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Wednesday, 12 December, 2012
Auto manufacturers blast FBR over misleading revenue figures g
IMF repayments may pressure C/A despite burgeoning remittances
Say government collects more revenues from auto industry g Disprove FBR’s revenue losses of Rs 17bn KARACHI
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STAFF REPORT
HE local car and auto parts manufacturers Tuesday appealed to the Standing Committee of the National Assembly on automobiles to cross check their facts on duties and prices of the used imported cars and locally made cars from the industry instead of relying on figures provided by, what they said, vested interests. The appeal was made by the members and officials of Pakistan Automobile Manufacturers Association (PAMA) and Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) here at a briefing Tuesday. Chairman PAAPAM Munir K. Bana said commercial import of used cars was officially banned but instead of prosecuting the flouters of this ban, the government bodies, including Federal Board of Revenue (FBR), were backing the criminals issuing forged and misleading figures. Bana alleged that FBR had wrongly claimed that age limit reduction of the used cars might cost the kitty Rs 17 billion per annum, based on duties/taxes collected during 12 months of 2011-12 on approx 56,000 imported used cars. “In fact, the revenue generated by the government on similar quantity of vehicles manufactured by the local industry would have been Rs 21.5 billion, exceeding the levy on used cars by Rs 4.5 billion per annum, an increase of 26 percent,” he said. Citing an example, he pointed out that on a Corolla manufactured in Pakistan the FBR was getting government levies equivalent to $5,568 while on similar imported car the total government revenue was only $4,400. The chairman PAAPAM said the foreign exchange component of a Corolla car was $5400 while similar five years old used car is imported at $10,682. “This means that the state not only loses on revenues but also in foreign exchange when any five years old car is imported,” he
added. In case of three years old used car the duty component was higher at $7040 but the foreign exchange component is also higher at $11600. Bana said the OEMs and burgeoning auto parts manufacturing industries, consisting of over 3000 SME units, the backbone of the auto industry ensuring uninterrupted supply of hitech auto parts for assembly of all kinds of vehicles, deposited around Rs 80 billion per annum into the government treasury. Sharing an example, he said the local addition in Corolla was equivalent to $4400 per unit. “These parts are produced by local auto vendors that provide jobs to thousands of workers whereas in case of used car there is no local component and every component is made in a foreign country thus the jobs are created outside Pakistan,” the chairman said. Bana said the above facts also belie the FBR claims where they state that no manufacturing existed in Pakistan and all auto parts were imported by the assemblers from Thailand, Japan etc. “It is also unfortunate that the FBR has also not even mentioned the colossal foreign exchange losses suffered by the government, as a consequence of imports of used cars. It is a known fact that import cost of CKD for a new vehicle is lower than 50% of an average C&F cost of a used vehicle,” he added. He said based on this apparent
gap, the import of 56,000 used cars in 2011-12 resulted in foreign exchange outflow of US$ 454 million as against US$ 218 million, that would have been incurred on similar quantity of CKD kits for local assembly of vehicles i.e. a saving of US$ 236 million. DG PAMA Abdul Waheed pointed out that the used car import was allowed so that the consumers could get automobiles at low rates. However, the statistics proved that the prices of used cars were comparatively much higher or same as that of Pakistan made new cars. “The price of brand new Pakistan made Corolla is $16900 while a five years old imported used car of same engine size is sold at $15100 and this small difference of $1800 is not worth driving a five years old car,” he said adding that a similar three years old car is sold in the local market at $18600. “Is it worth buying a three years old car at higher price than a brand new car,” he questioned? He said all the car manufacturers in Pakistan provide two years performance warranty of the cars they sell. Moreover they guarantee availability of all spares and repair of these vehicles at their dedicated workshops. In contrast, there is no warranty for the used cars. He brought to the notice of the National Assembly Committee that while even 20 years old Pakistani models are
still plying on the roads one would hardly see an imported used car surviving on our roads five years after import. “This is simply because the spares of most of these cars are not available locally and whenever a used car breaks down due to want of spares they have to be imported by air,” he said adding that the spares are costly as they cannot be imported in bulk making the maintenance cost of these vehicles exorbitant. Representative bodies of local OEMs and auto parts manufacturers said that It would be in the best interest of the government to encourage local auto industry, as both assemblers as well as APMs are fully documented industries and pay their fair share of taxes, besides providing employment to over 2 million persons. On the other hand, used car imports is not only a misappropriation of concessionary benefits meant for Overseas Pakistanis but it is a crime in the sense that the expatriates’ documents are misused to arrange commercial imports of vehicles in their names. The PAMA and PAAPAM members also appealed the government to trace and bring all the used car dealers into the tax net so that they become fully documented and pay their due share of taxes. Used car dealers’ association should also be registered with Directorate of Trade Organizations to prove which expatriates they representing and in what capacity they had been authorized to sell the cars gifted by them for their families’ p e r sonal use.
KARACHI STAFF REPORT
The worker remittances, which totaled at $ 5.98 billion during first five months of the current fiscal year ranging from July to November (FY13), are said to be a major supporting head on the country’s current account list. “The consistent upward trend in the remittances is providing support to the current account as during the 4MFY13 it was witnessed with the surplus of $258 million,” said Abdul Azeem, an InvestCap analyst. Overall, the analyst said, the decline of 25 percent was observed in total remittances to $1billion in November as during the month of October a huge remittance of $ 1.37billion was witnessed due to Eid factor. However, 5MFY13 remittances recorded growth of 14 percent YoY to $ 5.98billion. Saudia Arabia was the most prominent source, as its share reached to 27 percent, up by 0.9pps YoY during 5MFY12, thereby becoming the largest contributor to remittances. Home remittances coming in from the UK experienced massive growth of 42 percent YoY (+ $252mn) during 5MFY13. However, Abdul Azeem warned that the IMF payments were more than likely to exert pressure on the current account deficit. Moreover, he said, due to lower imports and rising exports, the trade deficit showed a diverging trend by posting 7 percent YoY decline in 4MFY13. Despite the global economic slowdown exports posted growth of 5 percent YoY in 4MFY13. The major contributor remained the textile group exports, which improved by 5 percent YoY, said he. Going forward, the analyst said, the textile exports were estimated to be the prime driver for the growth in exports as its cotton yarn segment posted colossal growth of 37 percent. The exports were being supported by the cotton yarn demand coming in from China and Hong Kong. On the other hand, declining in oil prices is one of the major reasons behind the declining in import bill.
World economic variations Comment HAssAn Ayub ‘The world has become a global village’; this has become more of a cliché now. Although this is true, however the duelers of this world have been experiencing the most variable economic conditions across the globe. Since the rise of Industrial Revolution and subsequently the emergence of the free market economy, the term Economic System has become move of a system of distributors and receivers forming the status quo. During the centuries of colonisation, the world powers collected the resources from around the world. It is interesting to note that the poorest nations of the world were the richest in natural re-
sources! The whole Industrial Revolution and the economics façade of the world economic powers was erected from the blood and sweat of the poor nations. Industrial Revolution and free market economy has promoted a system of the concentration of wealth .Amazingly only 20 richest people of the world have more than half wealth of the total world. The economic disparity has made this world, a world in which there are average per capita income is more than $13,000 whereas most of the central African an Sub- Saharan are living at an ebb of less than $200 per annum. The Economic war between the worlds corporate has made the poor countries a war ground and the poor a fuel. Take the example of Sierra Leon, a country rich with diamonds, yet the whole nation has been
facing an inferno of civil war for more than ten years. The diamonds which are sold are actually blood diamonds. The concept of trickle down system of economy, has decided the fate of poor nations; they only get, what rich has left. An American economist said “There is no such thing as a free lunch, someone has to pay for it.” The rich nations due to this economic variation have become debtors and the poor nations, the borrowers. This tender borrower relation has further caused an extreme disparity among the people of rich and poor nations. The race for capturing world economic resources among the powerful nations have left the macrocosm under a cloud of smoke, smoke that is emitted by the insinuated bodies of the poor. The free market economy has made
the rich further rich and poor penny less. This system of free market moves with a philosophy ‘feed the horses, so the birds would get their food! The world Institutions’ such as IMF and World Bank are also the contributors for this system of economic disparity and Variation. These Institutions are in actual Controlled by the rich nations; their policies and function manifest the desires of large rich Economies. The people of poor nations have been further squeezed through a control of their Internal Policies. The hard earned GDP of these poor nations is gulped by these Institutions in the name of debt retirement a debt that has never been utilised by these people. It is interesting to note that the poor nations of the world are the most populated
countries, and that makes these countries large consumer societies, the societies which are a market for these big corporates. The hard earned money is taken away by the large corporates through alluring and enticing techniques of advertisement. The free market economy and the corporates have become leaches, sucking the blood of poor nations. The plundering of resources and exploitation of needs has been further agar voting differences between different nations. Every year millions of terms of wheat and medicines are thrown into oceans, but the hungry people are left to face hunger and ailing are left to face death because free market economy does not allow free distribution which may cause market imbalance.
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All eyes on PAkistAn Spain eyes Pakistan for augmenting below $1bn bilateral trade KARACHI
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STAFF REPORT
PANISH Ambassador to Pakistan Javier M. Carbajosa Sanchez Tuesday said his country could cooperate with Pakistan in areas ranging from fashion textiles to perishable items like fruits as Spanish firms were now focusing more on the emerging Asian markets. “Cooperation can be materialized in the areas of fashion textiles, banking, shipping, transportation, pharmaceutical, dairy, fruits etc.,” said Sanchez during a visit to the Karachi Chamber of Commerce and Industry (KCCI) Tuesday. He endorsed that prospects to enhance Pak-Spain trade do exist. Political relations between the two countries were good, however, trade relations needed to be enhanced. He said media was portraying an “unfair picture and perception” of Pakistan which was different from reality. To attract investment, safety security, political stability, infrastructure and utilities are of prime importance. He noted that many Euro-zone countries were facing economic slow-down, however, Spain would revive its economy on a fast-pace. He said Spain was the world leader in renewable energy in wind, solar, etc. and Spain produces 23 percent energy from renewable sources which was highest in Europe. The Spanish cellular phone service
provider O2 was the first cellular service provider in Europe, but Asia was traditionally not a commercial priority of Spanish firms. “However, Spanish companies are now concentrating on Asian markets,” said the envoy. Earlier, President KCCI Muhammad Haroon Agar urged the ambassador to ask Spanish investors to invest in renewable energy solutions in the energy-hungry Pakistan. Agar said Spain, being world leader in solar power, had enormous potential to invest in alternate and renewable
energy solutions and help Pakistan in technology transfer. He said that Pakistani textiles, fashion and leather garments, sports goods, fruits had excellent potential to be exported to Spain. Present trade volume less than $ 1 billion was far below than potential and serious efforts were needed to enhance Pak-Spain bilateral trade. Major items of imports from Spain were machinery, iron and steel products, ceramic products, boilers, telecommunication equipment, chemicals etc. Pakistan seeks Spain’s support to get GSP plus status and fair access to EU market. Keeping in view mounting economic crises in Europe there was a need to develop close ties between Spain and Pakistan and get mutual benefits. Pakistan can help Spain to expand its trade to Central Asian countries, China, India and Middle East while Spain in turn could help Pakistan expand its trade with European countries, in transfer of technology, human resource development, import of human resource to Spain etc. Agar also proposed the signing of an MoU between KCCI and Barcelona or Madrid Chamber of Commerce to enhance exchange of trade information, trade delegations. According to KCCI, Spanish exports have doubled in last 10 years, reaching 134 million euro in 2011, showing a steady progress, though still much journey ahead. Imports enhanced from 194 million euros in year 2000 to 429 million in 2011.
KHUSHHALI BANK, MEDA AGREE TO FACILITATE ENTREPRENEURS ON MICRO-FINANCING KARACHI STAFF REPORT
The Mennonite Economic Development Associates (MEDA) has recently signed a Memorandum of Cooperation with Khushhalibank to promote economic development and access to finance in Pakistan. MEDA is an international nonprofit making organization working in various countries all over the world, and implementing USAID’s Entrepreneurs project through key
partners in Punjab, Sindh, Baluchistan and KPK. The USAID-supported entrepreneurs project aims to significantly increase the incomes of 75,000 mostly women micro-entrepreneurs engaged in dairy, hand embellished fabrics, beekeeping and medicinal plant collection across Pakistan through production and quality improvement, access to better markets and business service providers such as micro-finance institutions. The main objective of this col-
laboration is to provide sustainable solution for access to finance by micro-entrepreneurs. Both organizations agreed to identify potential micro-entrepreneurs and help facilitate meetings with those willing to avail microfinance facilities from Khushhalibank. They also decided to take appropriate measures to prepare business plans for interested micro-entrepreneurs, improve their technical skills and linkage development with market. MEDA agreed to strengthen links of
Khushhalibank with these businessmen and women including regular communication, coordination and counselling. At its end, Khushhalibank pledged to provide orientation of its microfinance program to the implementing partner organizations, introduce their programs to potential borrowers for their better understanding, select eligible groups and individuals for microfinance services as per its policies and provide them with the necessary loans requested on merit.
Business 02 Major Gainers COMPANY UniLever Pak Sanofi-Aventis Pak Pak.Int.Cont. SD Salfi Textile Service Industries
OPEN 9801.00 352.00 228.46 141.97 168.00
HIGH 9950.00 368.00 239.88 149.06 175.00
LOW 9850.00 368.00 232.60 149.06 170.00
CLOSE CHANGE 9897.83 96.83 368.00 16.00 239.88 11.42 149.06 7.09 174.99 6.99
TURNOVER 2,440 100 25,500 4,000 3,300
1530.00 4800.00 433.00 314.00 283.50
1530.00 4795.00 432.25 300.00 261.99
1530.00 4800.00 433.00 302.09 266.06
-80.00 -40.00 -22.00 -10.91 -9.57
100 2,100 200 1,400 37,800
18.25 14.22 24.70 6.62 95.99
16.96 13.50 23.05 6.42 93.00
17.26 13.79 23.41 6.45 93.55
-0.57 -0.12 -0.84 -0.13 0.98
13,894,000 8,859,000 7,794,000 7,209,500 5,590,500
Major Losers Bata (Pak) Nestle Pakistan Ltd. Shezan Inter. Exide (PAK) National Foods
1610.00 4840.00 455.00 313.00 275.63
Volume Leaders Jah.Sidd. Co. Maple Leaf Cement Sui North Gas Fauji Cement Engro Foods Ltd.
17.83 13.91 24.25 6.58 92.57
Interbank Rates US Dollar UK Pound Japanese Yen Euro
97.2583 156.3621 1.1787 126.0273
Dollar East BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
97.30 125.64 155.70 1.1693 97.70 12.36 26.38 25.87 101.27
SELL 97.80 127.08 157.44 1.1824 99.30 12.56 26.65 26.10 103.86
HSBC pays record fine to settle US money-laundering accusations HSBC is to pay a record $1.9bn (£1.2bn) to settle allegations that it laundered money for drug cartels and broke sanctions in the US to allow terrorists to move money around the financial system. In the latest embarrassment for Britain’s banks, the HSBC chief executive, Stuart Gulliver, said he was “profoundly sorry” as he confirmed the scale of the fine. It is the largest ever for such an offence and even greater than the £940m the bank had feared it faced after the allegations first surfaced in the summer in a report by the US Senate. “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again,” he said, insisting Britain’s biggest bank was “a fundamentally different organisation” now. The fine for HSBC comes barely 24 hours after Standard Chartered paid £415m to US regulators, and as banks such as Royal Bank of Scotland and UBS brace for a wave of fines in coming days for attempting to rig Libor following the £290m penalty slapped on Barclays in June. MOniTORing dESk
CORPORATE CORNER Karachi women entrepreneurs meet US official
KARACHI: Vice President FPCCI (Federation of Pakistan Chamber of Commerce & Industry) Begum Salma Ahmed invited Executive Director Sarah Peck of the newly formed U.S. Pakistan Women’s Council to meet the leading women entrepreneurs of Karachi at Federation House. The meeting between the US official and Karachi’s women entrepreneurs was a frank exchange of views and a lively interaction where many promising proposals were discussed in detail. The participants agreed that women’s participation in Pakistan’s development would ensure a bright future for the country. President-elect WCCI Kausar Junejo, President Young Women Entrepreneurs Naazish Lutfullah also participated in the meeting.
Banks to facilitate public in exchanging demonetised Rs 5 banknote KARACHI: State Bank of Pakistan (SBP) has asked the banks operating in the country to issue necessary instructions to their branches to facilitate the general public in exchanging demonetized Rs 5 banknote by December 31, the end of this calendar year. All banks should
display posters/banners regarding the last date for the exchange of the demonetized Rs 5 banknote at public counters and other visible places in and outside their branches, the State Bank said in a Circular issued to the Presidents/Chief Executives of all commercial and microfinance banks (MFBs). Neither SBP/SBP BSC nor banks will exchange or pay any value of such banknote to any person or institution after the above-mentioned deadline (December 31, 2012), an SBP circular said. It may be recalled that the last date for exchanging this banknote from the field offices of SBP Banking Services Corporation (SBP BSC) and branches of all banks is December 31, 2012, till banking hours.
Nova Nordisk Symposium on Public Awareness Diabetes Programme ISLAMABAD: Nova Nordisk the world’s biggest maker ofinsulin, recently arranged a sensational Public awareness program on diabetes mellitus that was held at a five-star hotel in Islamabad. The inauguration of this event was opened by the General Manager, RanaAsfarZafar. During the event, speakers shared their knowledge and insight on diabetes mellitus. Specially invited international speakers Senior Vice President, Mr. Yesper Holland, and Vice President (BANE) Dr. Ole Molskovbech, shared their cases on the latest research of diabetes mellitus, its causes and its treatment with the audience. More over the Chairman of Institute of Medicine, Professor Jamal Zafar, Dr.Bilal bin Yunus from Shalimar Medical and Dental College (Lahore) ,Baqai Medical University’s Asst. Prof., Dr. ZahidMiyaan, also shared their views on the pathogenicity and epidemic nature of the disease in Pakistan.
Etihad Airways and Alitalia PTCL holds fun filled direct Rome-Abu Dhabi services go-karting activity LAHORE: Alitalia, Italy’s flag carrier has begun direct services from Rome to Abu Dhabi with a celebratory flight to the capital of the United Arab Emirates (UAE) and the flight was greeted by a traditional water canon salute. Also greeting the flight were H.E. Sheikha Lubna Bint Khalid Al Qasimi, UAE Minister for Foreign Trade, H.E. Giorgio Starace, Italian Ambassador to the UAE, H. E. Ali Majed Al Mansoori, Chairman of the Abu Dhabi Airports Company (ADAC), and senior executives from Etihad Airways. Alitalia are operating the new flights in conjunction with codeshare partner Etihad Airways. The launch of the new direct Rome-Abu Dhabi service follows last August’s announcement that the Italian carrier would fly four weekly return Airbus A330 services between the two capitals.
KARACHI: National Bank of Pakistan (NBP) held a press briefing on creating awareness about NBP product, the press briefing was given by Shaheryar Qaisrani, EVP/Divisional Head, Agri Business Division CRBG; .Pervaiz Taj Bhatti, SVP/Consumer & Retail Banking/SME; .Adnan Adil Hussain,SVP/Divisional HeadCRBG, Farooq Hassan,SVP/Divisional Head-Business Development,CRBG and Syed Ibne Hassan, vice President / Divisional Head(A) Corporate Communication & Brand Management Division.
ISLAMABAD: Pakistan Telecommunications Company Limited (PTCL) held a day long go-karting event for its employees in conjunction with the earlier held Annual Sales Conference. Held at the go-karting track in Islamabad, the event was organized as part of PTCL’s efforts to develop team building and to synergize and invigorate its employees. The activity offered a chance to various departments to come at one platform and develop mutual coordination and team work. Go-karting is one of the most popular forms of motor sports in the world. It is not only a great way to spend a fun filled day with family and friends, but is also considered a stepping stone towards professional racing.
Wednesday, 12 December, 2012