. Dr Amjad Saqib is a man of many parts and for all seasons: an MBBS doctor by education and training, he sat through the civil service competitive examination, standing first in written and third overall, as was inducted into the elite DMG service. He resigned from this promising and socially assured position to chase a seemingly impossible dream – creating his own NGO, Akhuwat, devoted to interest-free microfinance. And by his personal conviction and passion, he managed to transform this unlikely venture into a hugely successful, oneof-its-kind enterprise in the world in the process. Emboldened, he also started an education endowment program, financed by the Punjab government, whereby all students, irrespective of their financial stand-

ing, received scholarships and stipends, based purely on their scholastic scores. Now he is raising the Akhuwat University, in which admission will be open for all students of proven talent, again irrespective of their capacity to meet the educational expenses. On top of this, Dr Amjad writes in chaste Urdu, and has more than half a dozen books to his credit, with his travelogue of Nepal,Gautam ke Des Main, a standout in literary terms.

Chiniotis soar is latest work, ‘Kamyab Log’ (Successful People – the Story of Chinioti Entrepreneurship) is more of a chronicle, outlining Chiniot’s history, its architecture, its people, but mainly an attempt to analyse what makes the city’s business community tick. The second chapter consists of 30 interviews with the most prominent success stories, owners of sprawling business empires who, coming from humble backgrounds some 150 years ago, spread across the entire sub-continent – first sweating it out in the market pits and business cauldrons and then, with a bold capitalist spirit, setting up small businesses in far-away Indian cities, and Burma (now Myanmar). The third part highlights 24 major traits on which these commercial empires were based and built literally from scratch. The second and third part form the bulk of the book. Read one interview after another and all 30 of them, apart from some minor divergent detail here and there, follow more or less the same pattern: well-deserved paeans to their ambitious grandparents and parents, who instilled in their wards their remarkable work ethic, and the accounts of their shrewd business acumen. If you’ve read one, you’ve read them all. Still, the book is an absorbing account of an intrepid community with a natural talent for business.

Close to the end of the first chapter, the author asks a rhetorical question: Are the Chinioti Sheikhs the richest community in Pakistan now? He doesn’t quite expound further on that, the conjecture being that, in his view, they are. By the 1970’s, three Chinioti groups – Colony, Crescent and Nishat – were already vast behemoths, and were counted among the richest ‘22 Families’ in the country, a somewhat demeaning term coined by the worldrenowned development economics guru, Dr Mahbub-ul-Haq, then the chief economist at the Planning Commission of Pakistan, suggesting that this lofty eminence was actually obtained through capturing and monopolising national resources, which had resulted in inequitable distribution of wealth at the national level. The figures were indeed staggering: 80 percent of banks, 70 percent of insurance companies and 66 percent of the industry, Dr Mahbub maintained, had been cornered by these 22 families. Field Marshal Ayub Khan’s ill-advised ‘decade of progress’ celebrations only served to raise passions against his own rule and also the business empires of the ‘22’. This situation was instantly seized upon and political mileage gained by Z.A Bhutto’s PPP in the western half of the country and Mujibur Rehman’s Awami League in East Pakistan, with Habib Jalib’s fiery poetry also stirring the crowds and drumming up public support for their social and political egalitarian programs, paving the way for the post-1971 nationalisation. The 1970s saw the decline of the Gujarati Memons – until then the prime movers and shakers in the country’s economy in all sectors, and their waning influence was a coinciding catalyst for the Chiniotis’ waxing. The latter were not overly impacted by the nationalization of the 1970s. Amongst the richest groups in 1970, the highest ranked Chinioti was at fifth; by 1990 it was second and by 1997, top of the profit charts – with the richest

Pakistani acknowledged to be Mian Mohammad Mansha, chairman of the Nishat conglomerate. The book hints that Nishat’s acquisition of the golden-goose Muslim Commercial Bank acted as the force multiplier for the group, forcing all rivals to play catch-up. To be fair to the author, who is otherwise gushing in describing the Chiniotis’ scrupulous work -ethic, he also does not completely omit the fact that sometimes their deliberate courting of well-positioned politicians also reaped rich dividends. A case in point, not mentioned in the book, is that of S.M. Naseer, who in the 1960s acquired from the government the iconic Civil and Military Gazette, where Rudyard Kipling, master storyteller of the Raj and poet laureate to Queen Victoria, once worked.. His eye was probably on the paper’s prime real estate situated smack in the middle of the Mall. It may have made this Chinioti a few, well considerable, bucks but it destroyed a historic building and replaced it with that mercantile monstrosity – the Panorama Centre.

Are they really special? hroughout this extensive saga of Chiniotis’ phenomenal growth spread over six generations, in which they hit the ground running even after abandoning their businesses on the wrong side of the border during Partition, surviving the separation of East Pakistan and Bhutto’s nationalization, both of which affected the Memon community more, and dealing adroitly with the shifting political landscape, the narrative leans towards presenting them as paragons of financial practices and orthodoxy, adhering to religion-based values. The usual formulae for prolonged success in business – vision, energy, industry, daring to take risks, innovation, inventiveness, to go wherever opportunity beckons, the occasional sleight of hand in shortchanging the government, provided one gets away with it – is age-old and universal. The Chini-

CHINIOTIS WILL ALWAYS STAND OUT AS BUSINESS PIONEERS OF THE MUSLIM COMMUNITY FROM THE TIME OF THE RAJ, AND THEIR OVERALL CONTRIBUTION IN BUILDING UP PAKISTAN’S INDUSTRIAL BASE, ALMOST NON-EXISTENT IN 1947, FAR TRANSCENDS THEIR COMMUNITY’S LIMITED NUMBERS

Dr. Amjad Saqib

otis neither invented it, nor would they be the last to employ it to create huge fortunes. Regardless of which neck of the woods in the world they belong to, tycoons do not become tycoons because of their virtues alone, but also because of their single-minded pursuit of, you guessed it right, wealth creation. Across the border, Dhirubhai Ambani came from nowhere and over one generation, leapfrogged over Tatas, Birlas’ and other industrial colossus built over two centuries. It was widely believed that he had the ‘knack’ of being in sync with the system and making the regulators work for him. There was nothing kosher in this, and his Cinderella story is not far different than that of our own fly-bynight barons – and it must frankly be admitted here that some later Chiniotis also share the same dubious traits. Wrapping the entire Chinioti community in the cloak of pristine business practices and so-called devotion to religious values may be overstating the reality a bit. Yet the fact that so many of them have achieved unparalleled success over a prolonged period in a constantly shifting-sands political scenario and uncertain economic environment, is remarkable in itself. According to Dr Amjad Saqib, the 1868 census puts the number of Chinioti Sheikhs at 8,000, about 1,000 families, and now they are numbered at 300,000 – around 40,000 families, give or take a few, and many are now taking up vocations other than the traditional trading one. But they will always stand out as business pioneers of the Muslim community from the time of the Raj, and their overall contribution in building up Pakistan’s industrial base, almost non-existent in 1947, far transcends their community’s limited numbers. n

BOOK REVIEW

‘Opportunities are always on the lookout for you’

‘Glory lies in hard work’ Javed Iqbal Wohra Mayfair Group

Mian Mansha Nishat Group Nishat Group is acknowledged to be the largest conglomerate and its founder and CEO Mian Muhammad Mansha the wealthiest man in the country. After the death of his father in 1968, he called off his education in England to join the family business. Though Mian Mansha was heir to a major legacy, yet he made a name for himself in the 1970s and 80s owing to his suave business practices and hard work. His star really became ascendent post his acquiring MCB at it its privatisation in 1991. Following are the excerpts of an interview from the book.

“Looking for work, my father went to Calcutta, where he was employed by a Chinioti Sheikh. No work was below his dignity. He swept and cleaned his shop himself. It took him long, but when we had become successful, a man came to see him. I saw my father offer his chair to the man. When he left my father told me that the man’s father had imbued in him many tricks of the trade. Now that we had grown big while the man’s fortunes had taken a dip, my father still had all the respect for him. Similarly, I have never forgotten my patrons. I wish we all remember: those who forget their patrons can never succeed.”

On decision-making “Decision making is an important aspect. Those who lack the decision-making power are often left behind in life. I often say to my friends in jest that every decision that I took swiftly turned out to be successful while those decisions that I made after due consideration didn’t pay off. It’s possible that several of your decisions remain unsuccessful, but one correct one taken at the right moment may atone for all those misses.”

“My father understood that running business is not easy. Buying skins, collecting and transporting them, when transportation system was not that good – it was hard work, day in and day out. The one who is aware of his strengths and his weaknesses always stands in good stead. In business, he was also convinced of the need to diversify.”

On new opportunities

On courage in the face of adversity

“A new and better opportunity is always looking for you. All my life I’ve looked for such opportunities. I never dithered when starting a new business. Ideas and businesses need to be explored. I travel the world and every time I find something new, I try to evaluate it from different angles.”

“My father took some decisions in his life that were damaging, to the extent that at one point he was not left with enough resources to get himself treated. But he demonstrated courage in the face of adversity. Picking himself up, he started again with his brothers as partners. My uncle established a chocolate factory, a decision before its time, as no one in Pakistan then had developed a taste for it. Gradually we understood how important planning is before starting any business.”

On passion for work “Nothing makes me happier than work. Sometimes I wake up in the middle of the night and pace around my bedroom – anxiously waiting for the dawn so I that could go to work. When I went to the US for education, I saw that people there loved their work. Today businessmen from all over the world are my friends. And none that I know of became successful without hard work.”

On his two principles “I believe only two principles are enough to be successful: The ability to organize and the ability to delegate. If someone can organize himself, then he can run as big an organization as any. Secondly, by delegating you can do many things at the same time. When you delegate, you gain the sense of responsibility and that becomes the reason for growth.”

On consistency and hard work

On rising again aﬞer a fall “Our hard work started paying off but all of a sudden political situation in Karachi deteriorated, and we had to shut down our factories. Despite being the largest taxpayers in the confectionery sector, the government didn’t offer any assistance. My father said, rising again after a fall is a Chinioti tradition and so we started afresh, with Mayfair Spinning.”

‘Business is an art, not a science’ Ahmad Kamal Kamal Group “Business is not a science, it’s an art. I got to learn a lot from my father and grandfather. My grandfather had a modern mindset and convinced of the importance of change. He used to wake up at 5 a.m. offer prayers, and recite the Quran. He listened to BBC news regularly. The habit of thoughtfulness and pondering allowed him the ability to comprehend. Sometimes he used to say, “I am not very educated, perhaps that’s why I became a successful businessman. If I was well educated, I might have looked for a good job or have been a secretary [munshi]. “Business is not always two-plus-two. It is in a manner of speaking, arrangement of resources. And the true purpose of a businessman is to bring resources together. People, workers, money, equipment, technology, mutual relations, and systems – all these are resources. I am not educated from a foreign university. I learned all this from my father, grandfather and from my own experiences. “Few important principles to me are: Diversity in business; change and compatibility; benefitting from latest skills; timely decision making; benefitting from the experiences of successful predecessors; cutting your coat according to your cloth and recognizing important moments in partnerships.

On success not going to one’s head “Another Chinioti quality is: success does not go to our head. When one reaches a certain point, one finds another Chinioti entrepreneur standing ahead, and it goes on and on. This mutual competition is not negative, it rather works as an inspiration.”

On the features of success “From our elders, we have learnt four ingredients of success: migration and travel, hard work and intelligence, refraining from extravagance, and conservation and appropriate use of resources. My father used to give me another advice. To err is human, but to repeat it is foolhardiness.”

On types of education “We value education but it should be according to the demands of the business. If you have to work in the spinning industry, you don’t need an international education. If you have to do international trading or become associated with multinational companies, then you need to be foreign qualified. I believe that businesses don’t run only on degrees, rather on education that is according to the requirements of a particular business. I also say that our elders’ decisions should not be criticized. They did what was the best given the resources they had.”

On not having the knack for politics “I have no shame in accepting that while the Chiniotis might have gone very far in the world of business but they have not been equally successful in other fields. For example, we have not been able to achieve any political success. We are successful in the politics of chamber and trade associations but not in general politics. Perhaps it [the rigmarole] does not suit our temperament, or maybe the rules are entirely different.”

On success being a ‘relay race’ “Success is like a relay race. One generation runs to a particular point, and the baton is passed on to the next generation. If the next generation has the ability to run the distance, the progress continues. But for this non-sentimental, objective thinking is a must. A Chinioti father abdicates his position for his son in his lifetime, after having imparted to him the elements of success. Landlords don’t do that.”

BOOK REVIEW

OPINION

KK Shahid Crude AwAkening

Gaslight at the end of PSX tunnel There is cause to believe good news is around the corner for those willing to drill inside the oil and gas sector he week ending on October 14 had been precarious for the PSX and investors as political tensions gave the market a good old hammering. The bears took over during the week, clawing the index below the 40,000 level – for the first time in a year. The market closed at 39,847 points on Friday, recording a 1,466-point decline – losing 17% of its value. As PSX dillydallies, the oil and gas sector seems to be lighting a glimmer of hope for investors. During the outgoing week, O&G marketing companies contributed to the index decline as it lost 164 points. The O&G exploration companies, meanwhile, fared better – gaining 71 points on the back of improved oil prices in the international market. Arab Light oil witnessed a 2% hike over the week, contributing to positive investor sentiments around O&G exploration, hence the bullish performance of these stocks. The sector has all bits of red, green and yellow, with some companies equipped to do better going forward. Foreign investors have actively been participating in oil and gas stocks. In September, foreigners bought oil marketing company stocks worth $9.5 million but sold O&G exploration and production company

KK Shahid is Energy Correspondent, Profit

‘PAKISTAN’S OIL AND GAS SECTOR HAS WITNESSED AN IMPROVEMENT IN DEVELOPMENTAL EFFORTS IN THE PAST FOUR YEARS. 103 DISCOVERIES IN O&G HAVE BEEN MADE AND 850 MILLION CUBIC FEET OF GAS HAVE BEEN ADDED TO THE PRODUCTION SYSTEM IN THIS PERIOD’

stocks, offloading shares worth $13.7 million. It was primarily the improvements in international oil prices during September that encouraged investors to opt for value buying – particularly in oil marketing. Pakistan’s oil and gas sector has witnessed an improvement in developmental efforts in the past four years. 103 discoveries in O&G have been made and 850 million cubic feet of gas have been added to the production system in this period. The Pakistan Oilfields (POL) seems to be making headlines owing to its major oil and gas discovery in Punjab. The discovery has the potential to ramp up the company’s hydrocarbon production by a staggering 25%. Tests have revealed that the latest discovery has a flow of about 2,250 barrels of oil and 21 million standard cubic feet of gas per day. Considering the POL’s holding of 80% of the newly discovered site, the company’s O&G production has the potential to increase by 26% and 23%, according to a Topline Securities report. Investor optimism was reflected in the company’s share price which witnessed a 0.74% improvement following the announcement of this news. Topline Securities has also estimated that oil production could clock in at 1,600-1,800 barrels per day, while gas production could be within the range of 16 to 18 mmcfd. Its impact on the annualized EPS is estimated at Rs7.5-8.5 for FY18 considering that the POL owns a major share in this field discovery. POL was also the major gainer in the oil and gas sector during the outgoing week with a 1.24% improvement in prices. As oil prices have begun to pick up, it is expected that the OGDC will also spark investor interest going forward. Crude oil prices seem to be inching closer to

$60 a barrel, as global prices increased for three consecutive days in the outgoing week. As international oil prices are expected to record improvements, oil exploration and production firms generally have something to be hopeful about. The dampened oil market has caused OGDC’s earnings to remain low in the recent past. But FY17 reported improvements on the back of oil prices posting recoveries. Besides that, the company has also been able to perform better during FY17, as it has contributed 51% and 28% to the countries oil and gas production respectively. The company’s crude oil production level traced new heights in FY17 at 50,345 barrels per day. For FY18, 100 new wells are expected to come online, with 100 kbpd of oil in sight. Considering that PPGDC boasts the largest oil portfolio in the country, and has the highest acreage, it is highly likely that it will benefit from these new wells. Moreover, the company is also leading initiatives in Baluchistan and KPK which could pan out well in terms of financials for the oil and gas giant. OGDC was also a major gainer in the O&G sector last week, with price improvements of 0.55%. A two-pronged positive news surfaced for oil marketing company following the recent ECC meeting. First, the commission

‘CRUDE OIL PRICES SEEM TO BE INCHING CLOSER TO $60 A BARREL, AS GLOBAL PRICES INCREASED FOR THREE CONSECUTIVE DAYS IN THE OUTGOING WEEK. AS INTERNATIONAL OIL PRICES ARE EXPECTED TO RECORD IMPROVEMENTS, OIL EXPLORATION AND PRODUCTION FIRMS GENERALLY HAVE SOMETHING TO BE HOPEFUL ABOUT’ for dealers and oil marketing companies on the sale of petroleum has increased by 33 paisa per litre. Oil marketing companies will see their commission increase by 14 paisa, while that of dealers will increase by 19 paisa. Second, the commission on diesel sales is no longer regulated, hence private oil marketing companies and dealers have now been given the freedom to charge commission on diesel sales as per their requirements. The latter prong is despite heavy opposition from FBR and OGRA. These are good omens for oil marketing companies who will benefit from improved commission rates in the near future. The decision to deregulate diesel commission will be subject to review after three months to gauge the impact, but it does mark the first instance where private entities have been given the freedom to decide commission rates without government interven-

tion. In light of these developments in the oil and gas sector and improvements that are taking place on an international level, there is cause to believe good news is around the corner for those willing to drill inside the oil and gas sector. Following the commission announcements, oil marketing companies will be able to secure better commission rates, which will impact financials favourably. As the international oil prices record improvements, oil exploration and production companies will generally benefit from it. However, it is expected that POL and OGDC will remain in the limelight in the E&P sector owing to new discoveries for the former and favourable portfolio positions for the latter. Shell’s quarterly results are also just around the corner and investors are advised to keep an eye out for the announcement as well.

ENERGY

SuSpending peOple And buSineSSeS For so many, dead signals mean no work Aisha Arshad & Arshad Hussain n September 29, Muhammad Faisal, a full-time Uber driver in Karachi, as usual left home early, at six in the morning. Having cashed-in on a couple of rides almost immediately, Faisal anticipated totting up the 12-rides-perday average, to qualify for the 35-rides-infour-days bonus – an incentive Faisal is keen on achieving week after week. A little after 8 a.m., Faisal was signalled for another ride near Mohatta Palace and he was on the way to pick it up. A total of four rides in the first three hours, it was going to be a good day, so thought Faisal. The next mo-

ment when he picked up his cell phone to chart his path through Google maps, the app was dead, said Faisal, talking to Profit. “After restarting the application, and going through everything else that one could possibly do to revive it, I noticed the absence of signals – which meant no internet and no access to Uber app or Google maps,” said Faisal. So, even if he somehow reached the pickup point, there was no way of contacting his customer or continuing the ride. Disappointed in the extreme, he called it a day knowing that his take has been setback quite substantively. Desperate to avert any untoward incident at the business end of the Ashura (8th, 9th and 10th of Moharram – Sept. 29, 30 and Oct 1) all provincial governments resorted to the easy option to ensure safety: get all wireless GSM cellular services, including internet, suspended. Though people were able to use cable internet services at home, the wireless network was completely jammed thus bringing day to day activities of the populace at halt. The Sindh government notification announced: mobile phone and internet services were to be suspended over three days from 08:00 to 20:00 hours in at least eight cities of Sindh – Karachi, Hyderabad, Shaheed Benazirabad, Khairpur, Sukkur, Larkana, Shikarpur and Jacobabad. For some reason the suspension for the 8th of Moharram (Sept. 29) was not announced beforehand, catching people like

Faisal unaware and unprepared for the sudden communication blockage. For Faisal, the next two days were similarly agonising. “I virtually had no work, while others who somehow managed to get some rides, with the app nonfunctional, those were neither initiated nor ended the normal way, with fare calculated randomly on a whim”, said Faisal. “I believe the importance of information and communication technologies in the lives of people is still not comprehended by the policymakers. The discomfiture the absence of signals and the internet access causes is enormous to ordinary people as well as those dependent on it for their work every moment of the day and night. “If they somehow could appreciate that, they would not be blocking access whenever a security threat presents itself”, said Usama Khilji, a human rights activist, on the matter. “This is a denial of the fundamental right to information under Article 19-A and impacts freedom of speech guaranteed under Article 19 of the Constitution,” added Khilji.

Jammers, an inﬁnitely be‫מּ‬er idea ccording to technology experts, with cameras already there, mobile jammers can be planted on the procession routes and safety of the mourners, or in case of a cricket match the security of the audiences can be ensured without stopping the whole city in its tracks, with the attendant socio-economic issues. The losses that accrue to people and businesses cut a wide swathe: the mobile service providers, common citizens, cargo transporters, car tracking companies, ride-hailing services, home delivery suppliers in a range of trades – not to mention general users of the technol-

ogy, which basically means everyone. Several leading mobile service providers were separately contacted in order to quantify their losses, but none of these had yet finalized the impact of the losses suffered over the three-day hiatus this year. According to market analysts, approximately Rs. 1 billion were lost by the four leading cellular companies: JazzWarid, Ufone, Telenor and Zong. To put things into perspective; Pakistan Telecommunication Authority (PTA) announced the annual income of cellular companies was Rs. 345.537 billion in 2015-16. During the last 15 months since then, the mobile users seem to have increased exponentially, thus adding immensely to the revenue/loss dimension on cellular suspension. Additional to the billions of rupees lost by large companies, small scale entrepreneurs, internet based service providers and hundreds of Uber and Careem drivers also had to go through the agony as a consequence of the three-day-long shutdown. “I lost almost Rs. 8,000 in those three days as I could not ride more than two hours during the day,” said Faisal who takes home approximately Rs. 50,000 each month by earning Rs. 1,500 in a single day, and the fourday bonus of Rs. 3,500 every week. Though no data on accumulative losses to the country is available, rough estimates can be made based on the individual losses that were reported. Talking to Profit, a Sindh government official said: “All big cities of the province faced terror threat, leaving the government with no other option except shutting down mobile services during Ashura.” PPP, the ruling party in Sindh, was actually the first one to introduce this practice of cellular networks blockage in their tenure from 2008-2013 under the federal interior minister Rehman Malik. To this day, Malik pats himself on the back for introducing mobile service suspension to combat threats to security. No wonder, one could not expect the present government to deviate from the trodden path and find a more imaginative solution to the issue.

The point to ponder espite the cellular networks suspended at the slightest pretext, year 2014 saw the highest number of terrorist-related fatalities – 5,496 com-

‘DESPERATE TO AVERT ANY UNTOWARD INCIDENT AT THE BUSINESS END OF THE ASHURA (8TH, 9TH AND 10TH OF MOHARRAM – SEPT. 29, 30 AND OCT 1) ALL PROVINCIAL GOVERNMENTS RESORTED TO THE EASY OPTION TO ENSURE SAFETY: GET ALL WIRELESS GSM CELLULAR SERVICES, INCLUDING INTERNET, SUSPENDED’ pared to 5,379 in 2013 (according to the South Asia Terrorism Portal). This clearly manifests that it takes more than cellular suspension to stop the terrorists from striking. However, with the initiative of Zarb e Azb – launched after the deadly Army Public School attack in Peshawar – a significant decrease in the sheer number of terrorist activities was witnessed in 2015 and 2016, with 3,682 and 1,803 deaths respectively. The sectarian attacks also declined in 2016 with 131 fatalities in 33 incidents against 276 fatalities in 53 incidents in 2015. According to the experts, however, the data does not substantiate that the benefit is coming on the back of cellular services suspension on high-alert days. “Security forces have not made public any information that demonstrates the utility of signal blockages, simply because it is not possible to demonstrate,” said Khilji. “Suspending cellular services completely is a bit of a stretch. If the officials cannot come up with a smarter way to counter terrorism, than at the least selective suspension should be implemented in geographic niches with the times carefully calculated,” said Pervaiz Iftikhar, an expert on information technology. “Why does the government’s technical staff not recommend to fix jammers on the route of mourning processions – where they have already placed cameras. This is easier and can save losses worth billions of rupees to mobile companies and to the government in taxes,” asked Iftikhar. Khilji also spoke of the social psychological issues faced by the citizens on such days when security is already a concern for everyone. “People are unable to contact their friends or family, and this creates a sense of panic; since it impacts mobility as well, anxiety levels are heightened. Then, if required, people are unable to even contact rescue services.” Ironically people confronted with terrorism and violence, such as the Bohra com-

munity visiting from abroad for the Ashura, and needing to communicate on WhatsApp and on phone and dependent on Uber/Careem and Google Maps to commute were left at the mercy of the rickshaw drivers. Their inability to contact their families abroad owing to the switch-off must have added to the anxiety levels. (This year 27,000 Bohras felt reassured enough about security to come over to Karachi from various parts of the world for the Ashura).

Hurting digitization prospects xperts also say that such regular isolation from communication may hurt the country’s digitization prospects at a time when it envisages promoting knowledge-based economy and socio-economic growth. Billions of dollars have been invested on the back of mobile broadband services in Pakistan over the last few years and such disruptions are only going to discourage investors in the future. During 2015-16, total foreign investment in telecom sector stood at $246 million – around 13 % of the total FDI of $1.9 billion. In the ongoing fiscal in the first two months alone, foreign investment has increased by 155 %, going up to $457 million. However, one should not ignore the rather significant $2 billion the government has made since 2014 from the telecom sector through auction of 3G and 4G spectrum and taxes. The unhindered and now rather frequent practice of cellular network blockage on the pretext of security is a major bugbear of the industry. “Last year, Pakistan’s IT exports increased by 19%, touching an unprecedented level of $1 billion, clearly reflecting that the IT industry is so vital to the booming economy. However, for sustained growth, seamless access to Information and communication technologies is essential and such signal blockages are a major hindrance,” Khilji said. n

TELECOM

How two enterprising science students with next to no resources gave it a go and turned it into a success

By: Muzhira Amin

shall either find a way or make one, Hannibal Barca once said. This may best define the approach that led two science students, Shahzad Ahmed Khan and Zulfiqar Raja, into their first business venture.

It was in the 1990s when the duo was saddened to see the “exploitation of customers at the hands of corporate giants, the likes of GSK and Gilead Sciences”, which sold their equipment only to selected research labs and hospitals at “exorbitant" prices. This ultimately forced these hospitals and labs to transfer these costs to the consumers, which deprived lower income classes of these services. They had two options: either go with the system or take matters into their own hands and come up with a solution. They chose the latter. So one night they teamed up to start a new business, not sure where the money would come

Shahzad Ahmed Khan Co-founder SK Trading

from and whether the idea would be successful. Next, the duo, who had just completed university, quit their startup jobs, emptied their bank accounts and decided to open up their office in Karachi. Today, the venture is known as SK Trading Corporation, which deals in supply of laboratory instruments, diagnostic reagents, analytical equipment, pharmaceutical laboratory equipment and reagents.

From startup to sprawling enterprise hat commenced 17 years ago has by now emerged as a sprawling enterprise, for the major suppliers of scientific equipment now rakes in between Rs60 and Rs70 million in annual revenues – with up to Rs7 million in profit. Their clientele consists of more than 50 research labs and hospitals all over Karachi. SK Trading is not just about promoting sales of their quality products from respective clients but also to provide post-purchase maintenance and support by their qualified and trained service team. This has helped build a vibrant relationship within the corporate sector of healthcare and life sciences – to the benefit of the community. Now serving a diverse range of healthcare and R&D sectors, it includes pharmaceuticals, life sciences and diagnostic centres. It, however, was not a smooth sailing. Like most start-ups, Khan and Raja had a tough time, to begin with – arranging finance being the main issue. Due to high setting-up cost, even their families were not really optimistic. The price tag of the imported machinery and equipment, with government taxes and duties on top, was rather steep – run into millions of rupees. So the risk associated with the venture was certainly high. “Since I come from a middle-class

Zulfiqar Raja Co-founder SK Trading

HEALTHCARE

family, with a father who works for a living, I could not have possibly asked him to dish out a few million for me to set up my business”, said Shahzad Khan. The upshot was that they used their personal savings and resorted to borrowing from a bank, in the main using running finance to launch the business. “Initially we were barely reaching break-even, but we had eliminated the thought of profits from our minds. It was all about nothing but work back then,” Khan said. “But with time, taking one small step at a time, things incrementally got better and today we have grown from a trading company to a trading corporation,” he said. Looking back at his journey, Khan seems satisfied with the sacrifices he made for making the enterprise a success – in the process foregoing an opportunity to settle in New Zealand. “I knew that I would never be satisfied if I left all this behind,” said Khan, recalling how he abandoned his desire to move abroad for the sake of the nascent business.

The challenges hat said, building the business from the ground up didn’t come without challenges. For instance, for them hiring the right type of employees – who could work hard and smart – was an initial bugbear. Therefore the duo knew that they needed a team of like-minded individuals who could understand the nature of the business and despite the lows remain motivated. The staff was critical to the success of SK Trading. One incident that took place with them further made both Khan and Raja sceptical. Back in 2012, the company sent some staff on a trip to the interior Sindh to deliver blood testing equipment and bring back the cash. The employees eloped with the cash, never making it

'IT WAS IN THE 1990S WHEN THE DUO WAS SADDENED TO SEE THE “EXPLOITATION OF CUSTOMERS AT THE HANDS OF CORPORATE GIANTS, THE LIKES OF GSK AND GILEAD SCIENCES”, WHICH SOLD THEIR EQUIPMENT ONLY TO SELECTED RESEARCH LABS AND HOSPITALS AT “EXORBITANT" PRICES' back to the office, recalls Shahzad with a discernible edge in his voice. Eventually, SK got committed people. To-date they have a team of 15 who contribute in research and development of the company and selling of innovative and synthetic chemicals and reagents. The pharma industry of Pakistan is worth $2.3 billion, along with being the largest employer of university graduates in semi-urban and rural areas. However, Khan says it’s not easy to start a business in this sector because of the high initial costs involved. “Therefore, the industry consists of few major multinational firms that exploit the situation,” said Khan.

Wedded to new technologies and innovations han and Raja were motivated by the new technologies entering into the world of diagnostic sciences when they first stepped into this market. Despite these innovations all around the globe, the two partners noticed, the big and mushroom-type labs alike in Pakistan still followed the outdated path – with an archaic system, costing. The initial suppliers of the business to the people had two major names: the Aga Khan Hospital and the National Institute of Health. However, their prices were incredibly high. Due to high levels of competition from multinational companies belonging to the diagnostic field and some other

'THE RECENT CHANGE IN THE POLITICAL ENVIRONMENT IN KARACHI HAS MADE LIFE A WHOLE LOT EASIER FOR THE BUSINESS. RANGERS PRESENCE TURNED OUT TO BE GOOD FOR SEVERAL BUSINESSES IN KARACHI, SAID KHAN' 42

companies with vested interests that develop fake products in Pakistan, SK Corporation started importing their equipment and then reintroduced it into the market as nominal cost-effective quality products. The B2B company has a total of 50 clients, but the number is increasing dayby-day, or so the partners claim. Major buyers of SK products are several government hospitals and few private research labs, like the Aga Khan Hospital & Medical College Foundation, Drugs Testing Laboratory, DOW University of Health Sciences, Skin diseases hospital, among others.

Competitive advantage he average turnover of SK Corporation is Rs62 million, but it shrinks after paying customs duties. Their profit after tax amounts to Rs6.5 to Rs7 million, lesser compared to other firms, says Khan. Most of their profits are reinvested in the growth of SK Corporation. SK Corporation claims it sells quality products at a relatively lower price, to maintain a competitive advantage as a small business. Customer and after-sales services are other areas of intense focus for the company. The company went through a tough phase some years back because of rampant violence and critical law and order situation. “In 2012, we got an official order from the government for two blood bank refrigerators, which we imported from South Korea. We delivered the order, but the payments never came,” Khan said. This left SK Corporation bankrupt. However, after a turbulent period, SK managed to recover and resume its growth trajectory. The recent change in the political environment in Karachi has made life a whole lot easier for the business. Rangers presence turned out to be good for several businesses in Karachi, said Khan. n

HEALTHCARE