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Volume - 2 Issue - XVIII - October - 2012 Price: PKR - 150
INSIDE
25-26
23-24
EDITORIALS - 19-22
Of the judicial outreach An unforgivable regulatory failure In the grip of a visionless lot Of immunity unlimited, and what it implies
33-34
INFORMAL
POLITICS - 23-30
E
FORMAL
C
Drone strikes: will the US listen to reason? As the war drums beat Of the “unlimited” freedom of expression Strategic ally alias “sacrificial goat”
O N
ECONOMY - 31-38
Signs of improvement in Indo-Pak relationship Informal economy and its effects Extending Afghans stay to cost Pakistan Sino-Japan strained relationship: Where the Asia is heading to? US Free Trade Agreement - Case for Pakistan
O M Y
TRADE & INDUSTRY - 39-46
Industrial & Agricultural Trade: Key considerations Automobile Industry in Pakistan Factory fire in Karachi: biggest in Pakistan’s history Pakistan lose on Global Competitiveness Index 2012-13
BANKING & FINANCE - 47-50
The defective performance yardsticks Growth of branchless banking in Pakistan
BUSINESS - 51- 52
REGULAR FEATURES
Sanitation Sector in Sindh – A Roadmap for Reform
INFORMATION & TECHNOLOGY -th57-58 Web Index ranks Pakistan 44 among 61 countries
Regeneration Power-stem Cell Technology Money Laundering
AGRICULTURE - 68-70
‘Superfoods' that will eliminate the global hunger in future
74
Sectarian scourge-Where are we heading to?
HEALTH & ENVIRONMENT - 55-56
EDUCATION & TRAINING - 65-67
68-70
SOCIAL ISSUE - 73
Role of Social Media in developing small businesses
RESEARCH & DEVELOPMENT - 59-61
41
11-15 16-17 53-54 62 63 64 71-72 74 75-76 77 78 79-80 81 85-86 87 89-90
Global & National Briefs Voice of Industry - In brief Regulatory Compliance Quotes Monthly Stock Market Review Monthly Commodity Review History Art & Literature Events Science & Technology Discovery Travel and Tourism Sports Your Horoscope - Oct 2012 Trend Entertainment
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Editor’s note
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Need for soul searching
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In September every year, the Pakistani nation observes with reverence the death anniversary of Quaid-e-Azam Mohammad Ali Jinnah. This year, however, the month was loaded with events- an upsurge in terrorism, sectarian violence manifesting religious intolerance, targeted killings, protests and demonstrations, loot and arson and several others- that overshadowed the observance of the death anniversary of the Father of the Nation. Karachi was the worst affected. Almost a dozen or even more were killed every day. According to media reports, around 300 persons were killed during September in Karachi alone. Only on September 27, at least 10 persons, including workers of political and religious groups, were killed in various parts of Karachi. In Quetta the same day, the militants gunned down two men on sectarian grounds. They belonged to the Shia community of the Muslims. The writ of the government was nowhere to be seen as there is no let up in these incidents. Besides, there were several incidents of fire in offices, factories, shops leading to loss of precious lives and properties. The death and destruction caused by the fire in a garment factory in Baldia, Karachi – the biggest in the history of Pakistan-still continues to haunt human memories. On the other hand were widespread devastations caused by recent floods and heavy rains. Sindh was the worst affected where, according to National Disaster Management Authority (NDMA), 2.8 million were affected compared to nearly 890,000 in Punjab and 700,000 in Baluchistan. Nearly three lakh people across the country have been forced to live in relief camps while around 360,000 affectees are reportedly still left without shelter. The Chief Minister of Sindh, Syed Qaim Ali Shah told the media the other day that each affected family had been provided with Rs. 300,000 and Rs. 400,000 by the provincial and federal governments respectively. The financial support claimed to have been extended deserves appreciation. But, considering the extent of the devastations caused, this by no means is adequate. Much more needs to be done for relief and rehabilitation of these people. More recently, the nation went through a sad experience of killings, loot and arson by uncontrolled, unruly mobs that had seemingly infiltrated into the ranks of those who had gathered under the banner of ‘Ishq-e-Rasul’ (PBUH) to stage protest demonstrations against blasphemous film. What started as a protest metamorphosed into a chaos which left at least 25 people killed and hundreds injured besides widespread damage to public and private property. The message of peace and tolerance preached and practiced by the Holy Prophet (PBUH) was thus blown away by the clouds of tear gas. Surprisingly, those who had prompted people for the protest were nowhere to be seen. So was the case with the government functionaries and political leaders; it was time they should have come out of their safe havens and lead the people from the front. None of this sort was evidenced anywhere.—not even in Islamabad. Contrarily, ‘Tahaffuz-e-Namoos-e-Risalat Rally’ (PBUH), called by Jmaat Ahle Sunnat, and participated by thousands on September 29, registered a peaceful protest against the anti-Islam film produced in the United States. We are not alone in intolerance; the entire world is increasingly polarized and fractured along fault-lines of faith as was evident from the series of protests and demonstrations against the blasphemous film held throughout the world over wherever Muslims inhabit. But, unlike the one we witnessed in Pakistan on September 21, the mobs everywhere showed their anger within a degree of discipline. They were organized and peaceful. What we witnessed on the streets in Pakistan on September 21, calls for soul searching. Did it serve the cause of Islam or of the country? This is a big question that needs to be answered by the people, the political leaders and the government alike.
Letters to the Editor
Agha Hassan Abedi: a human par excellence I read with great interest (and admiration) your above article in monthly Value Chain (September, 2012). I read many articles on Agha Sahib’s extraordinary and remarkable personality. Your article, however, reflects his personality much more concisely and faithfully in a (very) limited space. Sincere thanks from all of us–the BCCians and the beneficiaries of Agha Sahib’s vision and his good deeds. I intend to compile selected material on Agha Sahib, including published articles. I hope you will permit inclusion of your article in that compilation–if it comes through, Insha’Allah! Swaleh Naqvi Karachi September 1965 war; the turning point I quite agree with the author that the1965 war was a turning point in the history of Pakistan. The progress made over 17 years since the creation of Pakistan was lost in a 17-day war between India and Pakistan. In the pre-war era, the regime installed via the martial law of 1958, allowed Pakistan to develop a solid industrial base that gave a substantial boost to the economy. The course of events that followed the Martial Law created a sort of economic imbalance between Eastern and Western wings. The 1965 war slowed economic progress, and the distress caused as a consequence of the war widened the gaps between the people of Eastern and Western wings that ultimately led to Pakistan’s break-up. The aftereffects of the 1965 war are being felt even today, as evidenced by the state of the economy. As stated in your article, today, the country confronts its worst ever financial crisis with macro-economic indicators at their lowest-ever levels.
10 www.valuechainmagazine.com
The efforts being made to improve IndoPak relations are a good sign. Sooner this aim is achieved the better since this might help divert some of the resources, hitherto spent on defence, to welfare and economic progress, so badly needed by both. Muhammad Zawwar Karachi More time (yet again) Showing leniency on 18 September in its hearing of the case known as the “Letter to the Swiss authorities”, Supreme Court allowed one more week to Prime Minister Raja Pervez Ashraf to comply with the court’s order in this case – a reflection of the honorable judges’ desire to settle the issue amicably. Having seen the government’s attitude so far, it is not likely that it will comply with the Supreme Court’s orders in letter and spirit. To gain further time, it may come up with excuses, or draft a letter that the Supreme Court may not approve. If the PM does get the letter drafted according to the spirit of Supreme Court’s order, he would be responding to the call of his (?) conscience and meeting his obligations to the people of Pakistan. The fund lying in Swiss banks belongs to the people of Pakistan. Altaf Husain Multan Fair Elections The coalition regime completes its term in mid-November. Thereafter a caretaker government could be installed, provided the present government decides to hold elections on time. The caretaker regime would be mandated to hold free and fair elections in 90 days. You rightly mentioned that, going by the track record of elections held in Pakistan, barring the ones held in 1970, it is highly improbable that elections will be fair. The new Chief Election Commissioner has time and again showed his determination to ensure impartiality and fairness of the elections, a hugely daunting task in our political environment. But if, despite that, he succeeds in holding free and fair elections per his promise, this would be a feather in his cap. God bless him. Liaqat Husain Lahore Banking sector’s profitability I read with keen interest the Value Chain (September 2012 issue), especially the article on “Banking sector’s profitability.” Pakistan is passing through critical times especially because of its economic slowdown, driven in particular by prevailing political uncertainty and the energy crisis, but bad law and order due sectarianism, targeted killings, extortionists’ activities, and a host of other problems, have made things worse.
If despite that the ‘big five’ banks posted collectively a profit growth of 17 percent in the first half of the year 2012, over the same period of 2011, it is commendable indeed. But you have very rightly pointed to the fact that, despite impressive results banking sectors “risk aversion portrays dampening investor confidence the cost of which would be multi-dimensionalreduced economic activity, shortages of all types, unemployment, social chaos…” I hope the banking sector gives a serious thought to your advice that “becoming risk-averse or hiking up their spreads to ridiculous levels isn’t the solution that the banking sector has so far opted for.” Fatima Ansari Islamabad Corporate Farming The idea of corporate farming proposed in the article “Corporate farming; impact on small farmers and the economy” was interesting and deserves appreciation. Agriculture is our mainstay–key sector of the economy. Yet, it wasn’t able to grow to a level it should have grown, mainly because of capital deficiency. Corporate farming presents both opportunities and challenges, but as you pointed out, this is inevitably related to developed industrial economies. It may not be a bad idea to promote corporate farming provided it does not have an adverse impact on the farmers, especially the small farmers. This could be ensured by mandating housing, healthcare and insurance for the farmers. Aamir Hussain Faisalabad Shining India In your article “Shining India: how true is that” you have portrayed a true picture of the human psyche, especially in India and Pakistan. People can go to any extent for self-aggrandizement using all their mental faculties to justify their biased actions, as being done now. Sarmad Khan Sialkot “Value Chain” welcomes the views of its valued readers. Please send us your views on the address below: Fatima Khalid Publications (Pvt) Ltd. Room No. 612, Clifton Centre, Block 5, Clifton, Karachi Email: ask@valuechain.com.pk The Editor reserves the right to edit your letters for making it brief or for any linguistic flaws therein.
BRIEFS
Global Politics Canada breaks off relations with Iran: Canada closed its Tehran embassy and expelled Iranian diplomats on September 7 expressing concern for the mission’s safety and slamming Iran’s support for the Syrian regime and its threats against Israel. Pakistani woman becomes Norway’s minister: Norwegian Prime Minister Jens Stoltenberg has appointed a Pakistani Muslim woman, Hadia Tajik, as Norway’s Minister of Culture. Hadia is the first ever Muslim cabinet member and youngest ever government minister in the Scandinavian country.
The shuttle flew more than 185 million kilometers (115 million miles) in its two-decade career and completed its final mission last year. After the space agency NASA brought an end to the 30-year shuttle program last year, major US cities battled for the right to house one of the craft.
India launches 100th space mission: India successfully launched on September 9 its 100th space mission carrying two foreign satellites from the spaceport of Sri Harikota in the southern state of Andhra Pradesh.
Pak woman Saeeda Warsi becomes Britain’s deputy FM: British Prime Minister David Cameron on September 4 removed Baroness Saeeda Warsi from co-chairmanship of Conservative Party and appointed her as a Foreign Office and Faith and Communities Minister.
UN urged to probe Arafat assassination: Arab foreign ministers on September 5 called on the United Nations to probe the circumstances of the death of veteran Palestinian leader Yasser Arafat, amid suggestions that he was poisoned. British Prime Minister David Cameron on September 4 reshuffled his ailing coalition government. Cameron promoted Culture Minister Jeremy Hunt to the health ministry. George Osborne is heading finance ministry again while Paul Deighton, a top official credited with delivering a successful London Olympics, was given a key ministerial role in the Treasury. Transport Minister Justine Greening becomes
international development minister while former chief whip Patrick McLoughlin takes over ministry of transport. Ken Clarke was removed from the justice minister’s job and given a roving role as a “wise head” in government, with Chris Grayling becoming the justice minister. In his first such move since the government came to power two years ago, Cameron is seeking to rejuvenate the Conservative Party element in the cabinet as he looks ahead to the 2015 election.
US space shuttle lands in LA after final flight: The US space shuttle Endeavour took its final flight, making a spectacular series of fly-pasts over California before landing in Los Angeles(LA) where it will retire near its birthplace. Riding piggyback on a specially fitted Boeing 747, the shuttle flew over San Francisco’s Golden Gate Bridge before heading south to take in the Hollywood sign and Disneyland, later landing at LA international airport. The shuttle will be transferred to the California Science Center, where it will go on display on October 30.
India allays Sri Lanka's fears over Tamil Nadu nuclear plant: India has once again assured Sri Lanka that the Kudankulam nuclear power plant in Tamil Nadu's Tirunelveli district has high safety standards and it is no threat to Sri Lanka. The High Commission of India in Colombo in a statement, responding to local news reports raising fears of the dangers to Sri Lanka arising from the Kudankulam Nuclear Power Plant, reiterated that the Indian government "assigns utmost attention to nuclear and radiation safety, including the safety of operating personnel, public as well as the environment."
Tehran does not intend to enrich uranium beyond 20 percent: Iran’s nuclear chief Fereydoun Abbasi has said Tehran does not intend to enrich uranium beyond 20 percent. Iranian news agencies cite him as saying that most of Iran's activities are geared at enriching uranium to 3.5 percent. www.valuechainmagazine.com 11
BRIEFS
Global Politics
Anti-US fury sweeps Middle East over blasphemous film: Anti-US protests by crowds, whipped into fury by a film that ridicules Prophet Muhammad (PBUH), erupted across the Arab world on September 14, leading to an explosion of violence in Sudan. Meanwhile, President Barack Obama vowed to “stand fast” against spreading anti-US violence raging in the Arab world. UN Secretary General Ban Ki-moon has appealed for an end to the violence over the anti-Muslim film. Libya’s new PM elected: Members of Libya’s 200 strong national assembly on September 12 elected technocrat Mustafa Abu Shagur as the country’s new prime minister in a close vote. He won 96 votes beating his rival Mahmud Jibril with just two votes.
Three Ex-Generals jailed in Turkey: A Turkish court on September 21 handed down 20-year prison terms to three former generals accused of plotting to overthrow the government in 2003. The three chief suspects in the trial, including alleged mastermind Cetin Dogan, former commander of the First Army, were initially given life sentences, which were commuted on the grounds that the alleged plot failed. The twoyear-long trial of 365 defendants including retired and active army officers wrapped up at the court in Silivri, near Istanbul, with the final testimonies of the last suspects accused of plotting against the ruling Justice and Development Party (AKP). Only 34 defendants were acquitted. Seventy-eight officers were sentenced to 18 years in prison and 246 to 16 years. 12 www.valuechainmagazine.com
Australian soldiers afraid of Afghan soldiers: Australian forces in Afghanistan have halted joint patrols alongside Afghan forces amid concerns about blasphemous film on Islam made in the US as it could spark more "green on blue" attacks by local soldiers. The decision came after International Security Assistance Force (ISAF) commander General John Allen directed all allied forces to suspend joint activities below kandak (battalion) level. Seven Australian soldiers have died in three attacks by ANA soldiers, and on August 29 three were shot and killed in a single incident. So far this year, 51 international service members have died at the hands of Afghan forces or militants wearing their uniforms.
That is more than 18 percent of the 279 international troops who have been killed in Afghanistan since the beginning of the year. Israel does not possess ability to strike Iranian nuclear facility: Only US can destroy Iran's nuke program. According to a study published by Center for Strategic and International Studies (CSIS), a well- regarded Washington-based think tank, only the United States has the capacity to both deliver the explosive payloads needed in the initial strike and effectively carry out follow-up strikes based on continued near - real - time intelli- gence. Israel does not have the capability to carry out preventive strikes that could delay Iran’s nuclear efforts for a year or two. The initial strike by United States Air Force (USAF) would aim to take out Iran's heavily-fortified uranium enrichment and research facilities and ballistic missile sites. Iran most probably will accuse Israel [of being] part of the strike and will try to retaliate, either by launching a Ballistic Missile on Israel carrying conventional or WMD (chemical, biological, radiological) and activating Hezbollah to launch cross border attacks against Israel. India rejects reports of missiles targeting Sri Lanka's strategic installations: India rejected news reports which claimed that Indian missiles were targeted at Sri Lanka's strategic installations as "completely baseless and fabricated". "We have seen news reports in some websites and in the print
media claiming that Indian missiles were targeted at Sri Lanka's strategic installations. These reports are completelybaseless and fabricated”, the Indian High Commission in Colombo said in a statement.
South Africa urges progress at UN towards more democratic, expanded Security Council: During the General Assembly's high-level General Debate, President Jacob Zuma of South Africa called for making the Security Council more democratic, with an expansion of seats and greater representation for Africa. He said that the Council has to be legitimate, democratic and transparent. Its current composition has a propensity for deadlock and paralysis even in the face of crisis. The President called for "more meaningful" representation of Africa in the Council. He said that the Security Council has to be expanded in both categories, with at least two seats for Africa in the permanent category and five in the non-permanent category.
Somalia’s new President Hassan Sheikh Mohamaud took office on September 16, calling for an end to terrorism and piracy in a nation mired in conflict for more than two decades. The Russian government gave deadline to US agency till 1st October to cease all operations in the country. Russia has accused the US of using its aid agency in Moscow to covertly influence the country's politics and elections, explaining its decision to expel the mission amid a wider crack- down on the opposition movement.
BREIFS
Global Economy Australia’s banks sail through IMF test: Australia's banks got top marks in an International Monetary Fund stress test Under the stress test, the IMF assumed a 5% contraction in gross domestic product and 35% drop in house prices— circumstances similar to the correction the U.K. underwent shortly after the start of the global financial crisis. Since the 2008 crisis, the IMF has stepped up surveillance of the global banking system and plans to assess the world's top-25 banking industries every five years, including those in Australia, Brazil and Japan. IMF urges Indonesia to continue fiscal reforms: IMF urged Indonesian authorities to advance with fiscal reforms, including re-orienting government spending towards social sectors and boosting revenue collections. Indonesia is expected to grow 6 percent this year, slower than 6.5 percent in 2011. Growth is seen picking up to 6.3 percent in 2013. Inflation is expected to end the year at 5 percent, within the authorities' target range of 4.5±1 percent. Zimbabwe in ‘Debt Distress’ due to $10.7b Overhang, Zimbabwe’s almost $11 billion in debt puts it in “distress” and impedes the southern African nation’s sustainability because it’s 113 times gross domestic product, the International Monetary Fund said. The country’s total external debt is “estimated at $10.7 billion at end-2011, of which 67 percent of GDP are in arrears. UK bank body bows out of Libor: The British Bankers' Association formally voted to surrender its role last week, more than four years after questions were first raised about whether banks were lying in their submissions to the setting that governs $350tn in contracts worldwide. The move came at the request of UK officials who plan to announce a new regulatory structure for the rate-setting process as part of a package of reforms. The rates serve as benchmarks for everything from US home mortgages to complex derivatives transactions worth billions of dollars. More than a dozen other banks and financial institutions are being probed on three continents for similar manipulation allegations. Gulf OPEC producers want Brent oil at $100/barrel: Gulf members of the OPEC, led by Saudi Arabia, would like to see oil prices stabilize around $100 a barrel as high prices could slow down economic
growth and hit demand. There is a consensus now between Gulf countries and in some non-Gulf members of the Organization of Petroleum Exporting Countries that $100 a barrel is a suitable price for both producers and consumers. Saudi Arabia and other Gulf countries have also increased their output in recent months following calls by the U.S. and other governments to make up for displaced Iranian barrels in anticipation of sanctions. On the other hand, Russia stressed need for stable & predictable oil markets for the long-term health of the industry and investments. Bangladesh economy 'stable': Bangladesh's economy has been graded as steady by Moody's. According to the international credit rating agency, the country is rated Ba3, which stands for stability, for a third straight year. Bangladesh now has a track record of resilient growth despite the contentiousness of its parliamentary democracy. However, trade shocks and delays in aid disbursement have weakened the balance of payment. According to the rating, Bangladesh is doing better than Sri Lanka and Pakistan. Sri Lanka Central Bank trims 2012 GDP growth estimate to 6.8 percent: Sri Lanka's central bank lowered its 2012 economic growth estimate to 6.8 pc from an earlier 7.2 percent, blaming drought for the second downward revis- ion this year. In March, the central bank cut the growth estimate to 7.2 percent from an original 8 percent due to tight monetary policy measures it implemented in February. Last year, the island nation's growth was a record 8.3 percent. Guinea secures $2.1 billion debt relief from IMF, World Bank: Guinea secured $2.1 billion in debt relief from the World Bank and the IMF Heavily Indebted Poor Countries (HIPC) initiative, paving the way for accelerated development of the minerals-rich West African state. Guinea is the world's top supplier of the aluminum ore bauxite and holds rich deposits of iron ore, gold and diamonds, but decades of political turmoil have left most of its people in poverty. World Bank approves $1.5 billion interest free loan to Ethiopia: World Bank approves new funding to improve delivery of education, health and other services for 84 million people.
Ghana signs $210m World Bank funded projects to sustain middle income status: The projects are the Ghana Commercial Agriculture Project worth $100 million, West African Agriculture Productivity Program ($60 million) and the Urban Water project (Additional Financing of $50 million). Greek economy to shrink 25% by 2014: The ailing Greek economy is on the verge of a 1930s-style Great Depression, as the Athens government predicted a 25% fall in GDP by 2014, putting intense pressure on the EU to relax the terms on the country's €130bn (£105bn) bailout package. The finance minister, Yannis Stournaras, said a decline in tax revenues and spiraling unemployment will deepen the country's four-year recession. Brazil’s Consumer Loan Rate Drops to Lowest Level Since 1994: Brazil’s interest rates on consumer loans fell in August to the lowest level since 1994, while default rates remained the highest in almost three years. According to the Brazilian Central Bank, average rates on consumer loans fell to 35.6 percent from 36.2 percent. Even as average loan rates fell, the consumer default rate in August was 7.9 percent, unchanged from July and the highest since 8 percent in November 2009. The company loan default rate rose to 4.1 percent from 4 percent a month ago. Mexico posts $175 million trade deficit for August: Mexico reported a trade deficit for August after a surprise drop in car exports, bolstering expectations for slower economic growth in the second half of the year. Total exports fell 0.33 percent in the month with a 15 percent drop in car exports to their lowest since January, overwhelming an increase in oil exports. Imports rose 1.24 percent in seasonally adjusted terms, helping to push the trade balance into deficit to the tune of $175 million. Argentina Economy seen picking up in 2013: Argentina's government expects the economy to regain some momentum next year after slowing sharply in 2012. Latin America's No. 3 economy should expand 3.4 percent this year and 4.4 percent in 2013. Annual economic growth hit 8.9 percent in 2011 and topped 8 percent in seven of the last nine years. Argentina foresees a primary budget surplus of 0.53 percent of gross domestic product this year, which should rise to 2.32 percent of GDP in 2013. www.valuechainmagazine.com 13
BREIFS
National Politics IOC warning to Pakistan: The International Olympic Committee has sent another strongly worded letter to the Government of Pakistan regarding implementation of the National Sports Policy of 2005 and warned the membership of Pakistan may be suspended in case it gets unsatisfactory reply.
Pakistan test-fires N-capable cruise missile: Pakistan on September 17 testfired it’s indigenously developed multitube cruise missile Hatf-VII (Babur), which has stealth capabilities and can carry both nuclear and conventional warheads up to 700 kilometers. Babur Crusie Missile is a low flying, terrain hugging missile, which can strike targets both at Land and Sea with pin point accuracy. Equipped with modern cruise missile technology of Terrain Contour Matching (TERCOM) and Digital Scene Matching and Area Co-relation (DSMAC).
UN Working Group in Pakistan to evaluate missing persons’ issue: On the invitation of the government, a team of United Nations Working Group on Enforced or Involuntary Disappearances has reached Pakistan to evaluate the issue of missing persons. The visit provided an opportunity to highlight the efforts being made by the government to address this important issue and to further improve the relevant procedures. The arrival of the UN team has sparked outcry in the National Assembly where PML-Q leader Raza Hayat Hiraj severely criticized the team for interfering in the country’s internal matters. The UN Working Group has recommended immediate suspension from service of all army and intelligence officers suspected of abducting citizens. The group has also demanded that these officers be tried in civilian courts and urged training courses on human rights for the organizations accused of enforced disappearances. 14 www.valuechainmagazine.com
Krishna terms visit to Pakistan very fruitful: Indian External Affairs Minister S M Krishna, on the last leg of his visit to Pakistan said in Lahore on September 9, that his visit to Pakistan was fruitful. He expressed the hope that dialogues between leaders of India and Pakistan will be successful. He said that India wanted a stable, peaceful and progressive Pakistan as sits neighbor. PML-N demands trial of army officers in civilian courts: Pakistan Muslim League (N) has strongly criticized Pakistan Army for restoring the services of its three retired generals with a view to court-martial for their involvement in NLC scam. The party demanded that these retired army officers be tried in civilian courts. Violence convulses country during protest against blasphemous film: Protesters, hurt by a blasphemous film made in the United States, convulsed Karachi, Lahore, Islamabad, Peshawar and other towns on the occasion of Youm-eIshq-e- Rasool (PBUH) on September 21, leaving up to 25 people dead and more than 160 injured. Karachi was the worst hit city where 18 people were killed and many injured. Unknown vandals plundered and set banks, foreign food centres, police patrolling vans and cinema houses on fire.
Mainstream leaders termed ‘Gorbachev’: Addressing a gathering of lawyers of Lahore High Court Bar Association on September 18, nuclear scientist A. Q. Khan termed the current mainstream political leadership of the country as ‘Gorbachev’ and said a big change was inevitable to save the country from collapse. He said repeating the same leadership and providing them with another chance to rule meant more frustration and chaos for the nation. He said the people of Pakistan should join hands with him to save the country instead of becoming jiyalas or matwalas.
Afghanistan bans all Pakistani newspapers: Afghanistan on September 22 banned all Pakistani newspapers, accusing the publications of supporting the Taliban and seeking to undermine the government.
PM Raja demands action against film makers: Prime Minister Raja Pervez Ashraf on September 24 called for strict action against those responsible for making the sacrilegious movie as well as an effective legislation at an international level to stop acts aimed at degrading any religion and faith in the world.
Show cause notices to NAB Chief and others: The Supreme Court on September 14 issued show cause notices to the NAB Chairman and seven others for their failure to recover public money or making arrests in the wake of the court’s verdict on Rental Power Projects. Supreme Court had rescinded all RPP contracts on March 30, 2012 and directed the NAB Chairman to proceed against all accused including former minister for water and power and the incumbent Prime Minister Raja Pervez Ashraf who caused a loss of billions of rupees to the national exchequer.
Russian president puts off trip to country: Russian President Vladimir Putin has postponed his maiden trip to Pakistan due to unspecified reasons, according to Pakistan foreign ministry. In the first week of October, Putin was to embark on the first-ever state visit to Pakistan by any Russian president. He was also scheduled to attend a quadrilateral summit with leaders from Russia, Pakistan, Afghanistan and Tajikistan. The visit was only postponed and the move will not affect ongoing efforts by Islamabad and Moscow to begin a new chapter in their relationship.
BREIFS
National Economy Consolidated fiscal deficit 8.5pc of GDP: According to Ministry of Finance, Pakistan’s consolidated fiscal deficit during 2011-12 was recorded at 8.5 percent of GDP, including 1.9 percent debt consolidation of Rs. 391 billion arrears of electricity and commodities. No signs of recovery in economy despite SBP policy rate cut: Pakistan Economy Watch on August 31 said that the country’s economy showed no signs of recovery despite recent cut in policy rate by the State Bank of Pakistan. The policy rate cut has not motivated commercial banks to start lending to the private sector as they still prefer to advance loans to the government. ADB lists factors impeding private sector investment: Philip C Erquiaga, Director General, Private Sector Operations Department of Asian Development Bank has said that a burgeoning circular debt, power sector issues, poor law and order situation and a highly adverse rating of Pakistan by the Moody’s are likely to result in low level investment of private sector. He said Pakistan lacks a proper policy and a comprehensive framework of investment that is often discouraging the private investors. Pakistan in talks to hand over Gwadar Port to China: Pakistan is reportedly planning to transfer operational control of its strategically important Gwadar Port from Singapore’s PSA International to a Chinese company. Cost of imported LNG: The government is reportedly planning to favour bulk consumers and power sector by allowing weighted average cost of imported LNG that would result in higher domestic sector gas prices. Exporters’ Funds stock in Russian bank: The Federal Government has reportedly made half-hearted effort to recover millions of dollars stuck up payments of Pakistani exporters from EEFC Bank, Saint Petersberg, Russia, which dishonored their Letters of Credit (L/Cs). The stuck up payments amount to $4,469,741.14 of five Pakistani exporters for shipments made to Russia during June-August 2008 against various L/Cs issued by EEFC Bank. FPCCI claims that when shipment documents were sent to the Bank, they were duly accepted by them. Ecnec hands over bypass project to Wapda: The Executive Committee of National Economic Council (ECNEC) has reportedly handed over the construction of bypass at the site of Diamer-Bhasha dam
project to Wapda to secure $70 million grant from USAID. BoI’s roadmap to improve FDI prospects: The Board of Investment has proposed to the Prime Minister a roadmap to improve the country’s foreign investment prospects by introducing certain amendments in Rules of Business in order to enable the board to approve, implement and monitor all foreign investment projects. The board has also underscored the need for establishing a one-window operation for the facilitation of investors on an urgent basis. ECC approves 30,000 MT sugar export to Tajikistan: The Economic Coordination Committee on September 4 allowed export of 30,000 metric tons of sugar from Pakistan to Tajikistan. The ECC also allowed deregulation of ex-refinery price of locally produced high speed diesel (HSD) with the assurance that its benefit will reach end-consumers. Pakistan’s tax to GDP ratio improved: According to Chairman, Federal Board of Revenue, Pakistan’s tax-to-GDP ratio has improved by 0.6 percentage points during the year and reached 9.2 percent from the lowest level of 8.6 percent during 2010-11. FBR suggests Pakistan, BD to finalize FTA: The Federal Board of Revenue has proposed that Pakistan and Bangladesh should liberalize their markets for each other and finalize the overdue Free Trade Agreement without further delay and non-tariff barriers at both ends which hinder the trade between the two nations should be removed by signing the FTA. Banks’ profit up by 27pc in 1HC12: All commercial banks combined showed a profitability growth of 27 percent to Rs. 60 billion in first half of CY12 compared to Rs. 47 billion in first half of CY11. Indian bank branch in Pakistan in March 2013: General Manager and Chief Executive, Bank of India, Singapore, Munir Alam, at a meeting with Karachi Chamber of Commerce and Industry on September 15 said that Bank of India was contemplating opening its branch in Pakistan before 31 March 2013. Discrepancies in Hydroelectric power project: The Kuwait Fund has sought the government’s contractual discrepancies in the Golden Gol hydroelectric power and its clearance from the Public Procurement Regulatory Authority before releasing loan for the scheme.
PIDE report on business activities: Pakistan Institute of Economic Development (PIDE) in its report entitled “Business Barometer” published on September 17, maintained that the business activity in Pakistan faces lull with overall ‘very low’ ranking of the business environment, highlighting the need for adopting policies to improve the climate. Pledge for investments in Pakistan: Alqarnain Group of Saudi Arabia has planned to invest $400 million in the first couple of years and would increase this investment to over $1 billion in the coming five years. Budget deficit swells to 191bn in 2 months: Pakistan’s budget deficit reportedly swelled to Rs. 191 billion or 0.8 percent of GDP in the first two months of the current fiscal year, despite getting the much awaited Rs. 114 billion ($ 1.18 billion) from the United States under the Coalition Support Fund. However, according to State Bank of Pakistan, the country’s current account deficit posted a surplus of $919 million during the same period as against the deficit of $261 million during the same period of last year. Gas discovery in Sindh: Italian energy group ENI on September 19 announced that it had made a significant gas discovery onshore Pakistan, located in the Kirthar Fold Belt region. The size of the discovery is currently estimated at between 300 to 400 billion cubic feet of gas in place and its delineation will require further appraisal. Textile sector pulls exports down: Severe energy crises, bad law and order situation and dwindling international demand is taking a major toll on the Pakistani textiles sector as exports reduced, while the country consumed $ 2.79 billion worth of crude petroleum and its products in July-August FY 13 which was 7.9 percent more than the amount consumed during the corresponding period of the previous year. Pakistan, India sign three agreements: Pakistan and India forged ahead, liberalizing trade between the two countries, as they formally signed three agreements at the end of the seventh round of commerce secretary level talks on September 21 to boost economic activity between the two countries. FDI records 105 pc growth in JulyAugust: State Bank of Pakistan reported on September 20 that the net foreign direct investment (FDI) witnessed an increase of 105 percent in the first two months of the financial year 2012-13 mainly on the handsome inflows of foreign portfolio investment. www.valuechainmagazine.com 15
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Voice of Industry Pakistan, Iran vow to boost mutual trade: The Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIM) and the Lahore Chamber of Commerce and Industry (LCCI) pledged on September 13 to boost mutual trade between Iran and Pakistan to $2 billion in a couple of years. TCCIM President Yahya Al Eshagh who headed a 24-member strong Iranian business delegation, and LCCI President Irfan Qaiser Sheikh signed the Memorandum of Understanding (MoU) to share resources and information and exchange business delegations. Later, addressing press conference, TCCIM President said that trade volume between the two countries can go up $3 billion to $4 billion in four years. KCCI and University of Karachi, under Universities-Industries Linkage programme of KCCI, signed MoU to promote entrepreneurship and produce professionals as per need of corporate sector and industries. KCCI’s President
Mian Abrar Ahmad and Karachi University’s VC Prof. Dr. Muhammad Qaiser termed this initiative a productive move by two leading entities of Karachi which believe in ownership and optimum reciprocating to society and the country. KCCI & KU, in the light of MoU, will hold monthly meetings, organize joint seminars, symposia, training sessions, workshops, coordinate student’s internship opportunities in various industries, provide mentoring to students for career management and skill development, identify research/survey requirements and feasibility studies. Reduction in GIDC welcomed: Yasin Siddik, Chairman, All Pakistan Textile Mills Association (APTMA), Sindh Balochistan zone, has welcomed the government decision to reduce Gas Infrastructure Development Cess (GIDC) and export refinance rate and said that export of textile sector is likely to increase by 10-15 percent during the next one year with support of relief recently announced by the government. 16 www.valuechainmagazine.com
Mr. Farukh Amil, Pakistan AmbassadorDesignate to Japan, visited the Karachi Chamber of Commerce & Industry and had a meeting with the President, Mian Abrar Ahmad. In the picture, Mian Abrar Ahmad, President of the Chamber is seen presenting Chamber’s Crest to Mr. Farukh Amil. Mr. Younus Muhammad Bashir, Senior Vice President, Mr. Zia Ahmed Khan, Vice President, Mr. Majyd Aziz, former President, Mr. Shamim Ahmed Firpo, Mr. Asif Nisar, Mr. Rizwan Abdul Razzak, Members of Managing Committee, Mr. Ateeq ur Rehman, Mr. M. Arif Balgamwala, Ms. Durreshahwar Nisar, Mr. Muhammad Arif, Syed Zafar, Mr. S.M.H. Rizvi, Secretary General and Mr. Anwar Pasha, are also seen in the picture.
Steel Re-Rolling Mills Association elects office-bearers for 2012-13: Ali Ahmad was elected Chairman of Pakistan Steel Re-Rolling Mills Association on 20th September, while Mian Murad Ashraf and Ghulam Ali Bhatia as Vice Chairman (Lahore Circle) and Vice Chairman (Karachi Circle), respectively, for the year 2012-13. The results of the newly elected office-bearers were, announced at 51st Annual General Meeting of The Pakistan Steel Re-Rolling Mills Association held at Lahore Chamber of Commerce and Industry. The Managing Committee of Karachi Chamber of Commerce & Industry, in its meeting on 27th September, 2012, elected unopposed Office Bearers for year 2012-2013. Mr. Muhammad Haroon Agar was elected as unopposed President, Mr. Shamim Ahmed Firpo elected as Senior Vice President and Mr. Nasir Mehmood as Vice President. The newly elected office bearers of KCCI assured that they will discharge their duties up to the entire satisfaction of KCCI members and the business community and will leave no stone unturned to achieve the objectives of the premier Chamber.
Business losses in Sept. 21 anti-film protest: The business community suffered losses worth billions after mobs went on a rampage across the country on September 21 during protests against the sacrilegious film. President of Islamabad Chamber of Commerce and Industry criticized the government for not taking any measure to protect private property. EU approval of duty free access hailed: Textile exporters have hailed the European Parliament’s approval of duty free access for 75 Pakistani items and hoped that passage of the waiver will lead to increase textile exports to the European Union by 30 percent and will generate significant economic activity in the country. Pakistan’s export of these 75 items to EU reportedly stands at USD 1.4 billion, which is about 27 percent of Pakistan’s total export of USD 5.1 billion to the European Union. LCCI urges early completion of water, hydropower projects: The Lahore Chamber of Commerce and Industry (LCCI) has urged the government to complete water and hydropower projects in the shortest possible time as an acute shortage of electricity is hitting hard the economic activities in the country.
In the photograph, Mr. Muhammad Haroon Agar, President, is seen with Mr. Shamim Ahmed Firpo, Senior Vice President and Mr. Nasir Mehmood, Vice President. FPCCI opposes proposal to form Pak-India Joint Business Council: President, FPCCI, Haji Fazal Kadir Khan Sherani has strongly opposed the proposal to form an India-Pakistan Joint Business Council in the presence of India-Pakistan Joint Chamber of Commerce and Industry (IPCCI) for maintaining regular and sustained dialogue between the two countries. Formation of a parallel Joint Business Council will only create misunderstanding and con- fusion among the business community of both the countries. He urged the government to strengthen IPCCI’s role further.
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Voice of Industry
Mian Abrar Ahmad, President of the Karachi Chamber of Commerce & Industry is seen presenting Chamber’s Crest to H.E. Mr. Peter Heyward, High Commissioner of Australia, at a meeting, at Aiwan -e-Tijarat. Textile exporters welcome proposed 50pc reduction in GID: Textile exporters have welcomed the Petroleum Ministry’s recommendation to 50 percent reduction in gas infrastructure development surcharge as it will help cut the cost of production of exportable goods. They maintained that textile industry is the only hope for revival of the country’s economy which is currently jolted by the high cost of doing business. Political parties asked to unfold their economic agenda: The Lahore Chamber of Commerce and Industry (LCCI) has written letters to all the political parties inviting them to unfold their respective economic agenda and share it with the business community. PAMA protests on policy initiative regarding motorcycle industry: Pakistan Automotive Manufacturers Association (PAMA) has protested that the local motorcycle manufacturers were not consulted prior to finalizing recommendations for the Economic Coordination Committee (ECC) of the Cabinet. In his letter to the Federal Finance Minister, PAMA Director General Abdul Waheed Khan pointed out that the government’s recent policy shift to offer hefty duty concessions on import of CBU is a matter of great concern for local industry. Any move in this regard will completely destroy the entire existing local industry. LCCI urges withdrawal of POL prices hike: The Lahore Chamber of Commerce and Industry has urged the government to withdraw recent massive hike in oil prices that is bound to jack up cost of doing business in Pakistan. It suggested that the government should cut the number of taxes on petroleum products.
APDMA urges govt to withdraw CGO: All Pakistan Motor Dealers Association (APDMA) has requested the government to withdraw suddenly issued Custom General Order (CGO) of August 31, 2012 which, according to the association, has axed the legal right to obtain the depreciation @ 1% per month on old and used vehicles imported by the overseas Pakistanis. The depreciation was calculated from the date of first registration abroad up to the date of entry into Pakistan. After issuance of CGO 13/2012 on August 31, 2012, there is no requirement to produce the registration book/export certificate for the clearance of old and used vehicles. Hence, no check/ authenticity for the imported vehicles would be ascertained.
Chairman KATI Ehtesham Uddin along with Mian Zahid Hussain is presenting Association’s shield to Director General Rangers, Maj. General Rizwan Akhtar at a luncheon meeting held at KATI. Govt. urged to fix procurement price of rice: Agri Forum Pakistan (AFP) Chairman, Muhammad Ibrahim Mughal has urged the government to immediately fix the minimum procurement price of basmati paddy at Rs. 2000 per maund and non-basmati at Rs. 1200 per maund to get maximum production to meet the domestic requirement as well as help increasing the rice export. Notifying TUF scheme lauded: Chairman, All Pakistan Textile Mills Association (APTMA), Mohsin Aziz has lauded the efforts of Minister for Textile Industry Makhdoom Shahabuddin and the Governor, State Bank of Pakistan for notifying the technology upgradation fund (TUF) scheme for textile industry. He said this facility should be extended to five years on the basis of depreciated value of the project instead of restricting it to one time. It will encourage self-finance and equity bases projects in the industry.
Pakistan Soap Manufacturers Association elects office-bearers for 2012-13: The newly elected unopposed officebearers are Sheikh Mohammad Ilyas as Chairman, Tariq Zakaria as Senior Vice Chairman, Shakil Ahmed as Vice Chairman. Six newly elected unopposed Members of Managing Committee are Mohammad Rizwan, Tariq Zakaria, AnwarulHaq, Sheikh Mohammad Ilyas, Ali Nawaz Hameed & Amir Abdullah Zaki. Amendment in Electricity Theft (Amendment) Bill 2012 lauded: The Lahore Chamber of Commerce and Industry (LCCI) has appreciated the Federal Cabinet for accepting demand for Electricity Theft (Amendment) Bill 2012 and declaring power theft a nonbailable offence with increase in penalties and imprisonment. All Pakistan CNG Association has urged the government to reduce Gas Infrastructure Development Cess (GIDG) for CNG industry as a reduction of Rs. 100 British Thermal Units (MMBTU) could reduce commodity price by Rs. 10 per kg. Value added textile sector facing financial crunch: Chairman, Towel Manufacturers’ Association of Pakistan (TMA), Feroze Alam Lari, has said that the value added textile sector is facing financial crunch as several incentives announced in the textile policy 2009-14 have not been provided. FPCCI denounces opposition to EU concessions package: FPCCI has denounced the recent request made by the European Apparel and Textile Confederation (EURATEX) to the European Parliament to reject the concessions package on Pakistani textile exports to the European Union, which was announced following the 2010 floods. The EU had announced a duty waiver on 75 dutiable products exported by Pakistan to Europe to compensate Pakistan for the setback to its economy which faced a loss of $10 billion due to the floods. www.valuechainmagazine.com 17
EDITORIAL
Of the judicial outreach
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ast month, the media reported the highlights of an address delivered by the Chief Justice of India (CJI) SH Kapadia on the ‘Jurisprudence of Constitutional Structure’, at the India International Centre. According to press reports, CJI advised courts to deliver only ‘implementable’ verdicts saying "Judges should not govern this country. We need to go by [this] strict principle. Whenever you lay down a law it shouldn’t interfere with governance. We are not accountable to [the] people. Objectivity [and] certainty enshrined in the basic principles of the constitution has to be given weight age."If the CJI was hinting at what goes on in Pakistan then he didn’t prescribe the right remedy. Judges can’t just sit back; they are obliged to point to the difference between right and wrong, more so if the regime they have to live with is like the one in Pakistan. The CJI pre-supposes that all governments (perhaps in India, though not everywhere) have the credentials and the capacity to govern. Impliedly, he assumes responsible governance by the regime in power. Would anyone want the reality to be otherwise, but is that really so? And if that is so, how come the humanity (including in India) is being made to suffer the worst economic recession since the recession that shattered the world during 1929-33, which many historians believe was also one of the major factors that eventually led to WW-II. If governance of the state has been as good as the CJI assumes, how come the so-called ‘exemplary’ democracies confront an un-surmountable crisis? And is it not the legal, constitutional, and moral obligation of the judiciary to stop mal-governance and corruption in its tracks? The honourable CJI then said something startling: “We [the judiciary] are not accountable to [the] people. At 64, that was the first time I heard that judiciary wasn’t accountable to the people. This, on the face of it, is his logic for the judiciary to insulate itself from worries over mal-governance. Obviously, our knowledge base is defective, not that of the honourable CJI. But, of late, doomsday seems coming closer, and fast, and the fact that many think that way, gives the feeling that, based on the ground realities, they are not wrong. Indeed the judges must abide by constitutional principles that demarcate (really?) powers between the judiciary, the legislature and the executive. Indeed, “The question which judges must ask is if it [court verdict] is capable of being enforced. Judges must apply enforceability test [to their verdicts].” But the problem is that the world isn’t static. As time passes, things change, especially the way crimes are committed, but the law doesn’t change as quickly. In fact, at times, vested interested within the legislatures ensure that laws are not updated to outdo the innovations in crime. Change being the undeniable reality of this planet, shouldn’t judges also feel obliged to point out the flaws/deficiencies in the law? Should the judiciary overlook this prime obligation because the in-power regime may refuse to bring about that change? In this context, the counter question the honourable CJI posed was “today if a judge proposes a policy matter and government says we are not going to follow, [then] are you
by way of contempt or implement it?" Impliedly, don’t insist on what the government won’t deliver. We are living through very strange times because the culture of passing the buck has become pervasive. It is this culture that my friend and one-time colleague Prabir Kumar Bose often describes very sadly but aptly as “everyone for himself and God for us all”. When practiced by a donkey cart driver, this philosophy may be ‘understandable’ (though not right), but when the top officeholders of the state tell you to adopt it, it sounds very dangerous and disappointing. Indeed judges can’t ask the executive to do what is rationally, logically and practically un-doable, but it is strange to suggest that if a judge points to an area wherein the executive is not acting despite options for equitable and better governance, that judge steps out of his or her ambit. The honourable CJI also overlooked a report by India’s Auditor General wherein it has been pointed out that, since 2004, the coal mines were auctioned in the most suspicious manner although, since that very time, the parliament has virtually been sitting on a set of proposals to cleanse this system. Surely, the proposals that India’s parliament neither discussed nor implemented, were ‘implementable’, and any judge asking why that wasn’t done won’t be asking the government to do the impossible; should a judge consider such a verdict ‘interference in governance’? Doing so, the ‘practical’ (rather than fair judge) takes the risk of being clubbed with a malfunctioning executive – last thing any honourable judge should aspire for. History proves that, eventually, all such judges regretted adopting this approach. People everywhere assume that their judiciary is the ultimate protector of their rights – an institution with powers to stop even state officeholders from violating peoples’ legal rights, but if this institution became only concerned about what the executive can or can’t do, it will lose peoples’ faith. For too long the myth that democracy delivers has prevented faulting the misdeeds of democratic regimes; it is in a kind of fashion. That is why this ‘fashionable’ class refuses to accept that, in its present form democracy can’t deliver, but courage –the commodity in short supply–is needed to do so. The real tragedy is that, this class that matters, shuns its obligations; it is still comfortable, and thus continues to lack the courage to accept its blunder, and won’t side with the ‘ordinary’ to ask that democratic regimes must consist of the competent, not slogan mongers. Tragically, however, this class doesn’t know that by its myopic conduct it is hastening a big social tragedy that will wipe out the comforts and the fashion (its love for defective democracy) that this class wants to go on practiceing recklessly forever. The English, French, Russian, Chinese and Iranian revolutions were destructive but ‘history repeats itself ’ is a cosmic truth. Only good governance of the state is the guarantee against revolutions; in this struggle, to fault the judiciary of ‘activism’ is a media-aided trap set by the vested interests–the ‘fashionable' class referred to earlier. www.valuechainmagazine.com 19
EDITORIAL
An unforgivable regulatory failure
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eptember reminds us of two sad events; death of the Quaid and the 1965 war with India. This year, two more sad events were added to that list: deadly fire in a factory in Lahore and a 10 times more disastrous fire in a factory in Karachi. These disasters highlighted a slide in regulation–the outcome of the drift of the bureaucracy into a, seemingly, bottomless pit of irresponsibility, neglect of moral and official responsibilities, and corruption, and among Pakistani lawmakers total lack of accountability skills (partly induced by their political links). Proof: Pakistan still relies on the British era Factories Act of 1937, although things have changed radically since 1937. While the inquiries ordered by SHC and Sindh government may take time to establish the role of the regulatory agencies, Civil Defence, emergencies services, SITE, and trade bodies, certain facts are clear even now. To begin with, blaming the factory owners is a weak excuse; can a business dare violate the regulations? True, businessmen of today find it a dumb idea to invest in adequate fire-fighting equipment because it doesn’t yield any profit, but should the state permit this? The plausible explanation of this failure is that the regulatory authority (that approved the construction plan of the factory burned down in Karachi) either lacks requisite ability to foresee the risk that a defective design foretells or approves plans in exchange for illegal benefits. Neither explanation absolves the regulator of its fundamental crime that eventually led to the factory’s destruction and the death of innocent workers. Next, who oversaw the construction of the factory premises to ensure that the structure complied with the approved plan because, it is now known, that the premises did not conform to the approved design; it was violated blatantly because the premises contained a full un-approved floor. Next, what has been the role of the ‘inspectors’ of the regulatory authorities? Wasn’t this ill-designed factory in operation for a number of years? If so, how come factory owners weren’t penalized for violating the construction plan? Unless a waiver was issued later on (if so, on what grounds?) for this violation, the only explanation for the continuation of this violation is periodic bribing of the inspectors. The next issue is even more shocking. In factories, especially those that consume inflammable items as their raw material or for running their manufacturing plants, it is necessary that fire fighting arrangements and emergency fire exits are not just adequate, but in working order all the time, and periodic fire-fighting drills ensure that employees know how they are to react to a fire emergency. This has to be ensured by one regulatory agency, be it the Civil Defence, Fire Brigade or the Department of Labour. Is it checked regularly? If not, most industrial units may be at risk. The harsh reality is that even huge retail markets with scores of shops selling inflammable items don’t have any fire-fighting gadgetry. Worse still, shops don’t keep even hand-held fire extinguishers. All this goes on despite repeated instances of destructive fires.
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That all these manifestations of recklessness of the business owners go on unchecked reflects a serious neglect of duty on the part of state bureaucracy–failure that the state can’t deny but will it accept it. The initial reaction of Sindh’s Industries Minister (who later on resigned) seemed passing of the buck. The other issue needing in-depth inquiry is the role played by extortionists in causing the disaster, and the factory owners’ greed that delayed employees’ exit before being checked for possible theft of factory goods. While government offices carry bulk of the responsibility for the disasters, banks financing such ventures share that blame because, prior to lending to industrial units, banks are legally obliged to verify that factory owners have complied with all: • regulatory requirements in terms of factory design, • regulations on installing requisite fire-fighting equipment, • installed fire-fighting equipment and alarms are adequate for the factory size, and spread all over the factory, • fire-fighting equipment is functional all the time, • emergency fire exits are adequate and open quickly, and • there is a verifiable practice of holding fire-fighting drills. It is unfortunate that beginning 2000, banks were allowed to out-source many of their essential functions including stock and factory inspection. Frontline bankers now have no idea of what to check in this context. The SBP should find out if banks lending to the factory in Karachi had visualized a fire tragedy because, earlier too a fire broke out in this factory. The banking sector regulator should re-examine its policy on permitting out-sourcing of vital banking functions because it has led to creation of huge gaps in the skills of the front-line bankers. Besides bad risk assessment, risk monitoring weaknesses that these gaps have created, account for rising non-performing loans that have crossed the Rs 650 billion mark–a trend that isn’t conducive for Pakistani banks’ image. As for the survivors of the hundreds who died in these two disasters, the immediate issue is to survive without incomes that their loved ones used to provide. In a TV talk show on September 12, a TV anchor demanded that the survivors be paid Rs 1 million, not half million, as in the past. Surely, the survivors aren’t keen to become millionaires upon the death of their loved ones. What they all want is a reliable source of livelihood; giving them a million or half a million Rupees isn’t the solution. The more sensible course would be to help them invest these sums in medium term debt securities that can provide them a monthly income close to what their diseased family members were earning. If families of the diseased are given hard cash, they are more likely to waste it, or be robbed in various ways by their deceptive ‘well wishers’. Once the orphaned children of the deceased come of age, and acquire some professional skills, they can use those funds to set up economic activities that they are capable of managing.
EDITORIAL
In the grip of a visionless lot
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overnments almost everywhere know precious little about their role. Yet another shocking example thereof was set by the regime in Pakistan that belatedly and tactlessly decided to observe what it called “Yom-e-Ishq-e-Rasool”, a day to express love for Prophet Muhammad (PBUH). The Muslim world is angry at the US government, and rightly so, for its refusal to punish the makers of the film insulting Prophet Muhammad (PBUH), but as per current US laws, the White House could only ‘request’ Google to take that film off the YouTube. But the same White House reacts angrily to religious “apartheid” that China is supposedly perpetrating in Tibet and in its own Xinjiang province. Lesson: while the rest of the world can’t overlook to punish those who commit sacrilegious acts, the US and the West are under no obligation to do so, and this is justified in the name of “freedom of expression”. Reportedly, Google turned down a White House request for taking the film denigrating the Prophet Muhammad (PBUH) off the YouTube stating that it can’t compromise its policy of supporting ‘free’ speech. In the past, however, it promptly acceded to such requests. In a script posted on ‘Counterpunch’, Essam Al-Amin has quoted an August 1 report of The Jewish Press that said that Google had promptly removed over 1,710 videos from its website because many of them “concerned” the denial of the Holocaust, or defended its deniers. Lesson: freedom of expression can be curtailed if it damages certain strategies e.g. of the Zionists, the US, the racists in Europe, and of those bent upon humiliating the Muslims, etc. ‘Reverend’ Terry Jones always finds it a ‘religious’ obligation to promote, in fact champion the events that Muslims everywhere consider sacrilegious. He has a well established record in this context, but was he ever questioned, let alone awarded punishment for his inflammatory acts that became more and more infuriating each time? The atrocities continue courtesy the ‘freedom of expression’ and are not punishable under the Western laws, because respect for religion is no more sacrosanct, and so insulting religion doesn’t bother regimes in the West. What does bother these governments is insulting their big wigs and the royals – the latest being the shocking photographs of Britain’s Prince William and his wife. No matter how many ‘rationally evolved, realistic, and visibly equitable’ (according to the West) arguments may be advanced in defence of sacrilegious acts, the refusal to mend the ways of “free expressionists” in the West is, and will go on widening the Christian-Muslim gulf – a trend that must be stopped in its tracks if the world is to become less violent and terrorists deprived of the muscle they acquire courtesy the provocative acts of the likes of Salman Rushdie, ‘Reverend’ Terry Jones, and others, who have lost their senses. Sacrilegious acts–disowned by governments of the countries where they were committed–greatly hurt the image of those countries over the years and the Christian-Muslim divide (big, shameful failure of regimes everywhere) only expanded. No Western government felt obliged to curb this trend. Even the UN did not feel obliged to act on this issue–something that places its
integrity in doubt–but blame for UN’s inactivity is shared by the Muslim states; it is the insensitivity of these states to this highly destructive issue that has so far failed to push the UN to institute a universal code of ethics under which acts falling within the definition of sacrilegious or degrading any faith or personalities considered sacrosanct by its followers, becomes punishable under the law, but after an in-depth inquest that establishes the offence beyond doubt. Is this not something that ought to have been done years ago and doesn’t it reflect a collective failure of these governments and the UN? UN Secretary General Ban Ki-moon now says that freedom of expression and assembly are "inalienable" rights but must be guaranteed and protected when used for common justice and common purpose. "When some people use this freedom to provoke or humiliate some others' values and beliefs, then this cannot be protected", and that "freedom of expression, while a fundamental right and privilege, shouldn’t be abused by such people, in such a disgraceful and shameful act." OIC Secretary General Ekmeleddin Ihsanoglu said in Geneva that OIC would revive its ‘long-standing’ efforts to render insults against religions an international criminal offence. The international community (a reference to the West) should “come out of hiding behind the excuse of freedom of expression” since “deliberate, motivated and systematic abuse of this freedom was a danger to global security and stability.” As the fire raged over the film about the Prophet (PBUH), a French satirical magazine ‘Charlie Hebdo’ poured fuel on the fire by publishing sacrilegious cartoons. Prime Minister Jean-Marc Ayrault said, those “offended by blasphemous cartoons could take the matter to the courts.” Doing so, he exempted Charlie Hebdo from legal action."We are in a country where freedom of expression is ‘guaranteed’, including the freedom to caricature" he added. Germany acted differently; it banned Reverend Terry Jones’s entry into Germany to join a meeting of the extreme rightist ‘Pro Deutschland’ group determined to screen the full-length version of the sacrilegious film. Indeed the resource-rich Muslim states, that supply the West with not only raw materials and energy, but also value-added goods, are in turmoil (courtesy the Western-inspired Arab Spring). It may be seen by the neocons as a success of the West. But the near-bankruptcy of the West too is a reality. Has not the dumb neocons’ strategy of bashing the resource-rich Muslim states cost the West dearly, and have not the creative abilities of the West become overly focused on lethal weaponry, that makes it overly dependent on the rest of the world? Closure of basic industries in the West, and overdependence on Asia, has left the West with no option but to revert back to its old strategy of colonization, scene for which has now been set by the Arab Spring that is de-stabilizing the resource-rich Middle Eastern countries, one after the other. www.valuechainmagazine.com 21
EDITORIAL
Of immunity unlimited, and what it implies
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o the ordinary, immunity for a state officeholder implies a shield against prosecution for wellintentioned acts commited with total honesty and sincerity in performance of official duties–an exemption that is imperative for ensuring that state officeholders perform, not sit back for fear of prosecution. But this shield should not protect acts committed as a state officeholder or in individual capacity, if the individual who either ordered or carried them out knew about the illegality of those actions. But, in the various cases currently being heard in the superior courts of Pakistan the stand being taken by the ‘learned’ legal defenders of the state officeholders is that, irrespective of the legal character of their actions, state officeholders should not be prosecuted as long as they hold a state office–exemption that the courts find difficult to offer owing to its dark public perception. The other issue facing the Supreme Court is that, if it punished the former Prime Minister for his contempt of court i.e. his refusal to write a letter to the Swiss authorities to reopen graft cases against President Asif Ali Zardari, then not punishing the sitting Prime Minister for the same offense would be seen as impartiality. But the Supreme Court has been prevented from meeting its obligations in deciding this critically important petition since December 16, 2009 when it declared the NRO as invalid and directed the government to reopen all cases that were closed courtesy the NRO. Reason: government’s refusal to comply with the verdict. For over thirty three months, the issue has dragged on, which manifests the respect the in-power regime has for law, and implementation thereof. The exit of the former Prime Minister Yusuf Raza Gilani did not diminish the determination of the regime to defy the law. Only after some of its own legal experts advised it to accept the condition of writing the letter and assured that the issue will be stretched for months did the new Prime Minister Raja Pervaiz Ashraf agree to write the letter to Swiss authorities. But since then, despite very precise instructions issued by the Supreme Court in its verdict of September 18, government’s legal aids are doing what they had promised–not drafting the letter the way the Supreme Court had directed. It is indeed shocking that the Federal Law Minister and legal advisors of the government put together can’t understand (is that so?) what the court verdict had instructed on September 18; in the first hearing full seven days after the September 18 court verdict, a draft of the letter presented to the court (by none other than Federal Law Minister), besides not fulfilling the court’s directives, contained the wrong reference number of the letter earlier written by the government, which has to be withdrawn. It only proves the rumours that this is what the government’s legal advisors had promised–stretching the issue by repeatedly flouting the court’s instructions on draft-ing a letter including the key four facts stipulated in the court verdict of September 18.
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In the hearing on September 26, this was done again though, in the case hearing on September 25, the court had warned the Federal Law Minister not to repeat the errors in the text to be provided to the court on September 26. The seemingly deliberate attempts at defying court’s instructions eventually forced the court to say that "We expect that no further delay would be sought in the matter as a further delay may infringe upon the bona fides of the federal government prompting us to proceed in the matter of contempt forthwith." The biggest single error that a government can commit is to defy the law; such an act sets the worst example for a nation to follow. Unfortunately, that’s what the present government has been doing throughout its tenur and trying to convey the impression that the judiciary is stopping it from performing its constitutional duties. Sadly, the several Attorney Generals (with one exception) that the regime hired helped strengthen this impression. The current Attorney General was told more than once to be mindful of the way he addressed the judges. Quite visibly, the trick aimed at angering the judges to prove that the judiciary is anti-government, didn’t work. The fact is that, over the years, the Supreme Court exposed corruption in state offices, dozens of incidents of the misuse of taxpayer funds, frauds whose amount ran into billions of Rupees, and the fact that this gross mismanagement of the state was not accidental but organized and pervasive, with accountability at the lowest priority. The impression that gained acceptance is that the judiciary was trying to contain corruption, not in any way stopping the government from performing its duties in accordance with the law. This style of governance, wherein flouting of the law is a way of life, can hardly attract investment in economic activities to build the industrial-commercial base that’s needed to provide a sustained source of employment for 3.5 million young boys and girls that join the category of adults every year. But none of the politicians in the coalition regime is bothered about this ticking bomb that is becoming bigger every year. This is that huge but angry reserve of energy that is being capitalized on by the extremists. In the countrywide riots on September 21, this huge reserve of angry energy showed its colours; the worst is yet to be exposed. Hazrat Ali (RA), who set memorable examples of imparting justice, at times even at his cost, said something that summed up human history in few words. He said that even states with regimes of non-believers would survive if they ensure that all their citizens are treated justly, but Muslim states that fail to deliver justice will be dismembered by God, because the very basis on which the whole universe was created is justice. This saying, let alone the divine message brought by Holy Prophet Muhammad (PBUH), is enough to highlight the importance of justice, but only those who believe in the life hereafter and final divine justice, bother about dispensing justice, not those who believe only in the life they spend on this planet.
POLITICS
Drone strikes: will the US listen to reason?
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he first sign of initiation of global action to contain the US drone strikes was an August 2012 report that Ben Emerson, the UN Special Rapporteur on the violation of human rights, drafted on the ongoing highly questionable drone strikes. It didn’t occur to the policymakers, either in the White House or the Pentagon, that besides violating the post-WW-II UN war regulations, a mute admission that the White House had authorized CIA to carry out drone strikes, had compromised the US government’s position. Over a year ago, ‘Reprieve’, a UK-based organisation, and its Pakistani partner Foundation for Fundamental Rights (FFR), had commissioned an independent study by the International Human Rights & Conflict Resolution Clinic of Stanford Law School, and the Global Justice Clinic at New York University to investigate the impact of the drone attacks on Waziristan’s population, and on the image of the US in Pakistan. Analysts were facilitated in this exercise by FFR, and the long exercise collected facts to file a petition against the US government to force it to clarify its alleged policy of supporting CIA’s drone strike programme through intelligence-sharing. The research spanning over nine months, conducted two key investigations through 130 interviews with victims, witnesses, and experts, and reviewed thousands of pages of reports that appeared in the media over the past eight years. The findings of these investigations reject Washington’s version of the use (precise and accurate) of drones, and conclude that drone strikes are counter-productive; they kill innocent civilians, terrorise people in the tribal areas, deprive children of education, and go as far as targeting the rescuers. According to the report’s findings, beginning June 2004 until mid-September 2012, the assembled data indicate that drone strikes killed between 2,562 to 3,325 people in Pakistan. Of the dead, the number of civilians could be as high as 881 and include 176 children. The drone strikes also injured between 1,228 to 1,362 individuals, many of them disabled for life. In March 2011 a single drone strike on a gathering of the tribal elders killed about 40 individuals. The report says that “The number of high-level militants killed as a percentage of total casualties is extremely low–just 2%”. Evidence also suggests that drone strikes facilitated recruitment to violent non-state armed groups and motivated more violent attacks. Because the drone attacks are imprecise and hit the innocent, they “terrorise men, women and children twenty-four
by A.B. Shahid
hours a day.” The impact the drone strikes have had on the society of Waziristan, has been devastating; they have restricted the religious practices related even to burials making even family members of the dead to abstain from attending funerals. The worst part is that, families who lost their sole bread earner or their homes in drone strikes cannot support themselves. This was revealed in detailed interviews with people in Waziristan that included victims of drone strikes, humanitarian workers, and medical professionals. According to that report the “civilian casualties are rarely acknowledged by US government but there is significant evidence that drone strikes injured and killed civilians.” That this drone programme has unprecedented ability for distinguishing “between an alQaeda terrorist and innocent civilian” and of conducting strikes with astonishing ‘surgical’ precision, is not correct. The US drone policy should be re-evaluated in the light of significant evidence of its damaging impact on Pakistani civilians and US interests, and that this programme is ‘counterproductive’. Neither US policy-makers nor the American public can afford to “continue to ignore evidence of the civilian harm” this programme causes. The report demands of the US to explain under what laws is it carrying out its drone attacks? The report wants independent investigation into the drone strikes and the US obligation for respecting human rights and international laws on the use of force. The report asks journalists and media outlets to give up the flawed practice of only referring to “militant deaths” without offering any details thereof. According to the report “In the United States, the dominant narrative about the use of drones in Pakistan is of a surgically precise and effective tool that makes the US safer – enabling targeted killing of terrorists,
Civil casualties are rarely acknowledged by the US although there is significant evidence that drone strikes injured and killed many civilians
In the United States, the narrative about use of drones is as a surgically precise and effective tool that makes the US safer is untrue www.valuechainmagazine.com 23
74%) of the Pakistanis now consider the US their enemy. The report adds that US drone strike practices undermine respect for the rule of law and international legal protection by setting dangerous precedents. The report casts doubts on the legality of strikes on individuals or groups not linked to the terrorist attacks of September 11, 2011, and who do not pose imminent threats to the US.
George Bush wanted to cause a global “War on Terror” without borders; it took Obama’s “Drone War” to achieve his dream.”
with minimal downside or collateral impact. This narrative is false.” Contrary to it, “publicly available evidence that the strikes have made the US safer is ambiguous at best; the strikes certainly killed alleged militants and disrupted armed actor networks though serious concerns over the efficacy and counter-productive nature of the drone strikes have been raised. The number of high-level militants killed as percentage of total casualties is extremely low– 2%.” The report thus demands that the US should: • release the US Department of Justice memoranda outlining the legal basis for targeted killings in Pakistan; • make public the critical information concerning the drone strike policy, including (previously and repeatedly requested by various groups and officials) the targeting criteria for so-called “signature” strikes; • the mechanisms in place to ensure that targeting complies with international law, and which laws are being applied; • the nature of investigations into civilian deaths and injury, and mechanisms in place to track, analyse and publicly recognise civilian casualties; • ensure independent inquest into deaths by drone strikes consistent with the call by Ben Emerson, UN’s Special Rapporteur (in August 2012) on promotion and protection of human rights and of the fundamental freedoms while countering terrorism; • in conjunction with robust investigations (where appropriate, with prosecution) establish compensation programmes for civilians harmed by US strikes in Pakistan; The report demanded that the US must fulfil its international humanitarian and human rights law obligations with respect to use of force including not using lethal force against people who are not members of armed groups with whom the US is in an armed conflict, and individuals not posing an imminent threat to life. Rejecting the US policy statement, that drones have secured the US, and quoting the findings of a very recent survey, the report says that drone strikes had soured many Pakistanis on cooperation with the US, and had undermined US relations with Pakistan because a high proportion (in fact,
Drone strikes go much further than killing innocent civilians. An entire region is being terrorised by constant threat of death from the skies
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About the contents and conclusions of the reports, Shahzad Akbar, Director FFR who is also Reprieve’s ‘Legal Fellow’ in Pakistan said “This report by US academics has established what we have been saying for years. Drone strikes are illegal, largely terrorising the civilian population in Waziristan, and pushing them to militancy. The world can’t expect us to love the US when it kills women, children, elderly, and innocent civilians as indicated by this report. The report will help poor victims in their quest for justice and due process.” Clive Stafford Smith, who is Director of Reprieve, said it showed “that drone strikes go much further than simply killing innocent civilians. An entire region is being terror-ised by the constant threat of death from the skies. Their way of life is collapsing; kids are too terrified to go to schools, adults are too afraid to attend weddings, funerals, business meetings or anything that involves gathering in groups. Yet there is no end in sight and nowhere the ordinary men, women and children of the north west Pakistan can go feeling safe. George W. Bush wanted to cause a global “War on Terror” without borders; it has taken Obama’s “Drone War” to achieve his dream.” What Shahzad Akbar said is what the saner elements, in both the US and Pakistan, have been saying for years. In Pakistan, this element included a lot of Pakistanis who wanted the US-Pakistan relations to continue, but were branded as anti-US. Drones hovering twenty-four hours a day over north western Pakistan, striking homes, vehicles, and public spaces without warning terrorises men, women, and children giving rise to anxiety and psychological trauma among them. Those living under such threats are facing a constant worry i.e. a deadly strike may kill them any time and the knowledge that they are powerless in protecting themselves has psychological impact on their behaviour; it is hurting them irreparably. That an area was hit multiple times, and the evidence that it killed even rescuers, leaves these people with only one idea–the US is monstrosity. Surely, taxpayers in the US did not ask any administration to become a monstrosity, but successive administrations beginning with film ‘actor-turned president’ Ronald Reagan, neocons took charge of the US turning it into a monstrosity–something the ordinary God fearing Christian Americans never wanted.
POLITICS
As the war drums beat by Merlin Miller
I
contemplate my recent trip to the Islamic Republic of Iran and ask myself who wants war between America and Iran. I quickly surmise that it is not the American people, nor the Iranian people, but globalists (inter- national bankers and their multinational beneficiaries). They control Israel, the American media and most of our politicians… and by extension our foreign policy. My journey to this exotic and little understood land began with an invitation to “New Horizon – The First International Independent Filmmakers Festival”. It was a conference and festival held in Tehran from September 2nd through September 7th. Filmmakers and intellectuals from around the world attended. It was one of the most stimulating experiences that I have ever had and an effective bridge between diverse cultures and perspectives – with the purpose of promoting truth, justice, liberty, and peace. This initiative was undertaken, not by America or other world leaders, but by a country unfairly besieged with sanctions and threats of war. My observations were in stark contrast to the perceptions of most Americans. What I experienced was a devout country with a love of God, family, and nation – and an uncompromising respect for the noblest of human endeavors. As I write this, a giant, beautiful book, Rubaiyat of Omar Khayyam, lies next to me. Khayyam’s wonderful poems have survived the test of time and are a testament to the normally peaceful spirit of the Persian people. This treasure was given to me by President Mahmoud Ahmadinejad.
Inside its back cover, he inscribed the following for me (transcribed from Farsi): In the name of God who loves human beings. My dear brother: I, you, we and all of us are pursuing truth and happiness for human beings, which is unfortunately a victim of world powers. This is a historical opportunity to undermine all inhuman relations and put an end to prejudices, which have questioned the truths and separates them, to build a new beautiful world based on love, justice and beauty. This is a historical and certainly achievable objective. It only needs our hands, minds and hearts to join each other. I pray Great God to bless you, who love humanity and wish success for all. I hope to meet you in a better future. (signed) M. Ahmadinejad, September 8, 2012 I found President Ahmadinejad to be a humble man with a firm handshake and intense, intelligent eyes. Despite his courteous and dignified bearing, he has been regularly berated, and routinely misrepresented, by a controlled western media. Is their demonization justified, or has he been targeted as the lone political figure standing against Zionist powers? This is my attempt to represent truths, such that the world might have a better understanding of Iran, its people, and its leadership. The Iranian people are similar to Europeans in appearance... a beautiful people, poised and kind. Their women wear clothing which modestly cover them but in an elegant fashion and with serene faces that are usually exposed. They return smiles and are not treated as second class citizens, as we have been conditioned to believe. In fact, they outnumber men in higher education enrollments. There is no profanity and women are www.valuechainmagazine.com 25
safe on any Tehran street – at any time of day or night. The influences of western civilization have not been totally removed, but the Iranians resist the decadence of culturalMarxism. I attribute this largely to their faith and love of family. I was surprised to discover that the Islamic faith actually honors Jesus and Christianity. However, through Zionist media control, policy dictates, and other manipulations, the Christian world is incessantly convinced that Muslims should be our enemies and that we should be theirs. Muslims look with jaundiced eye upon the outrageous media lies and perpetual assaults on their faith and culture. Hollywood’s promotion of twisted films can provoke extremist reactions, and we are then led to believe that Muslims are all radicals. We never question the bizarre promotion of these divisive, Zionist inspired productions, or the actions of multinational interests in the internal affairs of sovereign Islamic nations. Were we to look honestly at the many false portrayals, we would see remarkable similarities to how our Christian communities have also been assaulted – increasingly with contempt and disrespect by these same Zionist and Cultural Marxist propagandists. They seek a globalist new world order – devoid of the diversity and freedoms associated with independent nation states. As I wandered from the festival grounds to meet people on the streets, I found them to be most helpful and without animosity –despite my obvious American nationality. I enjoyed their exotic food and came to appreciate the craftsmanship of their products. The only negative sensation that I had was in witnessing the mad house traffic situation in Tehran. A city of 15 million, it has grown faster than it’s infrastructure. Despite this, the city is thriving with new construction and beautiful parks and monuments – which reflect a noble and accomplished people. The Iranians seemingly love Americans, but are rightly concerned and critical of our irrational and invasive government policies. The common response seems to be “why would your country want to attack us?” The current condemnation of Iran is supposedly due to the possibility that they may develop nuclear weapons. We should all work for a world free from nuclear threat, but the sovereignty of nations must also be respected. Iran is signatory to the Nuclear Non-Proliferation Treaty and has opened their facilities for inspection, declaring their interest is for energy development only. No evidence to the contrary has been shown, and Iran’s Supreme Leader, the Ayatollah Khamenei condemns nuclear weaponry – actually declaring a “Fatwa” against them – as it is contrary to their nation’s faith. However, Israel, their chief accuser (and architect behind the campaign that falsely accuses Iraq of possessing “weapons of mass destruction”), is believed to possess over 300 nuclear weapons. Israel is not a signatory to the Nuclear NonProliferation Treaty, and has no intention of sharing information or opening their facilities for inspection – yet America continues to march to their fanatical war drums against others. Why is there no pressure on Israel to meet the same standards and why are we imposing “sanctions” against a nation that has done us no wrong? It is a preliminary act of war, and only imposed because Israeli lobbies demand it of our lap-dog politicians, who incredibly serve Zionist interests rather than the American people. Iran is a strategic rival for regional hegemony in the resource rich middle-east and has stood strong for Islamic unity. They also courageously and most justifiably call for an end to the Palestinian 26 www.valuechainmagazine.com
Merlin Miller served several years in the US Army and commanded two units and then worked as an Industrial Engineering Manager for Michelin Tire Co. In 1983, he was accepted in the University of Southern California’s Peter Stark Motion Picture Producing course graduating in 1985 with a MFA degree. He has since been an independent screenwriter, motion picture producer / director, and media instructor. occupation – the ruthless suppression of an enslaved people, largely funded by America. There is no greater injustice than that being perpetrated against the Palestinian people. World condemnation, through the United Nations is consistently blocked by U.S. actions on the Security Council. As a result, the Non Aligned Nations Movement (NAM) is growing as an alternative to the UN. Its recent success is not generally reported in Western media, but 120 nations came together in Tehran the week before the New Horizon Film Festival – in unity and in opposition to the evils of the Israeli occupation of Palestine. The Secretary General of the United Nations even attended, as well as observers from Russia and China. The Palestinian occupation and Israeli aggressions (including “false flag” operations against other nations) are at the root of the discontents for Zionism. As President Ahmadinejad gave me a copy of Khayyam’s works, I gave him copy of my western motion picture, “Jericho”, and my political book, “Our Vision for America”. When I asked him what messages I might convey to the American people, he indicated “truths” and “Iran’s desire for peace”. Through lies and evil acts, Globalists and Zionists falsely portray Iran, as they seek conflict between nations. I later told him that our State Department should be meeting with Iran’s leaders and not depending on the initiatives of private citizens, like me. However, I hope that he and the Iranian people take hope in the prospect that many patriotic Americans are awakening to the evils that have consumed us, even while our politicians continue to betray the otherwise good spirit and traditions of the American people. Growing numbers seek answers that might save America and truly promote world peace. Americans do not want war, and are beginning to realize that our politicians, of both major parties, initiate these actions against the wishes of the American people – and in accord with the intrigues of international bankers and their Zionist agents. It is time we stopped them by creating alternatives in politics, and in media. Iran sees the need and is taking appropriate initiatives, and so should America. I went to Iran to promote the prospects for producing “False Flag”, a critically important motion picture. I returned to America more committed than ever to produce this political thriller and, through commercial entertainment, help awaken a sleeping America. Vital truths must be revealed so that new evils are not perpetrated against the people of America and Iran, with destructive effects resonating throughout the world. I also return committed to building a viable third party, which will represent traditional working class Americans, rather than perpetuating a corrupt two party system, which serves special global interests. God willing, my answer to the courageous efforts of President Ahmadinejad is “I also hope to meet you in a better future”.
POLITICS
Of the “unlimited” freedom of expression
F
reedom of expression is sacrosanct. No one can be denied this fundamental human right though what many (in the West) overlook is a bigger reality: exercise of this freedom must not hurt the feelings of others. In recent years the exercise of this freedom in the West caused frequent unrest in Muslim world and prolonged disruptions of economic activity that added to the poverty there–outcomes that serve to reinforce the view that sacrilegious acts are intended to serve this purpose. Beginning with a sacrilegious book authored by UK resident Salman Rushdie, to Danish cartoons, and the latest instance–the sacrilegious video posted on YouTube–it continues. The US Secretary of State might be telling the truth in promising that the US government had “absolutely” nothing to do with this video. “We absolutely reject its content and message; to me personally this video is disgusting and reprehensible.” No one accused the US government of a role in this affair, but if it is “reprehensible”, how did the administration react to it? The US bought time on Pakistani television networks to run a series of adverts in its bid to stem protests at an “amateur” anti-Islam film. In the advertisement, US President Obama is shown saying that “Since our founding, the United States has been a nation that respects all faiths… We “reject” all efforts to denigrate the religious beliefs of others.” The ad campaign that reportedly cost over $70,000 aims to disassociate the US administration from that inflammatory film. Shouldn’t the US administration react to it in a more credible way? If the episode is “reprehensible” why couldn’t a judge in the entire US judicial system take suo moto action against it? Doesn’t this laxity confirm the fact that there are no laws in the US against such immorality? The first amendment to the US Constitution is against circumventing free speech and many subsequent court verdicts bolstered that effect. In the 1960s, in the Brandenburg vs. Ohio case, the court ruled that “constitutional guarantees of free speech and free press don’t permit the State to forbid or proscribe the advocacy of the use of force.” The interpretation of this verdict is that “fear” of a book or a film provoking violence can hardly become a compelling reason to proscribe it; onus of getting provoked–reacting to it by resorting to violence–rests on perpetrator of that offence, not on the person whose book, cartoon or film could inspire the protester to do so. That being so, the White House can only ‘request’ Google to take the film depicting Prophet Muhammad (PBUH) off the YouTube. If those manning Pakistan’s foreign service didn’t know this reality, they ought to be in some other profession, not foreign service. This is equally true of the foreign service of most Muslim countries. Since 2006, after the publication of the sacrilegious cartoons in a magazine in Denmark, there was enough time to push both the US and Europe to mend their ways in this context but nothing was done either by the OIC, the UN or a “US favourite” Muslim state. Periodically, the Muslim world burns itself in anguish over this failure.
As long as “free expression” serves the interests of the West, it continues to enjoy protection; it becomes punishable only if it exposes the crimes of a government. Punishing freedom of expression is a tool to be used only for strategic purposes; had that not been the case, the likes of Julian Assange would be free, not hiding in a foreign mission. The Western strategy that it wants to be pursued by “free expressionists” is found in books like “The clash of civilizations.” The apathy towards setting limits on ‘freedom of expression’ creates many doubts. One view is that it has more to do with the belief that, in its present divided and dependent state, the Muslim world can’t hurt Western interests. Besides, such acts also serve the purpose of further dividing the Muslim world, because the steps that regimes in the Muslim countries take to protect Western embassies and interests against protests portray these regimes as Western protégées–the image that the PPP regime ended up with yet again on September 21. Nothing could be more stupid than the way the ‘Ishq-eRasool’ day was planned and observed. For a start, what the Foreign Office did–lodge an official protest with the US government –should have been lodged as soon as Pakistan’s government found out about the film. This could have given the regime a bit of credibility. Next, it should have consulted the religious parties–the volatile group–in planning country-wide protest rallies to ensure that no one resorted to violence. Declaring Ishq-e-Rasool day a holiday implied that there would be massive rallies. To assure that none of them went berserk, rallies from each electoral constituency should have been led by a parliamentarian–the route to ensuring peace and gaining popularity. To everyone’s surprise, not one politician, neither from the coalition parties nor the opposition parties, led the rallies. The top brass of religious parties too was absent from the scene. It implied handing over the cities to anger-ridden lots, vandals, thieves and dacoits. Nothing could have been more disgraceful on a day that manifested love for Prophet Muhammad (PBUH). Instead, it was the abject denial of the humane teachings and traditions of the Prophet (PBUH); we saw a refusal to act within limits of civilized conduct–hurting and killing the innocent, burning peoples’ assets, worse still, robbing people of their legitimate assets by ransacking their shops, and offices, as well as banks, while scores of helpless law enforcers could do nothing. The US and the West may rightly be accused of permitting a wholly unethical use of freedom of expression, but didn’t we exhibit another shameful dimension of it–express anger in an animalistic manner? The more worrying part of that scenario is that, it is now undeniable that, courtesy rising poverty and lawlessness, the number of those ready to turn any rally into a violent mob is enormous, and Pakistan’s law enforcers are incapable of confronting their might. But to blame the over-worked, under-equipped, and wholly insufficient police force would be a travesty; this lot is miserable and uncared for. www.valuechainmagazine.com 27
Freedom of expression Pakistan-style
On September 21, the world witnessed a state-sponsored day dedicated to showing love for Prophet Muhammad (PBUH). Sadly, it was a manifest denial of the humane teachings and traditions of the Prophet (PBUH)–a blunt refusal to confine conduct within limits of decency– stealing peoples’ legitimate assets by breaking open their shops, banks and offices, worse still hurting and killing the innocent. The regime’s sole concern was protecting only two localities in the whole of Pakistan–Islamabad’s diplomatic enclave and the ‘Red Zone that houses the President and Prime Minister’ residences and the parliament. But, even these localities had, ultimately to be protected by the Army after the police force failed to do so–an outcome that shook the confidence of the diplomats as well as the common Pakistanis. The West may be blamed for inciting trouble, but the way we use freedom of expression is worse; we did precisely what reckless liberal “free expressionists” in the West want us to do–prove once again that we respond to provocations by hurting ourselves materially as well as in terms of our reputation. Three cheers for the regime that ensured this outcome! By day-end, death toll was 25 including 4 policemen, and as reported by various newspapers, the number of injured could range from 160 to 200. The losses from arson and looting suffered by business and industry are estimated to be billions of Rupees. The criminal acts committed that day proved that the protest was less over the sacrilegious film, far more over rising poverty and consequent lawlessnesshallmark of state governance of the last five years, that exposed government’s hypocrisy about its “Ishq-e-Rasool”. Ideally, if ‘Yom-e-Ishq-e-Rasool’ was the unanimous decision of Pakistan’s parliamentarians, they should have led the rallies from their constituencies to express national solidarity and to ensure that the demonstrations remained peaceful. The fact is that this mayhem was (even if unintentionally) encouraged by the political leaders. No politician, either of the coalition or the opposition parties, came out of his or her safe heaven. The country was virtually handed over to protesters who had saboteurs in their ranks. The unemployed, whose number keeps rising every day, are now steadily turning into criminals. The protesters therefore vastly out-numbered the law enforcers who again displayed their incapacities. This was the most horrifying reality of this affair. The failure of a grossly inadequate, over-worked and under-equipped police force foretells country-wide anarchy – the epitome of irresponsible governance. As it is, extortionists (with political affiliations) have eroded the sentiment for investment but the fact that banks, virtually facing Sindh Chief Minister’s highly guarded residence could be looted and burnt, has shattered the investor confidence. A shocking revelation was that those looting the banks in the PIDC building, told an SHO to get lost otherwise he would be burnt alive; the SHO did just that. This chaos foretells the coming tragedy–a deadly revolutionthat, like the revolutions, will undo every system of the State. 28 www.valuechainmagazine.com
The other side of the picture
Pakistan’s youth presented just the opposite picture of what the world saw on September 21, when the protesters turned violent on ‘Youm-e-Ishq-e-Rasool’ and damaged virtually everthing that came in their way. On Sunday, September 23, large numbers of school and college going boys and girls equipped with brooms, paintbrushes, hammers and garbage bags, were on the streets in Karachi, Lahore, Rawalpindi Islamabad, and the other big cities, to clear up the rubble left behind by the protesters so that roads and streets were fit for transport and travelling t resume normal work routines. Besides cleaning the streets, they presented flowers and juice packs to the policemen they met on their way. Policemen on duty joined the boys and girls in their initiative. They said the youth boosted their moral, which went down due to killings and destruction caused by the violent mobs. These boys and girls also observed a moment of silence for all those who lost their lives in the shocking protest on September 21. The aim of the ‘Project clean up for peace’, they said, was to prove that “whatever happened on Friday was not the right way to protest. Killing policemen, breaking their hands and legs, and destroying public and private properties does not convey the right message to the global community,” Farhan of Islamabad read hundreds of messages on the ‘Face book, and decided to call all his friends for the ‘Project clean up for peace’. In just two days he succeeded in mustering the support of over 5,000 to join this project. “I only know five percent of people here. All others are new faces who joined the call voluntarily,” said Farhan. In similar ways, students in other cities got together for this project. These young boys and girls proved that the majority of youth in Pakistan doesn’t believe in violence as the mode of protest though they condemned the way the ‘freedom of expression’ was exercised by those who produced that sacrilegious film, which caused uproar in the Muslim world. “The West needs to note the clear difference between ‘freedom of expression’ and hate crime,” was the message they gave to the West. In their commendable efforts, the young boys and girls were joined by celebrities like one-time great TV anchor, Qatrina Hussain, who said that she is working on options for filing a petition in the International Criminal Court against the film that caused the trouble. Whether she succeeds in doing so is not important; what counts is the sensibility of her approach to contesting an issue that the US and Europe don’t notice.
POLITICS
Strategic ally alias “sacrificial goat”
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n the sidelines of the World Economic Forum’s annual get together, this year in Tianjin, China, our Prime Minister Raja Pervaiz Ashraf again sought Chinese companies to invest in Pakistan. Chinese Premier Wen Jiabao once again assured his Pakistani counterpart that the Chinese companies will do so. The fact is that, despite their reservations over security issues Chinese companies have been investing in Pakistan, but not as much as in the past. Pakistan’s escalating security risk is rapidly eroding investor confidence, and President Zardari has admitted that sectarian killings could “undo Pakistan”, but little is being done in this regard, to begin with, by substantially increasing the number of law enforcers or adding to their detective, preventive, and protective gadgetries. If anything, more of this inadequate lot is being assigned to protecting the ‘peoples’ leaders’ from the people. Even MNAs and MPAs now need protection. What no one asks is “why are they afraid of the electorate that has elected them?” Besides, no one talks credibly about the elements and factors fuelling lawlessness, crime, and of course terrorism, to reach levels that political leaders now consider a threat to the very existence of the country. All we hear are biased, irresponsible and unsubstantiated allegations and explanations thereof, but in a TV talk show in early September, head of the Pakistan Tehrik-e-Insaf very mutely referred to external forces that are ensuring via terrorism that Pakistan does not benefit from its huge reserves of natural resource buried below the ground in Baluchistan and the tribal areas of the Khyber Pukhtunkhaw province. Disclosure about connections between US and British secret services and Baluchistan Liberation Army eventually forced even the Interior Minister Rehman Malik to publicly blame these connections. Oddly, it took him too long to realize that this intervention was going on because unrest in Baluchistan and tribal areas of the Khyber Pukhtunkhaw province is the best way of frustrating every Pakistani to the point where he loses faith in everything, above all, in Pakistan and Pakistani nationhood–the recipe for dismembering Pakistan that dared to become a nuclear power in spite of being told to desist from this venture that is the exclusive domain of the West. Pakistan remained a US ally ever since its first Prime Minister Liquat Ali Khan paid a visit to the US in 1950. It remained a member of SEATO and CENTO until these alliances were packed up. But during the 1965 Indo-Pak war, the US didn’t come to its rescue. In the 1971 Indo-Pak war, US Navy’s 7th fleet watched silently from the bay of Bengal the break-up of Pakistan. Despite the disastrous outcome of that war and the subsequent nuclear test by India in 1974, the US thought it appropriate to impose tough economic sanctions on Pakistan after Pakistan decided to go nuclear.
by A.B. Shahid
But when the US opted to intervene in the Afghan civil war “to give the Soviet Union its Vietnam”, Pakistan was tactfully exploited by the US. The dictator Gen. Zia had many challenges to contend with. Although political observers still believe that the forced exit of the then Prime Minister Z.A. Bhutto from power had US backing, on the surface there was visible rejection of the Zia regime. This rejection forced Gen. Zia to agree to Pakistan’s becoming the US proxy in Afghanistan. In return, his regime was ‘legitimized’. This Pakistandestructive compromise only proves that before beginning its ‘war on terror’ the US again used its ‘strategic’ ally Pakistan but the relationship became worse again after Pakistan tested its nuclear device in 1997. But soon thereafter, once operation 9/11 was launched, the US again used Pakistan, though this time it was via naked threats of extinction. In a TV interview, the former Pakistani President Gen. Musharuff admitted that Richard Armitage had told the then ISI chief that if Pakistan did not allow the US forces to use Pakistan’s sea ports and air bases to launch an attack on Afghanistan, Pakistan could be bombed “back into the stone age.” The US (Pakistan’s strategic ally) knew then as well as today, how exploration and recovery of Pakistan’s natural resources could transform Pakistan’s current status from a beggar state to a self-sufficient, in fact a donor state–an outcome that the the US can assist in materializing. But what the US prefers is to delay even the reimbursement of expenses Pakistan incurs on behalf of the US in assisting its ‘war on terror’– amounts that are pennies compared to Pakistan’s huge war losses that began suffering since 1980. Even today, Pakistan is fighting the US ‘war on terror’, and is paying the price for it as do the Afghans, Iraqis, Libyans, and Syrians. This war, that is destroying their countries, has now convinced more of their people that the real aim of the ‘war on terror’ is to destroy resource-rich Muslim states. None of these recent anti-US converts supports terrorism that turns human beings into monsters who slaughter the innocent in the name of Islam–faith wherein no sin is bigger than killing the innocent, no matter what their faith. But then they also see that the so-called defenders of human rights, peace and equality (who launched the ‘war on terror’) keep committing this mega sin everyday with impunity. What makes their sin worse is the fact that they call this slaughter mere ‘collateral damage’ reflecting their ruthless mindset. Today, Pakistan’s big problem is the combination of energy and power shortages that together are causing its trade deficit to balloon rapidly and thus forcing it to borrow at the cost of weakening the Rupee. Pakistan’s oil import bill is killing its economy. While rising oil price is partly to be blamed for this distortion, the undeniable fact is that if, in www.valuechainmagazine.com 29
1980 , instead of becoming a proxy for America’s intervention in Afghanistan, Pakistan had concentrated on exploring its natural resources, even without external help, it could have recovered them at least to the extent of making Pakistan self-sufficient. But that was not to be the case because of its erstwhile leadership. Now Pakistan confronts its worst financial crisis; the one key factor responsible for this state of affairs is its internal and external security outlook, besides ‘bad governance’. In July 2012, Moody's Investors Service had downgraded its foreign and local-currency credit ratings from B3 to Caa1, while its short-term rating remained unchanged at ‘notprime’ and its outlook ‘negative’. Courtesy its ratings downgrade, Pakistan’s Country Risk perception suffered yet another blow. Moody’s report made references to the escalating security risk without pointing to the elements and factors escalating it. But what is no longer deniable is the connection between US and British secret services and the Baluchistan Liberation Army. That this connection is not new but dates back to the 1980s is no longer deniable. The rise of the “neocons” in both US and Britain and their progressive strengthening until George W. Bush and Tony Blair took control is a reality admitted by most observers around the world. Recently, the Nobel peace prize winner and hero of South Africa’s anti-apartheid movement, Archbishop Desmond Tutu, pulled out of a seminar (which Tony Blair was scheduled to attend) because he could not sit with a man who had committed ‘heinous war crimes’. The Archbishop called for Tony Blair and George W. Bush to be brought before the International Criminal Court since they initiated and perpetuated their “war on terror” that has only “hardened the hearts and minds of the members of the human family across the world”. He went on to ask “Has the potential for terrorist attacks decreased? To what extent have we succeeded in bringing the so-called ‘Muslim’ and ‘Judeo- Christian’ worlds any closer together in sowing the seeds of understanding and hope?” The clever-by-half strategists sitting in the Pentagon do not see how their tactless actions are fuelling terrorism although now they rely on un-manned flying killers–drones–that are launched from the US. This is what the former US President Jimmy Carter warned about when he wrote that “instead of making the world safer, America’s violation of international human rights abets our enemies and alienates our friends.” But the likes of Carter were sidelined. Archbishop Desmond Tutu describes this scenario as the setup in which ‘leadership and morality are indivisible’–a vivid description of what now prevails in most ‘US strategic ally’ countries in the better part of the Muslim world. The US knows it better than anyone else in the world what natural reserves are buried beneath the ground in Baluchistan and KP’s tribal areas, because its satellites keep orbiting this planet–gross violation of nations’ privacy that the UN is, as yet, not prepared to fault and forbid. Policymakers in the US don’t realize that, given their treatment of their allies since 1952, no patriotic regime anywhere in the world would want being labelled a US ally; any regime that opts for this label is rated as “suspect” because the US has made “alliance” sound like a danger signal. But the US Senators never lose a chance to ask for Pakistan being crushed under more sanctions; they don’t support any moves that could stop Pakistan’s slide into the category of “failed states”. Some show of concern for a ‘strategic ally’, isn’t it? 30 www.valuechainmagazine.com
Of the ‘great’ Dr. Shakeel Afridi
Dr Shakeel Afridi has made a name for himself in the questionable OBL affair; a saga that has continued to baffle political observers everywhere wherein Dr Afridi played the key role. In a way, that was an achievement though of a very regrettable type–a fact Dr Afridi denies. In early September, a US-based columnist of a Karachibased English language news paper contributed an amazing column in which he quoted Fox News TV service as the source. The story was based on the transcript of an interview that Dr Afridi gave to a reporter of the Fox News while in prison in Peshawar. The oddity was that, instead of being a visual presentation, the anchor read out a transcript; this suggested that the interview was unauthorised, and was conducted with the help of insiders sympathetic to both the US and the Fox News. But that is not surprising; US agents are in abundance in Pakistan– the Raymond Davis types. The interesting part of that transcript was the enormous love, affection, loyalty, and yearning that, reportedly, Dr Afridi has for the US, and how he regrets the lunacy of the Pakistanis who no longer hold a good view about the ‘friendliness, compassion, consideration, and concern’ that the US has for Pakistan. According to the reported transcript, Dr Afridi said, “I tried to argue [with the ISI] that America was Pakistan’s biggest supporter – billions and billions of Dollars in aid, social and military assistance – but all that they [ISI personnel] said was, they [i.e. Americans] are our worst enemies; you helped our enemies.” Then he went on to express his supposedly expert view about terrorism, not medical science, saying “it is now indisputable that militancy in Pakistan is supported by the ISI ... Pakistan’s fight against militancy is bogus ....... it is just to extract money from America.” That wasn’t all; he then revealed some more facts (that exposed his covert contacts). “I was told by others [unspecified] that ISI advises the militants to make things up to tell CIA interrogators, pretend this and that,” also, that the Arab detainees [accused of terrorism] were given “first-class treatment and first-class food”, while radicalised Westerners were singled out for abuse.” And, that Dr Afridi has “a lot of respect and love for your people [i.e. the Americans]” and he was “proud to work with CIA.” About his miseries, he disclosed something pretty intriguing saying “My situation is very grim. I earned millions of Rupees a year and supported my family.” According to Fox News, in just over a year since his arrest Dr Afridi had lost $160,000 in income, legal fees and living costs. Dr Afridi also says that “my bank account was looted [by the ISI while he was being held] making me bankrupt”–a claim the ISI denies. Another intriguing development is that the US diplomatic circles have floated the idea that Dr Aafiya Siddiqui could be handed back to Pakistan in exchange for Dr Afridi, and in early September Dr Aafiya Siddiqui’s American lawyer visited her relatives in Karachi advising them to push for this exchange. Dr Afridi is indeed an important US asset (accidentally born in Pakistan).
ECONOMY
Signs of improvement in INDO-PAK Relationship
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peaking at the end of the annual gathering of the head of Asia-Pacific Economic Cooperation in the Russian port city of Vladivostok on September 9, US Secretary of State Hillary Clinton warned that increasingly tense territorial rows in the Asia-Pacific threaten the global economy. The gathering was meant to build goodwill in long-term efforts to tear down trade barriers within their bloc, which accounts for more than half of the world’s economic output. What Clinton said there is also relevant to the India-Pakistan relations in South Asia. Relations between India and Pakistan have been strained and bitter over territorial and other issues ever since they emerged on the world map as independent sovereign nations. The continued deficit in mutual trust and growing intensity of the curt and terse relationship plunged the two countries into four wars, besides regular border skirmishes, which pushed them backward economically; Pakistan even lost its Eastern wing in the process. Seen in this context, the recent efforts aimed at bringing about a rapprochement in the relations between the two nucleararmed rivals of the region through the process of dialogue are most welcome moves. The process for reconciliation and normalization of relationship between India and Pakistan started two years back. Since then, considerable headway has been made on various issues,
Value Chain report
notably in the areas of trade and investment. The latest in the series of measures taken for promotion and liberalization of trade is signing of three agreements at the end of the seventh round of commerce secretary level talks. The agreements included redressal of trade grievances and cooperation and mutual assistance in custom matters. Terming the signing of the agreements as “a positive step” both sides expressed the hope that this would substantially facilitate trade not only between the two countries, but prove beneficial for all South Asian countries. Earlier, a major breakthrough towards trade promotion in the region was made with the reduction in Pakistan’s list of negative items and Indian government’s announcement allowing Pakistani businessmen to invest in India in various sectors of the eco- nomy. But a landmark achievement towards improvement of relations between the two old foes, linked by ties of geography, history, culture and several other shared values, was made when a 3-day visit of the Indian External Affairs Minister S M Krishna in early September ended with reaffirmation, by both India and Pakistan, in unequivocal and unambiguous tone, of the importance of carrying forward the dialogue process with a view to resolving all outstanding issues through constructive and resultoriented engagements, to establish friendly, cooperative and good neighbourly relations between the two countries, and www.valuechainmagazine.com 31
move forward to write a new chapter of peace and cooperation by ignoring the bitter past. “We are aware that there is a long way to go and the path will not be easy but we are committed to moving forward to writing a new chapter of peace and cooperation in our relations”, remarked the Indian Foreign Minister at the joint news conference along with his Pakistani counterpart Hina Rabbani Khar. The need and importance of good neighbourly relations can hardly be over-emphasised for sustenance, survival and growth. It is heartening to note that there is growing realisation between both India and Pakistan to shun differences and move forward, building on convergences rather than brooding over divergences. Pakistan’s position on the subject was amply demonstrated by Foreign Minister Hina Rabbani Khar when she told media that Pakistan was committed to realizing the immense potential offered by normalization of relations, and believed that the two countries should build on convergences as part of their broader vision regarding foreign policy engagements. She emphasized Pakistan’s intent to move forward instead of being held hostage to history. “Pakistan”, she said, “has made sure that as we move forward, we build on the convergences. We will not brood over divergences. We will move relations forward in a positive direction. What has happened till now is history, and, we will not be held hostage to it. We will humbly, but firmly, build on the convergences.” During the 3-day visit of the Indian Foreign Minister, discussions were held on a wide range of issues that inhibited good neighbourly relations between the two countries. A welcome aspect of the discussions was the dominance of an element of positivity in resolving the issues notably terrorism, drug trafficking, humanitarian issues, commercial and economic cooperation, Wullar Barrage/Tulbul Navigation Project, Indus Waters Treaty, Jammu and Kashmir, Siachin and Sir Creek, and promotion of friendly relations etc. The reconciliatory approach both sides have converged on is on dealing with the more easily doable: first, create the necessary mutual confidence and then move to attend to the more difficult issues including the long outstanding issue of Jammu and Kashmir. This is the kind of approach that has produced positive results elsewhere in the world, especially in the context of US-China and India-China relationships. The European countries remained at loggerhead for centuries but now, courtesy the European Union, all countries sit together to solve their problems. India and Pakistan could also evolve similar strategy to sit together and solve their problems. Jammu and Kashmir has been the bone of contention between India and Pakistan and needs to be resolved—the sooner the better. During the 3-day visit, both sides held deliberations on the issue and agreed to the need for continued discussions in a purposeful and forward looking manner, with a view to finding a peaceful solution by narrowing divergences and building convergences. With determination and political will, the two countries can address the issues of divergences, including Jammu & Kashmir, Siachin and Sir Creek. The ongoing spate of terrorism poses a serious threat to peace and security, and has been one of the several issues marring the relationship between India and Pakistan. There is, therefore, need of a strong commitment to fighting this menace. It is encouraging to note that during the meeting, the two sides reiterated and reaffirmed their resolve to cooperate with each other in the struggle against terrorism. “We have agreed that 32 www.valuechainmagazine.com
terrorism poses a threat to peace and security and reaffirm strong commitment to fighting terrorism in an effective manner”, S. M. Krishna told the newsmen. Of no less significance is the consensus between the two sides to remove the concerns about the Mumbai attacks. As the Indian foreign minister told the newsmen, “Pakistan reiterated its commitment to bring all perpetrators of Mumbai attack to justice.” A significant achievement towards normalization of relations between the two countries was signing of the new pact on a relatively liberalized visa regime replacing a 38-year old restrictive visa regime of 1974. The new pact offers eight types of visas easing the restrictions on visitors from both countries, and ensuring time-bound visa approvals, multiple entry visas, exemption from police reporting in some cases, free visas for businessmen, group, tourist and pilgrim visas as well as visas on arrival for the senior citizens. The senior citizens over 65 years of age would now be able to walk across the border between the two countries instead of going through the hassle of getting visas from embassies in New Delhi or Islamabad. The senior citizens, children below the age of 12 years and eminent businessmen will stand exempted from police reporting. These are regarded as welcome moves for bringing the businessmen and common people of the two countries closer to each other. Free and frank interaction between the businessmen, tourists and the common Pakistani and Indian citizens is the key to the development of a relationship of mutual understanding, lasting friendship and durable peace. Among others, the one issue that warrants immediacy is the improvement of economic cooperation between Pakistan and India. As Foreign Minister Hina Rabbani Khar has said, “Pakistan has already changed the position it held for 40 years for normalization of trade relations with India, and is willing to move ahead without sticking to the past position.” The new visa pact, it is hoped, will help diffuse tension, bring the two economies closer to each other, and bolster trade and commerce which will be the key driver of a sustained rapprochement and reconciliation. The new visa pact provides for one-year visa for businessmen. While welcoming this decision, Pakistan’s business community has suggested 10-year multiple visas to facilitate frequent interaction between the businessmen of the two countries. This suggestion needs consideration as this may ultimately lead to the promotion of bilateral trade.
ECONOMY
Informal economy and its effects
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akistan’s informal economy is believed to have grown to more than half the formal economy which yields a GDP of $ 200 billion. However, official estimates in this respect are quite conservative as one former chairman of FBR, when he was in office, said that ‘I believe this economy is 30% to 40% of our total economy and this is quite disturbing. There is a substantial part of the informal economy which is not in the mainstream economy and need to be documented if at all new resources are to be mobilized for welfare purposes.’ One report says that this economy has reached such a proportion that it is upsetting public welfare plans. The report puts its size at $83 billion which is more than 40% of the total GDP. According to an assessment the informal economy has expanded at the rate of 9% a year from 1977 to 2000. It was estimated by an independent study that in 2005 this economy was from 54.6% to 62.8% of GDP. But now there is also a belief that the country’s parallel economy has already touched $ 100 billion. The main reason for this rapid growth is that Pakistan’s economy is largely undocumented providing space to informal sector to grow and thrive. Similarly, the under-invoicing has gone on for years and at huge scale. The obvious lack of will to effectively tax the rich including the large feudal community will further expand the country’s informal economy. The informal sector is that part of the economy which does not pay tax, bribes taxman and does not declare his income. According to a view it is said that informal economy is different from black economy or underground economy – the terms which are used in negative connotation. The informal sector cannot be equated with black economy which is mostly illegal and crime related. Since most of the informal enterprises are now pursuing legitimate economic activities they need to be classified as “extra-legal” and “not illegal’. The solution therefore lies in neither encouraging nor suppressing informal economic activity but rather in facilitating the transition of informal businesses to the formal sector by removing barriers. However, the Sustainable Development Institute in collaboration with the United Nations Office on crime and drugs released a report in February this year which outlined the contours of illegal economy. The study says that an illegal economy is essentially a subset of the informal economy and covers all impacts on the overall economy emanating from illegal activities. A study conducted by the Lahore University of Management Sciences (LUMS) in 2003 showed that out of Rs 100 taxes the government receives only Rs 38 and Rs 62 pocketed by taxpayer, tax collector and tax practitioner. It was also estimated that tax evasion in 2005 was from 5.7% to 6.5% of GDP. Various governments have tried time and again to document the economy but did not succeed due to the resistance of vested interests and the lobbies representing these segments of the economy. Only recently hoarders and speculators of staple food commodities like rice, wheat and sugar were
by Rauf Nizamani
INFORMAL
E
FORMAL
C O N O M Y able to make a killing by their covert activities with the active connivance of government officials. According to a news paper report the mill- owners and traders made the profit of about Rs 86 billion from the sugar crisis some time ago. Among the reasons which encourage the informal sector the important are high corporate tax rates and enormous cost of doing business legally. This may be seen from the fact that it takes 89 days to register a business in India, compared with 8 days in Singapore. Similarly, it takes 33 days to register a property in the Philippines compared with 12 days in USA. It takes five and half years to close an insolvent business in Vietnam. All in all emerging market businesses face administrative costs three times as high as their counterparts in the developed countries. According to some recent research reports, the size of Pakistan’s informal economy is taken at $ 100 billion and if the same is taxed, say at ten percent only, it could provide revenue of $ 10 billion to the exchequer. This practice is favored in some countries with a view to achieve a higher revenue tax target. This is because the people in general prefer lower tax rates and business friendly laws for it is the burden of too many and cumbersome laws that drives some businesses into the informal economy. The reasons why informal economies grow and keep growing, therefore, are not hard to uncover. Another reason for reluctance to pay taxes especially in Pakistan, is that some of the businesses find government unable to help them when they confront armed groups who indulge in extortion, kidnappings and land grabbing. It happens frequently, mostly in Karachi, but this menace is also engulfing other parts of the country. The result is that the informal www.valuechainmagazine.com 33
sector has grown more rapidly than the formal economy over the last three decades in the country. The informal economy is not just the unregistered street vendors and tiny businesses that form the back-bone of market places in Asia and other emerging markets. It also includes many established companies, often employing hundreds of people in industries as diverse as retail, construction, consumer electronics, software, pharmaceuticals and even steel production. In India, Pakistan, Indonesia and Philippines as much as 70% of the non-agricultural workforce is employed in informal businesses. According to Pakistan Economic Survey 2011-12, the informal economy plays an important and sometimes controversial role in the country. It provides jobs and reduces unemployment but in many cases jobs are low paid. At present this economy employs 73.8% of the total labor force and hence is the largest employer in the country. The employment ratio in rural informal sector (76.5%) is higher compared to that in the urban areas (71.2%). According to the Labor Force Survey 2008-09, the male employment rate in the rural informal sector stood at 76.2% and stood constant in 2010-11. However, in the urban informal sector, employment has increased from 70.6% to 72.4% during this period. The overall percentage of persons working in the informal sector shows an increase in both the rural and urban areas. However, the formal economy did not show any significant changes with respect to employment level during the 2008-11 periods. The level dropped slightly from 26.7% to 26.2% but in the urban areas there was a significant reduction from 29.4% to 28.8%during the same period. According to International Labor Organization (ILO), Pakistan’s informal economy is quite large and has provided higher level of employment compared to previous years. The key sectors of jobs are wholesale and retail trade, manufacturing, community / social and personal services, construction and transport. The government did plan to improve working conditions mostly in small enterprises and also gave benefits to home-based domestic workers, such as improved safety, health arrangements and payment of minimum wages etc. But not much has been done to implement the plans so far. The ILO has taken notice of the fact that incidence of child labor is much prevalent in informal economy. Pakistan’s only child labor survey of 1996 had revealed that 3.3 million children under the age of 14 years were working in the country. The government had promised to address this human issue but it is the widespread poverty that compels parents to send their children to do work. Some experts are of the view that globalization has shrunk the size of large scale industrial sector and increased the share of informal workers in Pakistan, putting additional pressure on women to supplement household income. They say that in the last two years it has grown by 28%. They call this expansion of informal work the ‘reverse cascade effect’ which hits those right at the bottom. They say that Pakistan’s economy began spiraling into a decline by the end of 2005. Since then it has been struggling to limp out of the recession owing among others, to high defense spending amid unrelenting militant attacks. German sociologist professor Jan Berman in one of his lectures delivered in Karachi recently opined that the conditions of the laborers in the informal sector in Pakistan and other South Asian countries are worst and no social security is being provided to them. In Pakistan, the laboring class has been totally powerless and invisible. These people work and toil very hard but in spite of this they have always remained poor because they were not considered or acknowledged by the state, government, politicians or political parties and were never on their political agenda. 34 www.valuechainmagazine.com
The black economy of course is a global phenomenon. The Economist estimated that in 1998 the world’s black economy accounted for a massive $ 9 trillion worth of output- a volume of output almost equivalent to that of USA. Later, a study by Friedrich Schneider, an Austrian economist, who attempted to measure the size of black economy in 76 developed and emerging economies, revealed that underground activity is equivalent to 15% of the officially reported GDP, on average, in rich economies and about one third of GDP in emerging economies. While most of the underground economy elsewhere in the world revolves around the criminal or illegal activities the major contributors to the black economy in India are legal businesses and government. According to the Indian Council for Research on International Economic Relations legal businesses controlled by the government, government expenditure and taxes have always been a major source of black-money creation. Similarly, America’s fast growing black economy is believed to be worth $ 970 billion or nearly 9% of the real economy. It could soon surpass $ 1 trillion. What is fuelling this economy is the country’s growing rank of low-wage, illegal immigrants. The government puts this population at 8.5 million but a study puts it at 20 million. In the OECD countries in 1999-2001, Greece and Italy had the largest black economies at 30% and 27% of the GDP respectively. In the middle group were the Scandinavian countries and at lower end were the USA and Austria at 10% of GDP and Switzerland at 9%. Though it remains to determine the scale of illegal economy in Pakistan, estimates suggest that the size of the black economy was somewhere around $ 34 billion in 2011. Most policy makers implicitly assume that informal economy does no harm. But this assumption is not true as the Research by Mckinsey Global Institute has found that informal economies are not only growing larger but are also undermining enterprise level productivity and hindering economic development. Thus the rise in the underground economy creates problems for policy makers to formulate economic policies especially the monetary and fiscal policies. The cost imposed by the informal economy are not limited to hundreds of millions of dollars in forgone tax receipts; more damaging is its pernicious effect on economic growth and productivity. The unearned cost advantage, informal businesses enjoy from ignoring taxes and regulatory obligations, allows them to undercut prices of more productive competitors and stay in business, despite very low productivity. Informal software companies in India appropriate innovations and copyrights without paying for them, reducing the industry’s productivity and profitability by up to 90%. Informal apparel makers in India gain a 25% cost advantage over their law abiding competitors by not paying taxes. Some experts recently raised the question whether the informal economy is allowed to prosper in the long-term in the developing world, or should it be curbed as a hindrance to development. Informal business accounts for 35-50% of GDP in many developing countries and more in some cases. The fact remains that the sector contains both entrepreneurial spirit and struggle for subsistence. From one perspective, informal businesses have an unfair advantage in avoiding taxation. On the other hand, these businesses lack legal rights, and are unable to access public services or formal sources of credit. So what should be an appropriate policy response remains to be answered.
ECONOMY
Extending Afghans stay to cost Pakistan
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fter the display of a bold resolve by the Government of Pakistan and the provincial authorities of the Khyber Pakhtunkhwa (KP) not to allow 1.7 million registered Afghan Refugees to live in Pakistan beyond December 31, 2012, the government seems to have changed mind yet again as reportedly it is considering extending their stay in Pakistan beyond the stipulated date, agreed upon by all the parties including the United Nations High Commissioner on Refugees (UNHCR). Some reports suggest that the proposed extension may be for three years or even beyond. The government has already given them several extensions for stay in Pakistan, on the request of the refugees’ leaders, the Afghan government and international organizations like the United Nations. Further extension would be simply untenable, irrational and one that would be jeopardising the national interests of Pakistan. The country is already facing economic problems, security issues, energy shortage, water and food crises besides volatile law and order situation. Prolonged stay of the Afghan refugees in Pakistan, on the grounds of unfavorable or unsatisfactory law and order situation in Afghanistan, may only add to Pakistan’s woes and worries. The large number of Afghan refugees living in Pakistan has no parallel in recent history of displaced communities living elsewhere in the World. They have been living in Pakistan since long. Their reluctance to go back simply points to one possibility- their intention is to be naturalized as Pakistani citizens. It was perhaps in this context that the Peshawar High Court took suo moto notice and directed the federal and provincial authorities to ensure the exit of the Afghan refugees by the cutoff date because, as the honorable judges very rightly observed, when 84 percent of the Afghans had been living in their country with safety why not these 1.7 million could be repatriated and accommodated there. Interestingly, the KP has recently issued notification directing the Afghan refugees to repatriate before the deadline. The Home and Tribal Affairs Department of the KP, where the number of the Afghan refugees is the largest, has also asked the Afghan nationals possessing Proof of Registration Cards (PoRs) to wind up all their activities, including businesses and start preparations for return to Afghanistan by the stipulated date. Thus in case the federal government decides to allow the Afghan refugees’ continued stay in Pakistan it would not only be going against the orders of the Peshawar High Court but would also be defying the orders of its own federating unit, Pakistan has already suffered immensely in terms of adverse economic impact of the continued stay of a large number of the Afghan refugees, besides substantial increase in law and order problems and socio-cultural implications. The economic domination of the Afghan refugees, markedly observed in businesses, trade and services, especiall in KP, Balochistan and FATA, has been quite significant and pervasive, largely because of these sectors there being unregulated and undocumented. This, in turn, has resulted in multiple social, security and political malaise.
by Naila Aman Khan
The key component in how such a large number of Afghan refugees have been able to live in Pakistan for such a long period of time has been Pakistan’s policy of accommodation which has its roots in the policy of locating Strategic Depth in Afghanistan. Pakistan needed a huge number of Afghans who could cultivate strong pro-Pakistani feelings among the traditionally anti-Pakistan Afghans. However, instead of getting the Strategic Depth in Afghanistan, the policy has cost Pakistan in the shape of the state’s ever- evaporating writ on the borders joining the two countries. The Talibans have largely been manned and supported by Afghan refugees. From these areas in the north Pakistani Talibans have been unleashing waves of terror on mainland Pakistan particularly cities again with the support of Afghans inhabiting the refugee camps in these cities. In this context allowing Afghan refugees to continue living in Pakistan is also unviable and against our national interest. It has almost been a decade that Afghanistan is having a world recognized and popularly-elected government working under the Afghan Constitution. On the other hand there have been significant strides towards reviving the Afghan National Army and Afghan National Security Forces. Today Afghanistan can boast of having around 150,000 professionally-trained security forces personnel. Afghans and their government traditionally have had deep anti-Pakistani sentiments, official Pakistan and Afghan rhetoric notwithstanding. Therefore, if the Afghan refugees and illegal Afghans would not be sent back to their home country and their refugee camps decommissioned both would continue to be used by Afghan authorities to create unrest inside Pakistan. Seen in the above scenario, But the stand of Afghan government that Pakistan should also extend the stay of Afghans on its soil for another three years is incomprehensible in the context of just mentioned situation. the insistence by the Afghan government for continued stay of the refugees in Pakistan seems politically-motivated rather than being humanitarian or security-related. The fact of the matter is that Afghan President Hamid Karzai owed his narrow win in the last presidential elections to the Afghans living in Pakistan. As these Pakistani based Afghans are mostly Pashtoons they were motivated by Karzai’s associates and, above all, the host country’s authorities to vote in favour of Karzai when there was neck-n-neck electoral contest with his Tajik rival Abdullah Abdullah. The Karzai camp hopes that in the next year Afghan elections its nominee would also fall back upon the Afghans living in Pakistan and Pakistani authorities to win elections. It is more than clear now that the issue of the Afghans living in Pakistan is a humanitarian or refugee question it has since long transformed into a security and economic issue and Pakistan no longer can afford to host legal and illegal Afghans on its soil. If still Islamabad decides otherwise it would be at the cost of serious threat to national, economic and social security of Pakistan particularly in the remotest and underdeveloped parts of the country as well as the violence-prone biggest city of Karachi. www.valuechainmagazine.com 35
ECONOMY
Sino-Japan strained relationship: Where the Asia is heading to?
W
ith tensions running high during the past few weeks over the group of islands in East China Sea, known as Senkaku in Japan and Diaoyu in China, relationships between China and Japan, Asia’s two biggest economies in the world, are fast deteriorating and posing a serious threat to peace and stability in the northeastern region and beyond. These islands, currently under the domination of Japan, are located approximately 120 nautical miles northeast of Taiwan, 200 nautical miles east of the Chinese mainland and 200 nautical miles southwest of the Japanese island of Okinawa. Sino-Japanese relationships have long been plagued by China’s bitter memories of Japan’s military offensive in 1930s. The current bitterness in their relationship is believed to be surrounded by energy rich waters. Many of the islands under Japanese occupation are uninhabited rocky grounds. But beneath them, analysts believe, potentially huge reserves of natural gas and oil exist. A Chinese estimate suggests as much as 213 billion barrels of oil lying untapped in the South China Sea alone which, if true, would make it the largest oil reserve outside Saudi Arabia. Japan's sovereignty over the islands has been disputed by China and Taiwan following the transfer of administration from the USA to Japan in 1971. The Chinese claim the discovery and control of the islands from the 14th century. Japan controlled the islands from 1895 until its surrender at the end of World War II. The United States administered them as part of the United States Civil Administration from 1945 until 1972, when the islands went back under Japanese control under the Okinawa Reversion Treaty between the United States and Japan. Despite the complexity of relations between China and Taiwan, both governments agree that the islands are part of Taiwan to which Japan does not officially recognize as a sovereign state. Japan regards the islands as a part of Ishigaki, Okinawa region and acknowledges claims to the islands, neither of China nor of Taiwan. Japan does not even accept the existence of any dispute over the islands, asserting that they are an integral part of Japan. The landing of two Japanese activists on an island at the centre of the dispute on September 18, marking the anniversary of Japanese occupation, provoked a quick response from China which described the event as provocative, lodged a complaint with Tokyo and said that it reserved the right to take further action. The event also sparked anti-Japan protests across Chinese cities Shenzhen, Shenyang, Hangzhou, Harbin and Qingdao. Protesters toppled Japanese-made cars, burned Japanese flags and forced Japanese retailers and factories to put their shutters down. Realizing the risk that they could get out of hand, major Japanese firms have suspended business there. 36 www.valuechainmagazine.com
Chinese Navy has conducted a live ammunition drill in the East China Sea. The drill employed the main forces of the East China Sea Fleet of the Chinese People’s Liberation Army, including dozens of warships, submarines and carried out 16 combat training programs. China's first aircraft carrier, Liaoning, was officially handed over to the navy on Sept 25. It is an important, but normal, step in China's construction of its navy. Japanese officials are observing this induction of aircraft carrier as a clear message to Japan, however China stated that the purpose of its aircraft carrier is to maintain regional stability and world peace. An economic war between China and Japan could have serious consequences on both countries (mainly on Japan), as Asia’s two largest economies are integrally tied together in trade and investment. Total trade between the two countries was $345 billion in last fiscal year. China is Japan’s biggest customer of expensive exports like heavy machinery and high tech gear and relies heavily on Japanese investment in capital and technology. Japan is a key export market for China, its third largest after the USA and EU. Damage from a Sino-Japan trade war would spread beyond the two countries. U.S., South Korean, Malaysia, German and Thai companies are in the middle of the China-Japan economic relationship. Japan is China’s second-biggest trading partner with 9% of China’s overall trade (more than the total trade China does with BRICS countries plus UK). China accounted for 21% of Japan’s exports and imports in 2011. The next closest was the US at 12%, South Korea at 6%. China received $6.3 billion in foreign direct investment from Japan in 2011, and has accumulated $69 billion in investments. Role of USA: Leon Panetta, the US defense secretary, during his recent visit to Japan, pointedly warned that "provocative behavior" by either side could lead to misjudgments, violence and, potentially, open warfare. During Panetta’s visit, US and Japan also agreed on the installation of Anti-Missile Shield to enhance the defense of Japan. USA announced that it will stay neutral in the island dispute; however, it will defend Japan because of defense treaties signed between the two nations. China’s economic managers are aware that allowing radical pressure groups to harm Japanese interests would send an unwelcome message to all foreign business and investors. This will raise the costs of doing business in China, and lead to capital flight that could seriously hurt Chinese economy. On this issue, China’s goals are clear and Beijing has taken effective measures so far.
ECONOMY
US Free Trade Agreement Case for Pakistan
P
reamble: Pakistan and the United States of America are strong trade and investment partners and whatever market access is available to Pakistani exporters is reflective of the importance that the US holds for Pakistani goods, especially textiles. However, for various economic, political, military, and social reasons, there has seldom been solid support for allowing liberal market access to Pakistan. So much so, that the much-touted initiative of Reconstruction Opportunity Zones (ROZ) succumbed to political exigencies as well as two major events in Pakistan. One was the imposition of Emergency by the then President Pervez Musharraf and the second was the tragic assassination of Benazir Bhutto. Over the last many years, officials from both the countries have continued their negotiations for a Bilateral Investment Treaty (BIT). Yet, BIT was seldom on the radar of Pakistani economic planners until some months ago, when the Chairman, Pakistan Board of Investment, Salim Mandviwalla, took the process forward on one of his official trips to Washington, and the ball has started rolling again. Notwithstanding the ignorance, and the lack of knowledge of BIT in many a business leader, the fact remains that successful negotiation of the Treaty and its immediate implementation by both the countries would pave the way for the negotiations on the Free Trade Agreement. Rationale: Pakistan has been rather lethargic in executing successful Free Trade Agreements with her various trading partners
by Majyd Aziz Former President KCCI
and, except for certain items or sectors, Pakistan has not been able to avail and utilize the benefits and advantages of FTA. Pakistan has signed FTAs with Sri Lanka, China, and Malaysia and, of course, for whatever be its worth, Pakistan is also a signatory to the South Asia Free Trade Agreement (SAFTA), as decided by SAARC countries. The Pakistan-Sri Lanka FTA was signed in June 2005. For the year 2005, Pakistan exports to Sri Lanka were $154 million and imports were $ 59 million. In 2011, exports rose to $350 million while imports were only $ 61 million. Although Pakistan’s exports to Sri Lanka (the first country that signed FTA with Pakistan) have seen an exponential growth, the main concern is that Pakistani exporters have not been able to seriously make their mark in Sri Lanka. The Pakistan-China FTA was inked in July 2007. For the year 2007, Pakistan’s exports were $613 million and imports (official) were $4,164 million while in 2011, exports rose to $1,680 million and imports (official) jumped to $6,500 million. The PakistanMalaysia FTA was signed in 2007 too. Pakistan’s exports to Malaysia in 2007 were $81 million and imports were $1,157 million while in 2011, exports went up to $243 million and imports increased to $2,728 million. At present, bilateral trade between Pakistan and United States is a matter of great concern. Pakistan’s exports to the US have generally ranged between $3,000 million and $4,300 million annually www.valuechainmagazine.com 37
since 2004 and, in fact, recently there has been a decline in total exports. Imports have been between $1,500 and $1,750 million except for the year 2007 when PIA procured the new Boeing aircraft. While the share of Washington in Pakistan’s total exports was 23% in 2004 and 22% in 2007, it decreased to only 15% in 2011. Pakistan’s share of total imports from the US is less than 0.20% while the share of textiles is between 3.3% and 3.5% of total US textile exports. It is, therefore, in the larger interest of the country, a nation that has been in the forefront in the Global War On Terror, a developing country that has spent in excess of $75 billion fighting the war, and a proud nation that has lost nearly 4,000 valiant soldiers and nearly 38,000 civilians in fighting terrorists and extremists, that the US must take the lead and provide Pakistan with a level playing field in market access, in import duties and incentives, and in ensuring that equality and non-discriminatory attitude is ensured for Pakistani goods, products, and services. Products: Textiles have been the main exports to US and its maximum concentration has been on promoting this sector. However, no significant increase has been registered in enhancing the export figures. This is a matter of deep consternation too, and is impacting expansion in bilateral trade with the US. Pakistani textile exporters are fighting a long-drawn battle with China, India, Bangladesh, and Sri Lanka to protect their share, but over the past several years, these four countries have encroached upon the territory. Each passing year would witness a growing pressure on Pakistan’s textile exports to the US since the African countries, utilizing the AGOA incentives, the South American countries, and even the West Indies nations would increase their market share in America. Therefore, it is incumbent upon Pakistani negotiators to ensure that, at least, the niche textile products do qualify, and are included in the items allowed under FTA. They are cautioned not to accept or rely upon the list of textile categories that were included under the ROZ initiative. Pakistan must adopt a two-pronged strategy in trade with the US. First, to maintain and gradually increase the share of textiles, and, secondly to concentrate on penetrating the US market with full backing and support for other sectors that are ripe for Pakistani products. It is heartening to note that Pakistani manufacturers of PET Resin have obtained a good share in the US and thus this product must become a component of the items under FTA. Recently, two mega pioneer plants have been set up in Karachi to produce BOPET that would not only save $40 million in import substitution, but would also have an export market in excess of $30 million. It is proposed that this pioneer industry should also be included in FTA. Pakistan is rich in minerals. There is a huge market for Barite, both in ore form as well as in powder form, for the oil-drilling industry. Pakistan has never exported this mineral to the US, but now some exporters are targeting this sector too. China is a regular exporter of this mineral and Pakistan can make inroads if there is an incentive in the form of zero duties and preferential treatment. Export of Pakistani mangoes made headlines, but the non-tariff trade barriers stymied all efforts of the fruit exporters and the government to establish footprints for the fruit in the US. The entry of mangoes in the American market would enable the acceptance of Pakistani fruits in the US, in raw form, in pulp form, and in canned or packaged form. This sector too needs the attention of the FTA negotiators. There are many other miscellaneous items that can be favourably exported to the US such as confectionary, gems and jewellery, 38 www.valuechainmagazine.com
U.S Trade in goods with Pakistan 2008 to 2012 Year Exports Imports Balance 2008 2009 2010 2011 2012 (Jan-july)
1897.8 1618.0 1901.4 1987.1 913.5
3591.1 3162.8 3508.9 3830.4 2112.2
-1693.2 -1544.9 -1607.4 -1843.2 -1198.6
All figures are in millions of U.S Dollars. Source: US Deptt. of Commerce.
leather products, handicrafts, marble items, herbal oils, and many other such items. Already, software exports have found a reliable and favourable market in the US, but most of the exports are unreported or acknowledged. It is important that TDAP must also set in motion programs to introduce and market new nontraditional items into the US. At the same time, FTA should enable Pakistan to import state-ofthe-art machinery, energy, medical and oil drilling equipment, raw cotton, and many new innovative products that would be instrumental in improving production, productivity, and economic savings. Furthermore, the Finance Ministry must also develop an understanding for financing of American products for Pakistan at favourable rates, terms and conditions with US Eximp Bank, OPIC, and even directly with major American financial institutions. Roadblocks: It must be understood that the signing of FTA between Pakistan and the US may not prove smooth sailing. The three main players in creating complications, hindrances, and anti-FTA hype are certain members of the US Congress (who would dig out issues such as the Balochistan imbroglio, Shakil Afridi incarceration, harbouring a terrorist network, etc), the American labour unions, specifically AFL-CIO, who abhor the concept of FTA, and of course the ever-vigilant Indian diasporas through its various organizations. Pakistan has suffered from this intensive lobbying in the past and there is more of a negative image of Pakistan nowadays than in the past. The yo-yo relationship between Washington and Islamabad is a testimony to this mindset. To counter any such moves, and to further protect the share of the American market, it is incumbent upon the private sector to manifest a determined role in evolving a workable and effective lobbying strategy. It is proposed that FPCCI or even the Textile Forum must hire the services of well known lobbyists in the US who can advise, guide, and pursue the interests of Pakistani exporters. A Political Action Committee could be set up under which the case for Pakistani exporters could be highlighted at various forums and institutions, especially in developing relationships with members in House of Representatives and in the Senate. The post-November scenario, after the US Presidential elections may bring about a revisit of the delicate relationship between the two countries. It is crucial that trade and investment must not be held hostage to other sensitive issues that are impacting this relationship. Future: Policymakers in both the countries understand the dynamics of this delicate relationship. Pakistan needs to be economically sustainable since most of the policies made by economic managers have not been as effective as envisioned and planned. Both countries have the critical mass to benefit from the ground realities. Washington must take the essential first steps to initiate a strong economic relationship since only through trade and investment would Pakistan hold the fort and overcome the myriad problems, both home-grown as well as externally influenced, that have affected the lives of 190 million denizens of Pakistan.
TRADE & INDUSTRY
Industrial & Agricultural Trade: Key Considerations
H
istorically, Pakistan has been spending billions of dollars on import of luxury items and stuff that could have been manufactured in Pakistan or, for that matter, technology thereof could have been imported and used for manufacturing them locally. Ironically our economic managers have not been able to develop related policies and find tools to support Pakistani industries and agricultural sectors’ exports and earn to build up much needed foreign exchange reserves of the country. Exports GDP & Employment Trends over the last 10 years Real GDP Labour force Employment Unemployment Valuerable Employement (VE) 170.0 160.0 150.0 140.0 130.0 120.0 110.0 100.0 90.0
19 99 -2 00 0 20 01 -2 00 2 20 03 -2 00 4 20 05 -2 00 6 20 06 -2 00 7 20 07 -2 00 8 20 08 -2 00 9 20 09 -2 01 0 20 10 -2 01 1
80.0
Pakistan’s GDP comprises of 21.2% agriculture, 24.5% industrial and remaining 54.3% services, whereas 43% employment is related to agriculture, industry provides 20.3% and services sector meets the need of 36.6% labor force. There are rich options available to economic managers and ruling elite to explore and find ways and means to boost exports, a trace of which was witnessed during the last fiscal year where the country’s exports reached USD 24.82 billion mark. Despite that, however, Pakistan’s trade balance has been negative –USD -15.4 billion. The State Bank of Pakistan has been offering incentives to promote exports and providing financial support to genuine exporters. However, according to the leading industrialists and businessmen, there has been a lack of coordination among the concerned government bodies which hampered the progress and planned results could not be achieved. The country has had wonderful economic plans, central bank’s proactive trade related mechanism and industrialists’ business plans but graft, distortion red-tapism and bureaucratic attitudes never allowed the country to embark on journey towards self-reliance and prosperity. While talking to the Value Chain a very senior official of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) expressed the view that a high level committee should be constituted and given the authority to direct the
Value Chain report
concerned officials, as and when required, and implement economic plans specially those geared towards export of industrial goods, commodities and services, not only to the countries already in our exports net but also to other parts of the world so that the country’s exports market is not restricted or dependent on a few countries or a major country. This export related value chain can create a huge job market with Pakistan emerging, in a few years time, as regional and international job provider to skilled workforce from around the world to meet its own needs. A senior official and a director at one of the largest export oriented textile business further suggested that, keeping in view the current volume of our exports and data that represent needs and requirements of regional countries, smaller international buyers and large potential importers, a professional plan needs to be developed and made web enabled so that all partners and stakeholders can share data online, all run-time suggestions and actionables discussed and decisions taken. A professionally and carefully developed export program, along the lines suggested above, can help us manufacture and customize our products locally. With the help and support of our business community and government’s commercial counselor we can find customers across the globe, fulfill their needs, and as a result, we may increase our exports. The country needs to create a positive image in terms of both quality of its products and services and the related cost so as to attract customers in the foreign markets. A senior executive at a large business house expressed the hope that efforts will be made to develop “a professional plan” to market our country internationally , initially for what we already export and then moving on to what we can export. Through international print and electronic media, regular campaigns are needed to create and maintain Pakistan’s image as a country exporting quality products and services at competitive price. Pakistan is blessed with the availability of relatively low cost labor force, proactive central bank support, professional chambers of commerce, stock exchanges and other platforms. What is dragging us behind is lack of uninterrupted power and gas supply and maintenance of law and order in the country. Pakistan’s current exports comprise of textile and garments, agro food, leather, rice, cotton, fiber, tiles and marble, sports goods, surgical instruments, electrical appliances, software, carpet and petroleum products. Key driver for exports is textile which alone forms over 50% of total exports. Businessmen say that government initiative of considering local currencies in trade with China, Turkey, Sri Lanka and Iran will help boost Pakistan’s exports as already witnessed in a deal offered to India by Iran to sell oil worth USD 20 billion in local currency. It will especially be helpful in doing independent trade with China which is poised to become one of the largest partners in trade since last decade. www.valuechainmagazine.com 39
Foreign Trade over the last 5 – year Year/Month
Exports
Re-Export
Imports
Re-Imports
Balance of Trade
2006-07 2007-08 2008-09 2009-10 2010-11
1,029,311.7 1,196,637.6 1,383,717.5 1,617,457.6 2,120,846.7
9,726.1 45,527.6 21,927.3 23,470.1 30,576.3
1,851,805.9 2,512,071.7 2,723,569.9 2,910,975.3 3,455,285.6
232.0 690.8 1,642.9 14.3 2,072.6
-813,000.1 -1,270,597.3 -1,319,568.0 -1,270,061.9 -1,305,935.2
2011 May Jun Jul Aug Sep Oct Nov Dec
195,689.1 207,777.8 185,586.5 168,510.1 160,213.5 163,503.9 133,278.5 165,651.6
998.8 431.3 3,921.1 1,600.4 415.7 1,368.5 1,661.4 23.8
365,403.5 331,356.1 317,339.9 329,684.5 316,797.2 313,653.2 321,054.7 380,672.1
19.1 3,112.5 -
-168,715.6 -123,147.0 -127,832.2 -159,593.1 -156,168.0 -148,780.8 -189,227.4 -214,996.7
2012 Jan Feb Mar Apr May
172,701.2 182,157.8 178,943.7 202,009.7 196,886.3
3,296.5 2,184.9 2,562.9 1,043.7 165.9
328,907.1 313,707.6 317,229.3 340,480.4 355,053.2
-
-152,909.4 -129.364.9 -135,722.7 -137,427.0 -158,001.0
Agro-based produce in the form of commodities, packaged food, frozen food, livestock and dairy products can do wonders if proper plans are developed and pursued. In 2011, agro food exports registered an increase of 66.24%. Pakistan has vast opportunities for exporting agro foods. The owner of a medium -sized farming business suggested that in order to improve agro foods exports the government should promote and encourage skilled farmers and young people to utilize for agricultural purposes unutilized government land and also ask large land owners to either utilize their land or lease the same to other farmers for agriculture purposes. If this could be done, it would produce positive results. Alternatively, the government can provide adequate support to agriculture sector in terms of training, tools, working capital requirement, easy loans and so on. This will help boost agricultural produce which may be processed, packed and exported to earn foreign exchange. Experts are of the view that Chinese economy will overtake the US economy by 2018. Pakistan should do its homework and be prepared to get its market share in terms of trade with currently 2nd largest and potentially the largest economy of the world. Pakistan’s overall trade with Indonesia has reached USD 1.2 billion out of which Pakistan’s exports are worth USD 300 million. Under the preferential trade agreement (“PTA”) signed with Indonesia last year Pakistan has offered zero rated tariffs on fresh fruits (kinno, lemon, grapes, apple, pears, apricots, dates, wafers and biscuits, fruit juices). Pakistan can also export, on reduced tariff rates, fan (ceiling, wall, table etc), cotton yarn, fabric, knitted garments for men, sea food, badminton/tennis rackets; and leather goods. Hopefully, Pakistan’s exports to Indonesia, in the next 5 years, may go up to USD 3 billion and overall trade to USD 5.5 billion. An exporter from Punjab suggested that TDAP has been engaged in holding exhibitions and seminars which serve to enhance exports and exports related interactions for future 40 www.valuechainmagazine.com
(Million Rupees)
cross bordertransactions. However, there is an urgent need to strengthen and liberalize the role of the government bodies and that of the chambers of commerce and related committees engaged in promoting exports enabling them to put ideas into actions and implementing plans through serious follows up and coordinated efforts. Reportely, the government in its new trade policy (20122015) will be projecting exports target of USD 100 billion 2012-15. This is a healthy sign and must be welcomed. The new trade policy will focus on issues related to quality, standards, regulations, trade disputes and enforcement on priority. As per draft agro-based products will be given their due place in the trade policy, while exploiting potential in rural and semi-rural areas. Services sector that contributes up to 54% in Pakistan’s economy has not been able to get its share in global trade. Reports are that the new trade policy will focus and lay emphasis on making efforts to double the services exports during the next 3 years. In terms of regional trade, the new trade policy will reportedly focus on increasing the current volume of exports to China, Afghanistan, Iran and India while special incentives will be offered to attract investment in the exports oriented industries and special economic zones. These are healthy signs and will hopefully find practical manifestation too. Some of the industrialist who were contacted were also found quite optimistic. They expressed the hope that a new mechanism will be introduced so that synergies can be derived and plans put into action enabling all exports oriented industries, government’s trade targets and policies being implemented on the ground with budgetary resources synchronized in a well coordinated direction through a purpose built policy implementation system. Draft trade policy details also provide a view that exports to Asia will be increased to 60% from current 46%. Though this target does not seem to be ambitious but still it appears to be moving in the right direction. These and other related measures, if implemented in letter and spirit, will hopefully create an enabling environment for export related interactions.
TRADE & INDUSTRY
Automobile Industry in Pakistan: a key player in economic growth
A
utomobile industry is considered as one of the leading industries world-wide- Pakistan included. With its economic and job multiplier effect and its linkages with allied industries, automobile sector has become a key player in the growth of the national economy. Despite global recession, escalating inflation and deteriorating value of the Rupee against dollar there has been a constant increase in investments in the auto industry sector in Pakistan. This was clearly evidenced by the fact that during the first four months of the current fiscal year, the automobile industry registered an increase in output of approximately 10 per cent as compared to the corresponding period of the year before. This has happened in an environment where various other businesses are either closing down or moving out of Pakistan to countries that provide a comparatively stable environment to conduct business. Pakistan produced its first vehicle in 1953 at National Motors Limited at Karachi to assemble Bedford trucks. As per industry sources, automobile industry is a capital intensive industry that contributes 2.8% into GDP, provides thousands of direct employment and engages indirectly around 2000 vendor units. The sector has roughly around Rs. 100 billion investments and contributes PKR 63 billion as direct and indirect taxes. It has been able to introduce world renowned automakers in the country through technology transfer arrangements that are leading towards self reliance in this sector whilst saving huge foreign exchange. The industry has an annual turnover of PKR 300 billion. Currently basic and luxury cars of various cubic capacities, loading trucks and vans, jeeps, buses, tractors and motorcycles are being produced locally. With increased production and loan facilities provided by the banks and financial institutions, the industry has continued to grow over time. It is unfortunate, however, that the benefits of new hybrid technology could not be passed on to the buyers of local cars although hybrid technology cars are mass produced in international markets where hundreds of thousands of hybrid technology cars have so far been sold. Protectionism is a strategy applied world over to protect domestic industries by taxing imports. Accordingly, import of new or used cars is heavily taxed. During the last decade in Pakistan, import of used cars was allowed with some conditionalities. However, this led to the influx of used cars and tended to undermine the growth of the local auto industry. This started creating a gulf in the relationship between the government and the local car makers. The gulf in government-local automakers relationship has continued to grow over time which is not a good sign for the growth of this otherwise lucrative industry in Pakistan. The auto industry saw boom in mid 2000 but it declined later. Although auto sales picked up last year but influx of
by Yousufzai
used cars has marred the projected plans for expansion. Pakistan requires a long term automobile policy whereby local buyers can get maximum benefit in terms of better technology that could produce better quality of vehicles made available to the users at reasonable prices. At the same time local automobile industry should be protected. Reportedly, the government lost over PKR 15 billion by importing 50,000 plus used cars which had an adverse impact on the country’s foreign exchange reserves. Since the local cars are expensive, buyers tend to purchase used imported vehicles on either the same price or with a very small difference, presumably because of quality concerns. The trend needs to be reversed with useful and effective policy decisions by the government. Immediate implement of non-tariff barriers that may include certain conditions on import of new or used cars might perhaps be one of the steps as proposed by the automakers. From consumer’s point of view, local automakers have not been able to compete with international car makers in terms of quality, reliability, technology and prices. Also they have not been able to achieve “deletion level” whereby they were to increase local content of the vehicles to reduce cost and be able to sell them cheaper as has been done in India. According to a government official, in 2006 deletion program was replaced under WTO regime to gradually phase out deletion programs. However, auto parts which indigenized by 2004 have been placed at higher rate of custom duty. This needs to be looked into and resolved for mutual benefit of the government, the auto makers and the end users. Despite factors like rising inflation, increasing cost of electricity coupled with massive load-shedding, deteriorating law-and-order situation and other adverse factors inhibiting the growth of Pakistan’s economy, the automobile industry has the prospects and potential to spearhead the country’s economic growth and contribute, in a major way, towards job creation and industrial investment. It is important therefore that policy decisions are taken and implemented to reap the benefits the industry offers. www.valuechainmagazine.com 41
COVER STORY
Factory fire in Karachi: biggest in Pakistan’s history
L
ife is a precious gift of God; it must be protected and preserved. Tragically, however, in parts of the present day world, mired in conflicts, terror and turmoil, human life seems to have been relegated to a position where it is considered the cheapest and worthless. The killings and deaths around, in Karachi and elsewhere in the country, either on account of criminal negligence or as a result of the machinations of human ingenuity, simply attest to this assumption. These tragedies, which at times are of a very high magnitude in terms of numbers and awfully appalling in nature, are sadly a matter of almost a daily routine. Such a heart-breaking, heartwrenching industrial disaster, the likes of which are hard to find in Pakistan’s 65 years history, was witnessed in a garment factory in Karachi that caught fire on September 11, incidentally coinciding with the date marking the death anniversary of the Father of the Nation. A similar incident, though comparatively of a lesser magnitude, took place in Lahore the same day killing around 30, including the owner and his son, and causing burn injuries to many. According, to reports, the factory fire in Baldia, Karachi, claimed around 300 precious lives, and left around 100 injured—this is not the final figure; the actual death toll may be far higher because several dozen workers are still unaccounted for and presumably dead. The dead also included 17 women and 7 children who were not the factory employees, they had accompanied their mothers or relatives to the factory. It is said that around 500 people, including 50 women workers, were inside when the deadly fire broke out and swept through the ill-fated factory. Many of the deaths were caused due to smoke and suffocation, especially those of the workers who were trapped in the basement, for lack of ventilation. The only exit from the building was reportedly through a door with an electronic lock which too had become non-operational due to suspension of power supply as the fire erupted. “All the exit doors in the factory were locked while the doorways and stairs were stuffed with finished merchandise and had barred windows which made it difficult for the workers to escape,” said a survivor of the incident. And those – over 65 or so–who could manage to get out of the building broke their bones as they jumped out of the windows to escape the furry of the flames. “Some of us quickly took tools and machines to break the iron bars. That is how we managed to jump out of the windows down to the ground floor,” said one of the survivors who was injured and was in hospital undergoing treatment. According to him, he was working with over four dozen other workers including women, on one of the floors when a fireball came from the staircase and engulfed the entire area. “A lot of people could have been saved if there were no metal grills,” he added. The bodies of the dead were badly charred, some to an extent beyond identification until their DNA tests results were received and matched. The death toll and the time taken to control the fire put a big question mark on whether precautionary measures were taken to ensure provision of emergency exits, fire-fighting gadgets, training to workers to combat emergencies, availability of first-aid kits, the response time of the city’s rescue organizations and, more
by Jauhar Ali
importantly, their capacity to meet such eventualities. Reports are that the four-storey building had no ventilation points, leave alone emergency exits, emergency equipments like fire alarms, sprinklers or fire extinguishers. No safety measures had been taken in the building design and no training whatsoever was imparted to the workers to meet emergencies–the essential pre-requisites that call for necessary care and caution as safety measures to guard against related danger especially in a factory that consumes inflammable items as raw material. Regarding the capacity of the rescuers to face such challenging situations, the chief fire officer Ihtishamuddin admitted that his department lacked the required fire-fighting equipment. “The city needs at least 50 snorkels and there is also a shortage of fire tenders and staff. One fire tender is required for a population of 100,000,” the chief fire officer submitted before the investigating tribunal. According to the owners of the factory, the rescue organizations took more than an hour to arrive at the scene. The Fire Brigade officials termed it a “third degree fire” which engulfed the entire building within minutes and damaged the structure which had reportedly been poorly built, and that too illegally, ignoring all the rules and regulations of the Hazardous Occupation Rules 1963 that fall under the Factories Act 1934 and provide for regulating the health and safety facilities, ventilation, overcrowding, and precautions in case of emergencies. Interestingly, in their statement to the police, the owners dispelled the impression that the industrial unit had only one exit and rejected the reports about its ill-designed structure. In his report submitted by the Director-Labour- West Division, the factory was not even registered under the 1934 Factories Act. It is simply pathetic that we are still following the factories ACt framed in British era. Also it is beyond one’s imagination how a factory that has capital of between $10 million and $50 million and has been exporting its garments to Europe and the United States for years, could have escaped the attention of the regulatory agencies. What seems to be a matter of serious concern is that the General Manager of the factory had reportedly ordered the factory gates to be closed, and none of the workers was allowed to leave the premises without being ‘checked’. “The gate was closed. There was no access to get out. We were trapped inside,” said another worker Liaquat Hussain while talking to newsmen from his hospital bed. “The owners were more concerned with safeguarding the stockpiles of garm- ents in the factory–piles of stonewashed jeans meant for export to Europe–rather than the safety of their employees.” Surprisingly, the entry and exit gates of the factory that usually remained open, were, according to some employees of the factory, closed on the day of the incident. Was it deliberate or incidental? This aspect needs to be investigated. Amidst conflicting accounts so far given before the investigating tribunal, the real cause of the fire remains a mystery and will continue to be a subject of speculations until official investigation report is made public. According to the preliminary report, the fire is stated to have broken out because of a short circuit. The report contradicted what the fire chief and the electrical inspector told the investigating tribunal. According to them, there were no signs of a short circuit. www.valuechainmagazine.com 43
The cause of the fire is yet a mystry. Some workers believed that a a faulty generator may have caused it. According to yet another but unconfirmed report, the fire started when a boiler exploded and the flames ignited the chemicals that were stored in the factory and the fire engulfed the entire building leaving little room for those trapped inside to breathe again. The senior police officer, SSP Niaz Khoso, investigating the disaster, said that the fire erupted on the first floor where a group of workers were sorting out the finished material when sparks were seen coming from electricity cables installed unusually low on the walls. But the owners claim that the doors were not locked and all the equipments including the boiler, generator and fire extinguishers were functioning. Interestingly, the factory owners who acknowledge they were in the premises till 12 midnight, disappeared thereafter leaving the factory in flames. According to their own statement, they were advised (by someone) to leave the factory. Who advised them to go and whereto is yet a mystery. Surprisingly, the owners reappeared on September 14 after having obtained bail before arrest from the Larkana bench of Sindh High Court, and said they would disclose before the media the name of the person who asked them to leave the factory premises. But when, they did not indicate. Why the owners left the factory and went to Larkana (while the factory was still in flames) and on whose advice? Why did they choose to obtain bail before arrest from Larkana bench of the Sindh High Court? These questions will keep agitating the minds until a satisfactory explanation is provided. It is said that more than 40 fire tenders along with heavy machinery took 45 hours to extinguish the fire. Experts from the Fire and Civil defence told the news media that the strategy of the firemen to extinguish the fire with water was not understandable because, according to them, it was a “third degree fire” and could only be controlled with “foam extinguishers rather than water.” Besides, knowing that there were no ventilation or emergency exit points, the firemen should have dug holes in the walls to allow for the smoke to come out. Some of those who died of suffocation could perhaps be saved this way. Sadly, no such effort was made to allow for the smoke to come out of the factory building. Investigating Officer, Inspector Chaudhry Zafar Iqbal made yet another startling disclosure. According to him, some elements who were not factory employees but were colleagues of those who had been receiving extortion money–more than Rs 4.5 lakh per month–came and showed their muscle. Who were those elements? Perhaps the investing tribunal might discover that. Chaudhry Zafar Iqbal also disclosed that around 80 persons came out looking at the factory in flames but did nothing to extinguish the fire. Surprisingly, only around 200 out of more than a thousand workers of the factory were registered with the Social Security Employees Old-Age Benefits Institution; the rest were ineligible for compensation to their families from the Workers Welfare Fund. EOBI Chairman, Nazar Gondal has, however, assured that the families of the victims, whether registered or unregistered, will be compensated. Sindh Government is also reportedly inclined to offer financial support of Rs. 500,000 each to the families of the dead and Rs. 50,000 each to the injured in the disaster. KESC has announced they would waive all outstanding dues on account of electricity bills of the victims. What the disaster clearly highlights is that there was a total failure on the part of the administrative machinery and the regulatory authorities to perform their mandated role, due either to their incapacity, lack of expertise to assess the risks involved or for whatever other reasons that they acted against their will to perform their role and responsibility to ensure appropriate execution of building control laws and adherence to the industrial regulations. While probing the cause of the fire, it would be only appropriate if the role of administrative machinery and that of the regulatory agencies is also thoroughly investigated, responsibility thereof fixed and exemplary punishment awarded to those found guilty so that it serves as a lesson for others. Likewise, the role of the banks that financed the industrial unit also needs to be investigated. Banks financing such businesses are supposed to have ensured that the owners have complied with all the regulatory requirements including factory design, building structure and construction, fire fighting equipments, their functionality and the arrangements made to meet emergencies in case of eventualities. On the instructions of the State Bank of Pakistan, bank accounts of the factory owners have been frozen. This has been necessitated by the many contradictory reports about the role of the factory owners in the unfortunate fire, the priorities the owners had during the fire emergency, and the possibility that they may eventually be required to pay hefty penalties as determined by the investigating authorities that include the Sindh High Court and the Sindh Government.
TRADE & INDUSTRY
Pakistan lose on Global Competitiveness Index 2012-13
by Mustafa Ali Sheikh
Ethopia 121 Cape Verde 122 Uganda 123 Pakistan 124 Nepal 125 Venezuela 126
T
he world today is on the threshold of a myriad of problems and challenges - economic volatility, political instability, extremism, social degradation, energy crisis, rising cost of production, inflation, trade deficits and many more. Pakistan is no exception. But the tragedy in our case is that we as a nation are generally apathetic and oblivious in trying to focus on addressing our dilemmas. As a result, the country which is otherwise full of potential ranks far behind many other nations around the world. In terms of competitiveness, which is the hallmark for development and growth, Pakistan is rather in a precarious situation relative to our global competitors. In the Global Competitiveness Report 2012-2013, released by the World Economic Forum (WEF), Pakistan has fallen in ranking by another six notches having been ranked among the bottom 20 of the 144 economies around the world. The World Economic Forum (WEF) publishes the annual report which ranks economies on the basis of their performance on the Global Competitiveness Index reviewed in terms of their achievement on three broad categories – basic requirements, efficiency enhancers and innovation and sophistication factors. Pakistan has lost its competitive advantage on almost all the three pillars of competitive index except for health, primary education and labour market efficiency. Also on the innovation and sophistication pillars, Pakistan reportedly put up a good performance but on the factors for basic requirements and efficiency enhancer pillars Pakistan continues to show performance which, according to Mishal Pakistan Chief Executive Officer, Amir Jahangir, can
only be regarded as ‘poor’. Mishal Pakistan is the country partner for the Centre of Global Competitiveness and Performance at the World Economic Forum. The ‘basis’ requirements category is further subdivided into five segments namely institutions, infrastructure, macroeconomic, stability, health and primary education. The ‘efficiency enhancers’ category comprises higher education and training, goods and market efficiency, labor market efficiency, financial market sophistication, technological readiness and market size while the ‘innovation and sophistication factors’ category is made up of business sophistication and innovation. According to the report, Pakistan lacks a long-term view of competitiveness with the level of corruption and poor governance being the important factors resulting into slowing down of its economic growth, On indicators like public trust on politicians, irregular payments and bribes, favoritism in government decision making, wastefulness of government spending, and business costs of terrorism, crimes and violence, the country has been ranked among the worst. It is interesting to note that USA, which has been at the top in rankings for many years, also fell 2 slots to 7th. This is the fourth year of decline for the United States because of its financial crisis and continuing weaknesses in its macroeconomic stability. This, however, should not serve as a source of consolation or provide grounds for complacency for a developing country like Pakistan. Countries like Uganda, Ghana and Ethiopia, and regional peers like Sri Lanka (ranked 68), Bangladesh and India (ranked 59) enjoy a higher rating than Pakistan. www.valuechainmagazine.com 45
“Persisting divides in competitiveness across regions and within regions, particularly in Europe, are at the origin of the turbulence we are experiencing today, and this is jeopardizing our future prosperity.” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum. “We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.” On the index of business costs of terrorism, Pakistan scored the 143rd position. However, on the judicial independence index, Pakistan came in at a healthy 57. On the macroeconomic environment indicator, the country was clubbed with the bottom six countries at 139th slot in the index. On budget balancing, the country has been ranked at 125, on gross national savings 107, on the inflation index at 132, and in terms of country credit rating, it has been ranked at 116 among the 144 nations. In terms of health and primary education Pakistan is placed at No. 117, in higher education and training at 124 while in goods market efficiency it stands at 97. Performance in governance in terms of Favouritism in Decision Making and Wastefulness of Government Spending have also shown significant decline in Pakistan’s ranking which stood at No. 129 and 96 respectively. The Pakistani business community identifies corruption as the most problematic factor for doing business in the country. The report indicates that Pakistan has failed to come up with effective regulations on intellectual property protection, where the country lost its position at 93 and slipped to 108 during 2011 to 2012. Law and order problems have been a serious threat to economic activities. The war on terror and targeted killings have been consistently and adversely impacting business throughout the year. This reflects in the ranking, as the reliability of police service indicator has plunged to 127 in the current year, as compared to 116 in the previous one. On the Macroeconomic Pillar, the government’s performance has been weak with the budget balance ranking (% of GDP) deteriorating from 108 in 2011 to 125 in 2012. The general government debt has also seen poor performance as it has lost 11 points from last year, by being ranked at 107 in the current year. Nevertheless, Pakistan has shown some positive indicators on improving its competitiveness, where the burden of government regulation improved from 76 in 2011 to 62 in 2012. Transparency of government policy making also improved in terms of ranking from 119 to 109 while the country credit rating index showed an improvement from 116 last year to 123 this year. The economy also showed flexibility in firing and firing practices where it improved in ranking from 33 last year to 21 this year. The pay and productivity index has also shown gains, wherein Pakistan has improved 13 points and now ranks at 73. Similarly, ranking of strength of auditing and reporting standards now stood at 86th in 2012-13 against 103 in 2011-2012. The report commends the recent steps taken by the SECP administration. Sharing details of the SECP's recent initiatives, SECP Chairman stated to media that the demutualization of stock exchanges has been achieved. It will lessen the conflicts, which were found in the mutualized set-up where the brokers enjoyed the rights of ownership, decision-making and trading. It will support enhanced governance and transparency at the stock exchanges and will bring about greater balance between the interests of various stakeholders. The capital market investor education and awareness program was launched in July 2012. It aimed at making people aware of various financial products and understanding their rights and responsibilities so that they could make informed investment decision. The revised Code of Corporate Governance was launched in April 2012 46 www.valuechainmagazine.com
and a similar code for the state-owned enterprises is being finalised. Since May 1, 2012, functional websites have been made mandatory for the listed companies indicating significant improvements in the performance of the Securities and Exchange Commission. The report says that Pakistan has improved on regulation of securities exchanges and is now ranked at 55, as compared to 70 last year.
Top 10 most competitive economies
Switzerland, for the fourth consecutive year, tops the overall rankings in The Global Competitiveness Report 2012-2013. Singapore remains in second position and Finland in third position, overtaking Sweden (4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands (5th), Germany (6th) and United Kingdom (8th). The United States (7th), Hong Kong (9th) and Japan (10th) complete the ranking of the top 10 most competitive economies.
Competitiveness of Asean countries
Malaysia has retained its second spot among Asean countries in the report. The report ranked the country 8th among 22 Asia Pacific countries ahead of China, India and other Asean countries except Singapore, and placed it among the most competitive countries globally.
BRICS
The large emerging market economies (BRICS) displayed different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Among others, only Brazil (48th) moved up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings. India has dropped three ranks from last year in the global competitiveness report because of the political and economic logjam that has stymied growth and led to widespread criticism of the government. Now 59th on the list, India has slid 10 places since it peaked in 2009. Other key indicators holding India back include low education and health standards (101 rank), poor transportation, insufficient reach of information and communications technology, poor energy infrastructure, supply, and transport. Once ahead of Brazil and South Africa, the country now trails them by 10 ranks, and is lagging behind China by 30.
Others
Mexico has improved its economic competitiveness and ranked 53rd (up from 58th place in 2011) in the list while Philippine moved up 10 ranks and placed at 65th position. Qatar, ranked 11th in the Global Competitiveness Index, reaffirmed its position as the most competitive economy in the region and advanced three positions up from the previous year ranking. In the region, Saudi Arabia remains among the top 20 (18th). The UAE (24th) has improved its performance but Kuwait (37th) shows a slight decline. Saudi Arabia maintains the second-best place in the region and falls by one position from 17th to 18th position overall. The country has seen a number of improvements to its competitiveness in recent years that have resulted in a solid institutional framework, efficient markets, and sophisticated businesses. Competition is on the rise. While increasing global competition is inevitable, rising growth and incomes in other countries present potential new opportunities and market for Pakistan. Competitions from rapidly growing countries are changing business norms and the links between national economies. Competing in the ongoing turbulent environment is quite challenging especially for a country like Pakistan. Sustenance in such an environment calls for effective strategic planning and leadership for implementation thereof in letter and spirit.
BANKING & FINANCE
The defective performance yardsticks
T
he half yearly results of Pakistan’s banking sector have been released. The big five banks registered increase in their profit that, on the aggregate, amounted to a rise of 17 percent over the comparative period last year. It was indeed commendable given the many crises ailing Pakistan. But it should also pose a question to the regulators and economic planners about the role banking sector played in national economic growth. An oddity that has been there for decades is the absence of a system that ensures that banks’ performance i.e. lending and earning is synchronized with economic growth. GDP growth has been slowing down for the last five years. Undeniably, it was partly the result of the global recession but the scenario asked for demanding of the banking sector– backbone of the economy–to do more for a soft landing, which wasn’t done. Neither the regulators nor the economic planners hold banks accountable for the huge disparities in economic growth and their lending performance and profits. If any such exercise is conducted periodically, there is no media disclosure thereof. Absence of performance-based accountability permits banks to focus only on serving the interests of their shareholders, but not the economy from which they all earn their profits. Banks must not overlook the fact that the raison d’être for their existence is channelling national savings into economic activities that offer optimal economic returns besides ensur- ing a more secure future for the economies that those banks operate in. The current performance of the banking sector is clear denial of this prime objective. What is more worrisome is the fact that the banksmanagers and shareholders–no longer care about being seen as drivers of economic growth. How can they feel at ease merely with high profits in times of economic downslide, is baffling. This reflects a mercenary attitude that doesn’t befit banks, but you don’t note much concern about this “odd” posture that the banking sector has adopted. Pakistan’s harshest reality is that each year 3.6 million, mostly uneducated young boys and girls join the youth chunk of the population that now forms 53% of the total. These boys and girls are massive units of energy; it is up to the system which direction this energy is allowed to go in–petty and big crime, terrorism, or some basic professions wherein this lot makes economically productive use of its energy, and gets into the habit of earning its living through hard work. They can’t be educated, but vocational training can certainly turn them into productive, self-sustaining units, which could be employed in Pakistan or abroad. The fact is that for too long, courtesy the steady decline of the Rupee and the entry of individuals with short-term ambitions into Pakistan’s businesses and industry, its industrial base was not replaced, became largely out-dated, and thus incapable of producing goods at competitive prices. In this backdrop, the option, for the present, is to optimize on all options offered by agriculture, orchards, dairy farming, animal husbandry, and poultry farming sectors.
by Kamran Khan
With a large uneducated population that’s what Pakistan can, and should capitalize on. What people expected of Pakistan’s banks was to focus on these sectors, firstly, to maximize the output and employment opportunities that such ventures can offer and secondly, cut unemployment that is fuelling unrest, crime and strikes, that frequently stop economic activity, and worsen Pakistan’s Country Risk profile. Banks haven’t bothered to finance vocational training centers that may be run according to strategic guidelines and inputs from beneficiary industrial sectors, or to promote corporate farming on which Middle Eastern investors were pretty keen. Banks also did not identify and finance industrial sectors that had the potential for import substitution, which could lower Pakistan’s trade deficit, reduce its external debt, and stabilize the Rupee’s exchange rate. But their biggest failure has been a substantial increase in the critical savings-to-GDP ratio. Pakistan is the sixth largest producer of fruits, but since we couldn’t develop the capacity to preserve and process all the fruits we grow, 40% of their crop simply rots. We need cold chains to transport fruit to markets and to fruit processing plants which must be setup countrywide to offer jobs locally. With this infrastructure, export of fruit (processed and fresh) could earn additional $4 billion a year; its side benefits would be higher activity in heavy automobile, refrigeration, mobile cold storage, fruit processing and packing materials sectors, more importantly, in employment. Activity rise in these main sectors could also increase activity in their sub-sectors. It is well known that the banking sector does not engage in economic research. Even in banks that have research units, the objective of research isn’t aligned even with the needs of the banks’ risk-asset portfolios. Research is focused more on analyzing the fallout of global economic developments, not on forecasting the future economic trends that they will lead, to warn both banks and their risk-taking customers. Another worrying regulatory laxity (allowed since 2000) was outsourcing of many services without realizing that this will restrict bankers’ risk assessment and monitoring abilities. It is questionable whether lending banks knew the risks involved in financing the two ill-designed and disasterprone industrial units (one each in Lahore and Karachi), fires wherein killed hundreds on September 11. It is also questionable whether lending bankers had any idea of the risks taken. Operating results of the banking sector may seem impressive but a risk-averse lending culture hurt investor confidence, that Pakistan is paying for; its cost is multifaceted–low economic growth, shortages, joblessness and social chaos. The ongoing flight of capital too didn’t force banks to think of its fallout on them, even if they ignored its social dimensions. What they need is strengthening of the setup to share risk with support services via tough regulatory regimes for these services. Risk-aversion and scaling up their mark-up spreads to ridiculous levels isn’t the solution that the banking sector has opted for. www.valuechainmagazine.com 47
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BANKING & FINANCE
Growth of branchless banking in Pakistan
F
inancial inclusion has become a prerequisite for economic growth and development of any country. It also plays a role in the alleviation of poverty. However, despite being given directives and incentives by the central bank the banks in Pakistan have failed to penetrate enough among the population of the country especially in the backward and far flung areas. In Pakistan the extent of financial exclusion is quite significant whereby only 12% of the country' population have bank accounts, 56% of the adult population do not use either formal or informal financial products. It seemed almost impossible to achieve any reasonable ratio through formal banking framework especially as the most of the banks have been privatized and thus are least interested to open branches in the un-banked far flung and backward areas of the country which is not cost effective. Therefore, along with alleviation of poverty financial inclusion has also been made one of the main objectives of the financial reforms and innovations. The Financial Inclusion Program (FIP) implemented by SBP with support of the UK Department for International Development aims to transform the financial market with a clear objective to provide equitable and efficient market based services to otherwise excluded poor and marginalized population including women and young people. FIP focuses on financing for micro and small enterprises during the first year of the program and in the next four years develop and implement strategies for low income housing finance and rural finance while remittances and Islamic finance would be cross cutting themes. For the first time FIP has developed evidence based policy and a realistic target of reaching out to three million micro finance users by the end of 2010.The program will go beyond the provision of micro finance and small enterprises financing by exploring innovative interventions in sub sectors of rural financing, remittances, Islamic banking and low income housing. A key element for success of the program will be a productive partnership between the commercial banking sectors and the microfinance providers. The goal of this is to improve inclusive economic growth and to improve income and livelihoods opportunities for poor and marginalized groups in Pakistan. The key objective of this program is to improve access to financial services for the poor and marginalized groups and for micro and small enterprises in Pakistan. The potential of Branch less Banking (BB) in this situation thus is very high, estimated at 20% by 2020. In practice BB took its roots in Pakistan in April 2008, when SBP issued 'Branch Less Banking Regulations' which prescribe several BB activities including opening and maintaining BB accounts, account to account and person to person fund transfer, cash deposit, withdrawal and bill payments, merchant payments, loan disbursements/repay ment and remittances. The SBP had permitted the practice only through bank-led model where only authorized financial institutions can provide these services, with three permissible modes; one to one (one bank providing service through one agent), one to many (one
by Rauf Nizamani
bank and more than one agents entering onto an agreement) and many to many (a joint agreement between more than one banks and agents). These regulations were revised in June 2011 focusing increasing role of agents, convenience to customers and reduction in operating cost. Recently addressing 5th International Conference on Mobile Banking in Pakistan SBP Governor stated that ‘Central bank aims to provide basic banking services to every adult and bankable citizen in Pakistan. As a large portion of our population has access to mobile phones, we feel that if a workable partnership between banking and telecom sectors continues we shall see our dreams come true.’ In this respect SBP is already working closely with Pakistan Telecommunication Authority (PTA) and have also signed a Memorandum of Understanding (MoU) for enabling Intero- perability Framework where all banks and telecom companies can join hands to serve the customers. Formulation of the regulatory framework for interoperable mobile banking system is in the final stages. Interoperable systems are essential to mass adoption of mobile commerce. At present financial institutions and telecom companies can choose whatever business model suit their needs i.e. one to one or one to many. Existing agent network needs to be further capacitated to generate new demand, and to handle and service even larger volumes of transactions to establish the business viability of Branchless Banking Operations. Going forward SBP will be initiating actionable research on demand and supply side in collaboration with the Branchless Banking ecosystem for further development of such services in Pakistan. Existing BB network in Pakistan consist of services by four banks following different operational setups from mobile banking to services through banking kiosks. So far two of the services namely UBL Omani and Tameer Easy Paisa are fully operational large scale projects, while two others are small scale services catering to certain segments of population. BB network is steadily expanding in Pakistan with a number of projects in pipeline including some big players like MCB, Bank Alfalah and Mobilink planning to enter the BB market in near future. Rapid expansion in BB business is also revealed by available statistics where all indicators of BB activity exhibiting steep upward trend over past few months in number of transactions. During the fourth quarter of 2011-12 number of mobile banking accounts touched the figure of 1.45 million, depicting a remarkable growth of 37% over the quarter. The accounts activity level has also improved considerably as the number of active accounts increased by 66% during the quarter. Over 28 million transactions worth Rs 115.3 billion were processed during the quarter. The number and value of transactions have grown rapidly by 12% and 36% respectively during the quarter. The growth in value of transactions is almost three times more than the growth in the overall size of transaction which has increased from Rs 3, 376 to Rs 4,065. The agents’ network has www.valuechainmagazine.com 49
risen to 29,525 as on June 2012 from 26,792 as on March 2012. The agents now have presence in the 90% districts of the country. Bills payments and mobile top-ups remained the dominating activity with 50% share in total numbers followed by person to person (over the counter) fund transfers with share of 36%. Loan repayments of Rs 464 million primarily of Micro Finance Institutions were collected through BB agents. Growth expectation in coming quarter is fairly high as the existing two BB players are increasing their scale of operations and six other banks are in pilot phase and are likely to start their BB operations shortly. Moreover, banks are exploring avenues to increase the attractiveness of m-wallets for their customers, and offering them new services such as purchasing air-tickets, receiving salaries and pensions, utilizing ATMs through debit cards and internet banking. Going forward the numbers is projected to further climb steeply with new entrants and innovative products reaching the market. However, the extent to which these numbers exhibit actual rise in financial inclusion needs to be assessed carefully, given that some of the users could be from the already financially served section of the population. State Bank of Pakistan has established a Consultative Group on Branchless Banking to foster market development under the chairmanship of Executive Director of bank. The group is comprised of Pakistan Telecommunication Authority (PTA), National Database and Registration Authority (NADRA), banks, Micro Finance Banks (MFBs), Mobile Network Operators (MNOs) and Technology Solution Providers. The Group provides a common platform for branchless banking ecosystem developers and an opportunity to develop collective policy recommendations on critical issues. According to Head of Customer Strategy and Market Activation, Visa International, Lito Villanueva one of the key barriers to any new innovation in the economy or corporate sector is the rules and regulations of the country and in this regard Pakistan’s branchless banking has been fortunate not to have faced tough challenges. Compared to other emerging markets, Pakistan has had better success. Although the unbanked sector is extremely high but the mobile penetration among the consumers is relatively good. This point towards high potential in the mobile commerce sector. However, Pakistan needs to make sure that it has a dynamic agent network. The vendors catering to branchless banking need to be provided with ample information, training on liquidity management and a check and balance needed to be kept at the entire system for its success. The World Economic Forum global report on Mobile Financial Services gave extensive coverage to Pakistan praising the country for its fast developing branchless banking infrastructure. Pakistan has been declared as a breeding ground of innovations for branchless banking and has been successful in developing a variety of business models involving a wide range of players, including mobile network operators (MNOs), technology companies and even courier businesses. A survey conducted by CGAP to gauge the effectiveness of branchless banking and to determine that what were the income levels of the people who were using this service showed that 41% of the Easy Paisa users (respondents) lived on $ less than 2.5 per day and 69% of the customers lived on less than $ 3.75. This clearly shows the popularity of Easy Paisa or branchless banking platform among people 50 www.valuechainmagazine.com
who are in lower income cadre. This also points towards the fact that this banking platform which relies heavily upon technology has attracted people with no educational background. Its technological dependence or its introduction of a completely new way of executing transactions has not pushed away the users from using it. Another way to look at this problem is to look into mobile users’ growth in Pakistan which has gone from 3.5 million users in 2005-06 to 112 million users in early 2012. This exponential growth presents an opportunity to combine cellular services with a banking plat form so that banking services can be extended to the masses of the country. In order to make branchless banking popular the service providers need to primarily focus on five points: 1) Security-transaction security is important for the customers and for the future existence of the service; 2) Ease of collection-service provider has to ensure that its network is available everywhere. The cost of setting up a branchless banking network is significantly lower than setting up a conventional branch thus providing a huge opportunity in setting up a network; 3) Ease of use-the service should be easy to use so that the general public can easily adapt it and utilize it for their benefit; 4) Speed of transfer-Transfer mechanism should not only be secure but should also be fast; 5) Cost of service-One of the most important factors, the cost of using this service should not be unreasonable and should not force people in to using conventional banking mechanism, which in some cases might not be available. The role of State Bank of Pakistan in regulating these charges is pivotal. Some experts are of the view that online business combined with mobile banking can achieve same kind of wonder that has been done by credit cards and online sellers in the west. With less than 0.07% penetration of credit cards and with only 0.015% of Pakistani population using it online, mobile banking has a future in Pakistan beyond limits. However, each market has its own preferences and success can be measured by cultivating to their needs. Just looking at how many customers you have is not enough. That is just the tip off the ice berg. Value addition is pivotal to every firm’s success. Mobile banking in Pakistan is at its infancy and for purpose of wide-based adoption, it is pivotal to exchange views and ideas. In certain areas the industry has to work together. Adding distribution and awareness are the biggest challenges for the uptake of branch less banking. In a country like Pakistan, we have all key stakeholders such as the distributors and vendors, but the most important element-the end user is missing. Therefore, it is important to understand consumer behavior. In Pakistan, commercial units themselves prefer cash so that they can remain under the undocumented economy. Awareness should be created among stakeholders, and explain to them advantages of coming under the documented sector.
The key objective of this program is to improve access to financial services for the poor and marginalized groups and for micro and small enterprises in Pakistan.
BUSINESS
Role of Social Media in developing small businesses
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ocial media, although a relatively recent phenomenon is no more a mere buzzword; it has become an increasingly important part of businesses looking for quick and effective ways to develop a strong customer base and create their markets. The concept of social media is simple – it’s all about connecting, building relationships and gaining growing user’s trustincreasingly important and essential components for any business to achieve success. Social media has made the task of building and maintaining the business-customer relationships and gaining customer’s trust much easier. For small businesses, in particular, social media offers great amount of exposure to a large number of possible consumers and, given proper use, it can serve as a powerful tool to help them stay connected with the current customers while also establishing relationship with the untapped potential ones. There was a time, in not too distant a past in history, when social media was thought of simply as a kind of marketing left to be tried only by “social media experts.” It is now a part of the marketing mix used by a growing number of large and small businesses for marketing of their products and services. While traditional marketing tactics are still very important, social media tactics have now become a part of everyday marketing basics. In today’s world, driven and dominated by technological advancements, businesses increasingly tend to look for ways and means of marketing that help them stay connected with the everyday consumers. With the likes of Twitter and Facebook – social media channels – being adopted, businesses are able to connect with their customers on a much more personal level than in yester years, receiving positive or negative feedback which has never been easier, and making the voices of consumers more prevalent to a business’s success day in and day out. The modern day businesses approach to marketing, infused with social media, leans much more heavily on the 4 Cs of marketing –Content, Context, Connection and Communityrather than 4 Ps of conventional marketing- product, price, place in the market and promotion. Social media enables the businesses/entrepreneurs to spread their content scribing expertise to new audience free of cost, helps in creating a network with like-minded individuals and companies, involves the customers and audience in co-creation of product or finding new servicing ideas and helps to gather and analyze the feedback of customers/clients. Another important prospect of the digital social media is penetration into the lives of customers making it possible to hear everything that’s being said online about the brand, products, or industry in real time. Although embracing social media has its many advantages, there will always be some inherent risks of engaging in social media even on a personal level. The risks of having a social media account are numerous. By engaging in social media, corporations are playing with fire and although the benefits are great from a PR standpoint they can also be someone’s worse nightmare. For instance, the perpetuation of business
by K. Jehangeer Khan
scandals and corporate greed that was unveiled, thanks to social media juggernaut Wikileaks. By adopting social media as a channel for marketing of your products or services, you are allowing your image and reputation to be at the mercy of any individual who might find your web page. This is what a major corporation faces on a much larger scale on a day to day basis. That apart, the advantages of adopting social media as a marketing channel are much more than disadvantages, especially to individuals or organizations that wish to build a large customers base. For instance, check out the following statistics to discover social media’s great importance and popularity: • Around 62% of adults across the world use it. • The most famous Web activity is social networking. • Around 22% of the total time spent online is on network sites like Facebook, Pinterest, and Twitter. As of 2012, these top social networking sites produce amazing figures. • Facebook has approximately 901 million active users and 137.6 million unique views each month. • On average, a member spends 7 hours and 45 minutes on his or her Facebook page per month. • Twitter has an estimated 140 million active users with an average of 340 million tweets in a day. • YouTube gets 106.7 million unique visits every month and a user spends an average of 1 hour and 41 minutes watching videos. • It also receives 4 billion views in one day and ranks second among other search engines. • Google+ has more than 100 million active members This data looks incredible! Now, find out the role of social media in small business management. • Around 53% of small enterprises use it. • An estimated 88% of business owners using it believe that exposure and visibility is the biggest advantage of joining the social bandwagon. • Approximately 4% of businesses are on Twitter, 15% are on LinkedIn, and 19% are on Facebook. www.valuechainmagazine.com 51
REPUTATION
YOUR BUSINESS
BRAND ASSOCIATION PR AND EXPOSURE CLIENT RETENTION
Recently, in a public survey on the topic “Is social media a vital part of your marketing strategy? Or do you think your time and resources are better used elsewhere?” it was revealed that 81% of people believe that social media marketing is a worthwhile use of valuable time for their business and they achieved their targets. 19% people were of the view that they could use their time and resources better elsewhere or in traditional marketing techniques. Most of the small businesses understand the importance of social media, but do not know how to leverage it to produce real results such as acquiring new business, gaining customer feedback, and most importantly, boosting sales and profitability. A study, carried out recently, revealed that 67 percent of smallbusiness owners said they were holding back on investing in social media because they did not know where to begin. While deciding to adopt a social media strategy for marketing, businesses should be well equipped to feed their social channels with interesting content that will resonate with their target consumer groups. Simple rules are: 1) Post interesting content, 2) take every opportunity to start, join, or otherwise engage in a conversation. Do your homework, train your employees, and remain authentic to your brand. Most importantly, be sure to listen to customer feedback to shape the future of your business. Unless the businesses are in this state of readiness, adopting social media may be damaging. A recent Crowdspring study showed that 61% of small businesses are landing new customers through social media activities. Social media marketing can do remarkable things for small businesses, but only if it is properly implemented and maintained. In Pakistan also, social media channels such as Facebook, Twitter, Blogs, Forums and YouTube are increasingly being used and they are having a profound impact on how consumers interact, find products, get deals, shop and get information. For marketers, Social Media platform is not just a channel, but it’s an important part of their marketing plan. A lot of brands and their 52 www.valuechainmagazine.com
SALES
NETWORK GROWTH BUILD TRUST
marketing team are using Facebook pages, Facebook events, twitter accounts and YouTube videos effectively for their brand recognition and increasing their customer reach. Renowned designer Hussain Shehryar Yaseen (HSY), for instance, launched his fan page on Facebook in October 2009. Since then the HSY page has kept gaining popularity and has almost 466,105 participating members on the page helping the marketing executives to drive the marketing policy. A recent success on the page was the’ Lawn Name Competition’ which received more than 2000 entries. Engaging your customers is now a big thing in marketing. Gone are the days when an advertisement or a fashion shoot in a magazine was enough. HSY realizes this and is using his Facebook fan page to connect with his market effectively. This clearly shows the role of social media in upgrading business. Having said that, one may ask “can social media be helpful for the businesses that are already popular and need no brand recognition?” The answer is simply “yes”. Take for example the Facebook page of “Pepsi” and “Coca Cola. Their brands are very well known and yet both companies are involved in aggressive marketing campaigns through both traditional means as well as on social media. Pepsi has 8,968,369 fans on Facebook page and Coca-Cola has 50,775,653 fans. Both the giant companies are using social media to engage with their loyal customers via quizzes, events and feedbacks. No matter what your business is, it could be food restaurants, consultancy, media and communication or even HR services; you need the power of social media to touch the new heights of success. Social media has changed the way people do shopping. It has gigantically increased the trend of online shopping. The world’s largest retail brands are spending a lot of time and money on building their social networks as a key component of their overall e-commerce strategy. Almost every sort of business nowadays has its own Facebook page and twitter accounts connected with the online service/product page where clients/customers can purchase their products.
BREIFS
Regulatory Compliance SBP slashes refinance rate by 150bps
With a view to facilitating the industry, the State Bank of Pakistan announced a reduction in the refinance rate under the Export Finance Scheme (EFS) and the service charges under the Long Term Financing Facility (LTFF) and the Scheme of Financing Power Plants Using Renewable Energy by 150 basis points. As per SBP decision, the rate of refinance under the Export Finance Scheme applicable from September 10 shall be 8.5 percent p.a. Through IH&SMEFD Circular No. 4 the commercial banks have been asked to ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin/spread does not exceed one percent p.a. The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the Scheme, as specified in SMEFD Circular No. 15 dated October 31, 2009, will be adjusted accordingly keeping in view the revised mark-up rates. The rates of service charges for Participating Financial Institutions (PFIs) and rates for end-users under the Long Term Financing Facility (LTFF) have also been reduced by 150 basis points with effect from September 10, 2012. The rates of refinance under LTFF will now be 9.50 percent for financing up to three years, 8.6 percent for over three years and up to five years and 8.2 percent for over five years and up to 10 years. PFIs spread for these tenures will be 1.5 percent, 2.5 percent and 3.00 percent respectively. The end users’ rates for these tenures have now been reduced to 11 percent from 12.5 percent and 11.2 percent from 12.7 percent respectively, according to IH&SMEFD Circular No. 5. Accordng to IH&SMEFD Circular No. 6, the rates of service charges under the Scheme for Financing Power Plants Using Renewable Energy have been refixed at 8.6 percent for financing up to five years and 8.2 percent for over five years and up to 10 years with effect from September 10. Banks/DFIs will be allowed to charge 2.5 percent and 3.00 percent spread respectively for these tenures. The end users’ rates for these tenures have now been reduced to 11.1 percent from 12.6 percent and 11.20 percent from 12.7 percent respectively.
FBR suspends Sec. 153A of IT Ordinance
The Federal Board of Revenue on September 1 decided to temporarily suspend Section 153A of the Income Tax Ordinance, 2001 whereby every manufacturer had to collect withholding tax at the time of sale to all distributors, dealers and wholesalers. They will now not be liable to pay withholding tax and manufacturers will not be liable to collect the tax after the FBR moved to suspend a major tax measure introduced in this year’s budget.
The FBR would issue a notification under which Section 153A of Ordinance 2001 would be held in abeyance. There is no need to amend Section 153A of the Income Tax Ordinance 2001.
FBR approves amendments proposed by SECP
The Federal Board of Revenue (FBR) on September 12 issued Capital Gain Taxation (CGT) rules on securities’ trading incorporating all amendments proposed by the Securities and Exchange Commission of Pakistan (SECP) to facilitate investors of stock exchanges. The provisions of the new CGT rules contained notified through SRO 1119(I)/2012 dated September 12, 2012, will be applicable from April 24, 2012. SBP makes AML-CFT regulations more comprehensive: The State Bank of Pakistan has made Anti-Money Laundering (AML) and Combating the Financing for Terrorism (CFT) Regulations more comprehensive by revising the existing regulations M-1 to M-5 of Prudential Regulations on Corporate/Commercial Banking. While most of the requirements of the new regulations are already in place, some of the requirements will be effective from October 31, 2012. These regulations have been issued to all banks and development finance institutions (DFIs) with a view to introducing a comprehensive regulatory framework in line with international standards to mitigate the various risks arising from money laundering and terrorist financing. The AML/CFT Regulations provide a system of a Risk Based Approach under which customers will be profiled as per risk involved. The revised system will ensure clean and transparent banking transactions on the one hand and will enable the country to meet international standards on the other. The provisions of the regulations introduce a system of comprehensive list of ‘Red Alerts’ in the context of Pakistan, which will trigger security of accounts and transactions to ensure that proceed of crime are not processed through the banking channels.
ICH Exchange
Despite strong reservations of the Competition Commission of Pakistan (CCP) over the establishment of International Clearing House Exchange (ICH Exchange), Pakistan Telecommunication Authority (PTA) has reportedly issued Policy directive to Long Distance International (LDI) operators for setting up an ICH Exchange. LDI operators had agreed to abide by the notification of new rates in a meeting on August 29 while PTCL and LDI operators signed ICH Exchange agreement on August 30 in this regard. On the other hand, CCP issued a warning to the PTA, the Ministry of Information and Technology and LDI for not taking any action and establishing an ICH Exchange which was a violation of the Competition Act of 2010. CCP warned of stern legal action against all concerned in case the proposed ICH Exchange was set up. www.valuechainmagazine.com 53
BREIFS
Assessment of duties, taxes on import of used vehicles The Federal Board of Revenue (FBR) has amended the Customs General Order No. 14/2005 dated 6th June 2005 through a CGO 13 of 2012 clarifying the method of assessment of duties and taxes on the import of old and used vehicles. According to the new CGO 13 of 2012, the depreciation in the assessable value, for the purpose of assessment shall be allowed on the import of used/second hand motor vehicles at the rate of 2 percent per month for each completed month, calculated from “1st day of January of the year subsequent to the year of manufacture till the date of shipment as per Bill of lading�, subject to a maximum of 50 percent. Under CGO 14/2005, the depreciation in assessable value, for the purpose of assessment was to be allowed on the import of used/second hand motor vehicles at the rate of 2 percent per month for each completed month, calculated from the date of first registration abroad up to the date of entry into Pakistan, subject to a maximum of 50 percent.
SBP tightens rules for ECs network expansion
The State Bank of Pakistan is seeking undertaking of disqualification from Exchange Companies for issuance of new franchise permissions with a view to tightening the rules and regulations for network expansion. According to the proposed undertaking, exchange companies would be liable to compensate for any loss/damages caused to any person or party as consequence of companies relations with the said entity. In this regard, SBP has drafted a new undertaking form for the franchise permission in order to further tighten its control on ECs. This form seeks undertaking of disqualification of director to hold the position in any Exchange Company. As per the new undertaking, Exchange Company will scrutinize the franchise applicant in all respect including his present and past occupation to get acquainted with him and be fully satisfied with the credentials of the applicant. The SBP also issued AML/CFT Guidelines on Risk Based Approach to banks to improve their Risk Based Approach. These Guidelines urged that banks/DFIs may conduct their internal money laundering and financing of terrorism risk assessments (for their customers, products and services transactions channels and geographic areas) with the purpose to develop their own policies and procedures to identify, assess, manage and mitigate related risks on on-going basis. The Guidelines recommended that a matrix which quantifies likelihood and impact /consequences on two dimensions may be developed thereby categorizing risk as low, medium, high or nay appropriate scale. 54 www.valuechainmagazine.com
SBP asks banks to submit new prudential returns
The State Bank of Pakistan has introduced a set of prudential returns and statements for banks to enable it to effectively monitor and assess the risks posed by their relationship with the associated undertakings. The new prudential returns and statements introduced for all banks incorporated in Pakistan include (A) Details of related parties, (B) Details of exposures to and from related parties, (C) Details of related party dealings and transactions (D) Details of equity exposures, (E) Details of capital adequacy of subsidiaries and (F) Latest available financial statements of subsidiaries and associates (as defined in the IAS-28). All banks incorporated in Pakistan have been advised to submit these returns and statements on half yearly basis, effective from half year ending June 30, 2012 and onward. These returns should reach the Banking Surveillance Department of the SBP within 45 days of the close of each half-year ending June 30 and December 31. However, banks may submit the returns for half-year ended June 30, 2012 within 45 days from the date of BSD circular 2, of September 13, 2012.
NCCPL implements CGT regime on stock markets
The Capital Gains Tax (CGT) has finally been implemented by the National Clearing Company of Pakistan Limited (NCCPL) on all the stock exchanges of the country to compute, determine, collect and deposit CGT from disposal of listed securities. CGT computation for trades and transactions executed and settled during the period April 24, 2012 to June 30, 2012 has been disseminated to the market participants to enable them to verify the same accordingly. In accordance with the amendments made in the Income Tax Ordinance 2001 and the Income Tax Rules 2002 relating to CGT by the Federal Board of Revenue (FBR), NCCPL has reportedly developed a CGT system. According to the CEO of NCCPL, Muhammad Luqman, the new CGT would provide great ease of calculation and hassle-free preparation of income tax returns, based on the certificate provided by NCCPL, to investors and they would be exempted from the record maintenance requirement. NCCPL has been mandated such a role in recognition of its expertise in providing various automated business solutions to the capital market of Pakistan.
Tax fraud unearthed in Faisalabad:
Tax authorities in Faisalabad have discovered a number of untraceable wholesalers and suppliers involved in massive misuse of the revamped sales tax zero-rating regime under SRO283 (I) 2011 by carrying out paper transactions to commit tax fraud.
HEALTH & ENVIRONMENT
Sanitation Sector in Sindh – A Roadmap for Reform
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he Chief Minister of the Government of Sindh approved the Sindh Sanitation Strategy in August 2011. Sindh is the first province in Pakistan to have developed a Sanitation Strategy after the 18th Constitutional Amendment and in follow up of the National Sanitation Policy 2006 of the Federal Government. The document was developed through continuous technical support of the Water and Sanitation Program (WSP) of the World Bank which had provided consultants, learning opportunities in other parts of the world to be localized in the Pakistan context and had also conducted a series of consultations with relevant stakeholders in villages, small towns and mega-cities. Recently, the Chief Minister has also set up a ‘Chief Minister’s Fund’ - the Sindh Sanitation Improvement Fund for Strategy implementation, particularly for rural areas. The major challenge is now to transform the strategy document into an ‘action plan’ and help the people of Sindh get improved sanitation and solid waste services at the village, small town and mega-city level.
Sindh Sanitation Strategy – A Framework for Change
The Sindh Sanitation Strategy document identifies certain strategic approaches that would guide the framing of the Province of Sindh sector strategies and development framework and achieving the sector vision and mission statement. The Strategy has looked into promoting viable synergies and linkages among the actors in the sector development, including municipal government agencies, the private sector, NGOs, and others that can lead to the setting up of a sector driven by outcome based evaluation and investment. There has been a focus on access and affordability and developing services based on equity, prioritizing poor and marginalized communities. It has discussed options for employing appropriate technologies that are suitable to user needs, relevant to the actual conditions and comply with technical standards. There is a focus on the need for creating opportunities and incentives for private sector in the development and operation of services while at the same time encouraging community-based services, especially in areas where public and private services are difficult to establish. All this has then been linked with the strategic focus on sector accountability. Sindh’s sanitation sector is divided into larger/smaller cities and villages (secondary towns, Hyderabad and mega city Karachi) and the sanitation strategy document has addressed the issues specific to each as far as possible. In addition, the strategic interventions indicated have been based on the directions set forth by the relevant national policy guidelines and the findings of a comprehensive stakeholder consultation process to bring forth the issues and concerns specific to the province of Sindh. Significant focus is on the critical importance of prioritizing operation & maintenance and improving monitoring &
by Farhan Anwar
evaluation. The sector needs a new vision and approach for sector monitoring and evaluation, incorporating strategic interfaces between the sector functions and processes of monitoring & evaluation for improving quality of service and social accountability of the sector players. Although each city, town or rural settlement is different in terms of size and in the deliverance of certain key functions, sanitation services generally should be developed based on a common set of principles. Services must be comprehensive and continuously accessible to all residents. The entire populace should have sanitation services suited to its needs, allowing all residents to enjoy the benefits of improved sanitation. These are called the principles of Total Sanitation Services and these principles in their entirety can provide a viable strategic framework for province wide sanitation development which has been proposed for implementation in the mega cities, towns and villages of the Sindh province with suitable modifications. An efficient and timely implementation of the strategy recommendations would require both the consistency and enforceability of the relevant legal frameworks. In this regard important areas for review should include sector accountability and placement of effective checks and balances. In addition, while powers are transferred at lower tiers of governance and decision making is decentralized they have to be coupled with the putting in place of viable systems and mechanisms for continued capacity building and strategically productive institutional linkages. This is particularly relevant in the wake of the 18th Amendment that proposes a significant shift in the balance of powers and functions within the three tier governance structure that binds the nation’s sector dynamics. To create the ‘incentive’ for change – monitoring and evaluation outcomes have to be linked with a mechanism for rewarding best practices. The sector has to transform through appropriate policy, administrative and legal interventions into an outcome driven sector where enforceable performance standards and measurable improvements in service delivery and consumer www.valuechainmagazine.com 55
satisfaction determine investments and incentives, and where good performance is rewarded. However, all these changes and driving of the focus of the sector towards outcome and performance based investment will take time. A phased approach for developing the sup- portive policy, administrative and regulatory framework coupled with capacity building of sector professionals has been proposed for implementation with periodic reviews against previously set landmarks.
Implementing the Sindh Sanitation Strategy – A Roadmap
The proposed cycle for ‘sanitation development/implementation’ can broadly be listed as follows: • Preparing Sanitation Strategy Implementation Plan preparing of a sanitation plan for the medium term (say 5 years). The sub level missions, objectives, and development strategies are to be determined here, including programs and their indicative activities. • Preparing Annual Action Plan - action plan is prepared that reviews, consolidates, and prioritizes sanitation development activities identified in the strategic plan and describes detailed information on the activities, parties involved, and estimated budget for each activity. • Plan Synchronization - the sanitation action plans are inserted into the conventional development planning process. Proposed activities will be translated by each municipal agency into their respective draft agency work plans. The phase ends with budget endorsement for the proposed activities. • Implementation - the proposed activities are implemented as planned. Besides the municipal government, private companies, NGOs, and community groups may be involved. During implementation, both the process and the performance will be monitored (benchmarking). • Evaluation - the success or failure of the implementation phase is evaluated and measured and linked with a mechanism for rewarding best practices. The results are used as benchmarks for adjusting the following year’s action plan. 56 www.valuechainmagazine.com
The Strategy emphasizes that sanitation services development should be based on comprehensive and strategic mediumterm sanitation planning that follows the development of the present provincial sanitation strategy. This planning process is important as it may take years for cities and towns in Sindh to meet the all the requirements of total sanitation services. A province-wide sanitation strategic planning process is required to create synergy among municipal agencies and other actors. Once completed, the province wide sanitation strategy can then be translated into recurring annual sanitation action plans. The series of steps that go into the building of the sanitation development framework (Total Sanitation Services Model) would represent a continual development process. Implementation results of one cycle need to be evaluated and used as inputs for adjusting the following year’s action plan.. It is critically important to realize that while ‘Sanitation Mapping’ (Goal A) needs to precede any major investment in infrastructure development and legislation, synergy would have to be created while progressing on the ‘roadmap’ to achieving Goals B and C particularly when implementing the ‘model’ new approaches and methodologies. As such, in the initial stage, the existing infrastructure and services that are found ‘viable’ need to be strengthened and improved. In the subsequent phase the setting up of the ‘enabling’ policy, institutional and regulatory space however, should not be ‘outpaced’ by the perceived ‘urgency’ for developing new infrastructure and services. While, the development of the Sanitation Strategy has been a ‘participatory’ process, it is even more critically essential that the ‘strategy implementation’ process is fully ‘inclusive’ with government, civil society, communities, research and development and academic institutes, all gathering under the ‘umbrella’ provided by the Sanitation Strategy to define their roles and find institutional and development synergies so that duplications are avoided, gaps are plugged and new avenues of mutually beneficial collaboration are both discovered and practiced. A unique and exciting opportunity awaits all to make this ‘process’ – vision and strategy development to implementation and monitoring on ground – a globally acknowledged ‘best practice’.
INFORMATION & TECHNOLOGY
Web Index ranks Pakistan among 61 countries Value Chain Report
T
he Web Index, an online tool designed to measure the internet's economic, political, and social impact across the world, has ranked Pakistan 44th with an overall score of 27.99 among 61 countries gauged according to their use of and impact from the Web. The Web Index is the brainchild of web inventor Sir Tim Berners-Lee and the World Wide Web Foundation. The first Web Index 2012, released by the World Wide Web Foundation -- a Geneva and Washington-A based nonprofit organization formed in 2009- is the world’s first multi- dimensional measure of the Web’s growth, utility and impact on people and nations. It covers 61 developed and developing countries, incorporating indicators that assess the political, economic and social impact of the Web, as well as indicators of Web connectivity and infrastructure. Country
Web Impact Economic Political Social Readiness Communications Institutional The Use Content web Index
Pakistan
27.99
30.37
31.02
26.99
33.56
Sweden topped the global list, with the United States, the United Kingdom, Canada, Finland, Switzerland, New Zealand, Australia, Norway and Ireland being the rest in the list of top 10. The bottom 10, in descending order, were Nepal, Cameroon, Mali, Bangladesh, Namibia, Ethiopia, Benin, Burkina Faso, Zimbabwe and Yemen. India ranked 33rd with the overall score of 46.58. The web is a global conversation. Growing suppression of free speech, both online and offline, is said to be possibly the single biggest challenge to the future of the web. "By shining a light on the barriers to web for everyone, the index is a powerful tool that will empower individuals, government and organizations to improve their societies," Berners-Lee said at an event in London. This year’s Index aims to establish a baseline to help policymakers, international organizations, non-government organizations, investors and interested stakeholders identify some of the areas where investment in the Web could yield subs- tantial positive impacts. The idea, according to Berners-Lee, is to combine quantitative measures with social and political indicators to paint a more complete picture of the web's impact on humanity. "We hope that the Index will deepen and broaden our understanding of the impact of this most powerful tool on humanity," the World Wide Web Foundation said in the study adding "if access to the Web increases dramatically, there will be significant social development and greater political interpretation among the billions of people who currently have no voice,".
22.28
39.27
16.82
31. 07 18. 88
41.33
The communications infrastructure category refers to the following standards: • Accessibility of digital content • Affordability of Web access • Electrification rate • Firm-level technology absorption • Fixed broadband internet monthly subscription as percentage of monthly GDP per capita • Fixed Broadband Internet subscriptions per 100 inhabitants • ICT Price basket - average price for mobile & fixed telephony, as well as fixed broadband internet services (% of average income) • International Bandwidth (Mbits/second) per internet user • Mobile phone subscriptions per 100 population • Percentage of households with computer • Percentage of population covered by a mobile cellular network • Reliability of electricity supply • Secure internet servers per 1 million people The Index measures and ranks: Web Readiness: The Index examines the quality and extent of Communications Infrastructure (facilitating connectivity to the Web) and Institutional Infrastructure (policies regulating Web access and skill and educational levels enabling the full benefit of the Web). Web Use: The Index looks both at Web usage within countries (such as the percentage of individuals who use the Internet) and the content available to these Web users. www.valuechainmagazine.com 57
Country Sweden United States United Kingdom Canada Finland Switzerland New Zealand Australia Norway Ireland
Rank 1 2 3 4 5 6 7 8 9 10
Score 100 97.31 93.83 93.42 91.88 90.49 89.15 88.44 87.76 87.42
The Impact of the Web: The Index uses social, economic and political indicators to evaluate the impact of the Web on these dimensions. This includes measures of social networks, business internet use and e-participation. The Web Index data showed that online access in Pakistan is less affordable than in India, Indonesia and Thailand. The Internet in Pakistan has been available since the early 1990s. According to the International Telecommunications Union there were 133,900 Internet users in 2000 or just 0.1% of the 164 million people in Pakistan. By 2006 use had grown to 12 million users or 7.2% of the population. Telecommunications being one of the fastest growing industries in the country, by 2011 the usage grew up to 31 million users or 17.6% of the total population. With over 20 million internet users in Pakistan, the country now also has 1.79 million broadband users, with an addition of 65,000 in the month of December, 2011 alone. Pakistan does not yet have a third generation (3G) network, which is also considered to be a hindrance for the spread of broadband internet and other wireless services in the country. The average internet connection speed in Pakistan in the fourth quarter of 2011 (Sept-Dec) stood at 741kbps, slightly lower than 763kbps recorded in the third quarter. According to the latest statistics issued by Pakistan Telecommunication Authority (PTA), the number of DSL subscribers has risen to 792,397, while the number of WiMAX internet users has grown to 459,790. The number of HFC users is 37,491 and 7,215 users were recorded as FTTH subscribers in December. 58 www.valuechainmagazine.com
The index said the World Wide Web now has at least one trillion estimated public pages and roughly 3.4 billion users. However, the Web remains a largely untapped resource in much of the world, with only 1 in 3 people using it globally. The Index further states that internet access remains a luxury good in most countries, with broadband connections still costing almost half of monthly income per capita in the 61 countries surveyed. Sir Tim Berners-Lee's World Wide Web Foundation has launched the Web Index, an online tool designed to measure the internet's economic, political, and social impact across the world. The site also assesses the quality of network infrastructure, and combines this with other indicators to rank each country's "state of the web."
WORLD’S ONLINE POPULATION BY REGION
The Web Index compiles country-level data pertaining to three general spheres: web usage, readiness, and human impact. Usage is measured by the percentage of web users within a given country, as well as the content available to them. Web readiness is determined according to a country's communications infrastructure, regulatory climate, and censorship policies. Human impact, meanwhile, is gauged according to a variety of economic, political, and social indicators, including the penetration of social networks and business web usage.
RESEARCH & DEVELOPMENT
Regeneration Power-stem Cell Technology
by Soha Ahmed and Quratulain Afzal
Adult Stem Cell Differentiation?
D
iseases such as ALS, Cancer, Diabetes, Heart Disease, Multiple sclerosis (MS), Parkinson's disease, Spinal Cord Injury and similar others are affecting millions of people around the world underlining the need and urgency for life-saving cures and therapies. Stem cell research and regenerative medicine offer the prospects not only to cure these diseases but also contribute to the reduction in skyrocketing healthcare costs and complications involved in the treatment of these diseases. What are the stem cells? They are biological cells found in all multicellular organisms but differ from other kinds of cells in the body. All stem cells—regardless of their source—have three general properties: they are capable of dividing and renewing themselves for long periods; they are unspecialized; and they can give rise to specialized cell types. In many tissues, they serve as a sort of internal repair system, dividing essentially without limit to replenish other cells as long as the person or animal is still alive. When a stem cell divides, each new cell has the potential either to remain a stem cell or become another type of cell with a more specialized function, such as a muscle cell, a red blood cell, or a brain cell. In some organs, such as the gut and bone marrow, stem cells regularly divide to repair and replace worn out or damaged tissues. In other organs, however, such as the pancreas and the heart, stem cells only divide under special conditions.
Figure 2. Hematopoietic and stromal stem cell differentiation.
Until recently, scientists primarily worked with two kinds of stem cells from animals and humans: embryonic stem cells and non-embryonic "somatic" or "adult" stem cells. Scientists discovered ways to derive embryonic stem cells from early mouse embryos nearly 30 years ago, in 1981. A detailed study of the biology of mouse stem cells led to the discovery, in 1998, of a method to derive stem cells from human embryos and grow them in the laboratory. These cells are called human embryonic stem cells. The embryos used in these studies were created for reproductive purposes through in vitro fertilization procedures. When they were no longer needed for that purpose, they were donated for research with the informed consent of the donor. In 2006, researchers made another breakthrough by identifying conditions that would allow some specialized adult cells to be "reprogrammed" genetically to assume a stem cell-like state. Stem cells are important for living organisms for many reasons. In the 3- to 5-day-old embryo, called a blastocyst, the inner cells give rise to the entire body of the organism, including all of the many specialized cell types and organs such as the heart, lung, skin, sperm, eggs and other tissues. In some adult tissues, such as bone marrow, muscle, and brain, discrete populations of adult stem cells generate replacements for cells that are lost through normal wear and tear, injury, or disease. www.valuechainmagazine.com 59
Stem cells can give rise to specialized cells. When How are embryonic stem cells stimulated to differentiate? unspecialized stem cells give rise to specialized cells, the process is called differentiation. While differentiating, the cell usually goes through several stages, becoming more specialized at each step. Adult stem cells typically generate the cell types of the tissue in which they reside. For example, a blood-forming adult stem cell in the bone marrow normally gives rise to the many types of blood cells. It is generally accepted that a blood-forming cell in the bone marrowwhich is called a hematopoietic stem cellcannot give rise to the cells of a very different tissue, such as nerve cells in the brain. Experiments over the last several years have purported to show that stem cells from one tissue may give rise to cell types of a completely different tissue. This remains an area of great debate within the research community. The controversy demonstrates the challenges of studying adult stem cells and suggests that additional research using adult stem cells is necessary to understand their full potential as future therapies. Using stem cells, whole organs can be generated in labs, solving the problems incurred while looking for a donor. Problems of organ rejection are also solved as the cell is generally taken from the body of the patient himself. Given their unique regenerative abilities, stem cells offer new potentials for treating diseases such as diabetes, and heart disease. However, much work remains to be done in laboratories and clinics to understand how to use these cells for cell-based therapies to treat disease, also referred to as regenerative or reparative medicine. Laboratory studies of stem cells enable scientists to learn about the cells’ essential properties and what makes them different from specialized cell types. Scientists are already using stem cells in the laboratory to screen new drugs and to develop model systems to study normal growth and Figure 1. Directed differentiation of mouse embryonic stem cells. Figure 1. Directed differentiation of mouse embryonic stem cells. identify the causes of birth defects. There are many ways in which human stem cells can be used in Human stem cells could also be used to test new drugs. research and the clinic. Studies of human embryonic stem cells For example, new medications could be tested for safety will yield information about the complex events that occur on differentiated cells generated from human pluripotent during human development. A primary goal of this work is to cell lines. Other kinds of cell lines are already used in this identify how undifferentiated stem cells become the differentiway. Cancer cell lines, for example, are used to screen ated cells that form the tissues and organs. Scientists know that potential anti-tumor drugs. The availability of pluripoturning genes on and off is central to this process. Some of the tent stem cells would allow drug testing in a wider range most serious medical conditions, such as cancer and birth of cell types. However, to screen drugs effectively, the defects, are due to abnormal cell division and differentiation. A conditions must be identical when comparing different more complete understanding of the genetic and molecular drugs. Therefore, scientists will have to be able to controls of these processes may yield information about how precisely control the differentiation of stem cells into the such diseases arise and suggest new strategies for therapy. specific cell type on which drugs will be tested. Current knowledge of the signals controlling differentiation falls Predictably controlling cell proliferation and differentiation short of being able to mimic these conditions precisely requires additional basic research on the molecular and genetic to generate pure populations of differentiated cells for signals that regulate cell division and specialization. While each drug being tested. recent developments with iPS cells suggest some of the specific factors that may be involved, techniques must be devised to Perhaps the most important potential application of human introduce these factors safely into the cells and control the stem cells is the generation of cells and tissues that could be processes that are induced by these factors. used for cell-based therapies. Today, donated organs and 60
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tissues are often used to replace ailing or destroyed tissus, but the need for transplantable tissues and organs far outweighs the available supply. Stem cells, directed to differentiate into specific cell types, offer the possibility of a renewable source of replacement cells and tissues to treat diseases including Alzheimer's diseases, spinal cord injury, stroke, burns, heart disease, diabetes, osteoarthritis, and rheumatoid arthritis. For example, it may become possible to generate healthy heart muscle cells in the laboratory and then transplant those cells into patients with chronic heart disease. Preliminary research on mice and other animals indicates that bone marrow cells, transplanted into a damaged heart, can have beneficial effects. Whether these cells can generate heart muscle cells or stimulate the growth of new blood vessels that repopulate the heart tissue, or help via some other mechanism is actively under investigation. For example, injected cells may accomplish repair by secreting growth factors, rather than actually incorporating into the heart. Promising results from animal studies have served as the basis for a small number of exploratory studies in humans (for discussion, see call-out box, "Can Stem Cells Mend a Broken Heart?"). Other recent studies in culture systems indicate that it may be possible to direct the differentiation of embryonic stem cells or adult bone marrow cells into heart muscle cells. In people who suffer from type 1 diabetes, the cells of the pancreas that normally produce insulin are destroyed by the patient's own immune system. New studies indicate that it may be possible to direct the differentiation of human embryonic stem cells in cell culture to form insulin-
producing cells that eventually could be used in transplantation therapy for persons with diabetes. To realize the promise of novel cell-based therapies for such pervasive and debilitating diseases, scientists must be able to manipulate stem cells so that they possess the necessary characteristics for successful differentiation, transplantation, and engraftment. The following is a list of steps in successful cell-based treatments that scientists will have to learn to control to bring such treatments to the clinic. To be useful for transplant purposes, stem cells must be reproducibly made to: • Proliferate extensively and generate sufficient quantities of tissue. • Differentiate into the desired cell type(s). • Survive in the recipient after transplant. • Integrate into the surrounding tissue after transplant. • Function appropriately for the duration of the recipient's life. • Avoid harming the recipient in any way. Also, to avoid the problem of immune rejection, scientists are experimenting with different research strategies to generate tissues that will not be rejected. To summarize, stem cells offer exciting promise for future therapies, but significant technical hurdles remain that will only be overcome through years of intensive research. Research on stem cells continues to advance knowledge about how an organism develops from a single cell and how healthy cells replace damaged cells in adult organisms. Stem cell research is one of the most fascinating areas of contemporary biology, but, as with many expanding fields of scientific inquiry, research on stem cells raises scientific questions as rapidly as it generates new discoveries.
www.valuechainmagazine.com 61
QUOTES
“So far as the Senkaku islands are concerned, they are the inherent part of our territory, in light of history and international law. It’s very clear.” - Yoshihiko Noda, Prime Minister of Japan, told at a news conference at New York on 26th September defending the Japan’s stance on the disputed islands.
“Balochistan is one of the top priorities of my government and I am taking personal interest in raising the living standards of the Baloch.” – Raja Pervaiz Ashraf, Prime Minister Pakistan, said while talking to Balochistan Chief Minister Nawab Aslam Raisani at PM House Islamabad, 1st October.
“Although growth is slowing down, it is more stable. We will give greater priority to stabilising
“We have oil and the world needs it.” Mahmoud Ahmadinejad, Iranian President, said about the Iran’s response to the EU sanctions in a live television talk show, 5th September.
growth and maintaining the continuity and stability of our policies.” – Wen Jiabao, Chinese Premier, comment on China’s economic growth while addressing the opening session of sixth annual meeting of World Economic Forum at Tianjin, 11th September.
“American intelligence agencies revised our initial assessment to reflect new information indicating that it was a deliberate and organized terrorist attack carried out by extremists.” – James Clapper, Director of National Intelligence, United States said on 28th September while giving his views on the fatal attack on US consulate in Ben Ghazi, Libya, killing four US persons including US Ambassador Christopher Stevens.
62 www.valuechainmagazine.com
"We will do what is good for the country... reforms are not a one-off process." - Manmohan Singh, Prime Minister of India, explaining the economic reforms to further liberalise the country's economy, 28th September.
“When the growth in the euro area drops to zero, you will see export growth from this region drop to zero too.” - Zhu Min, Deputy Managing Director of the International Monetary Fund, on profound impacts of euro zone crisis on the global economy at World Economic Forum meeting at Tianjin, 11th September.
MARKET REVIEW
Stock Market Review September 2012
by Ayub Humayun Ansari
S
eptember was a subdued month for the KSE-100 with the index gaining by just 0.35%MoM to close at 15,445 points. Market was largely range bound during the month in the absence of any major triggers, while initial uncertainty over the collection of CGT mechanism and volatile law and order situation particularly in the aftermath of protests over the anti-Islam film kept investor interest sidelined. On the economic front, key news flow related to the huge current account surplus of US$1.2bn for Aug'12, the first monthly surplus since Mar'12, largely due to inflow of CFS dues and single digit CPI reading for Aug'12 (9.1%YoY), which has further strengthened case for monetary easing going forward. Market performance in numbers: KSE-100 index gained by 0.35%MoM in Sep'12 to close at 15,648 points, just 231 points short of its all-time high level of 15,676 points achieved in Apr'08. However, activity was subdued with average daily trading volumes of 147mn shares, down 6%MoM. Furthermore, the index traded in a very narrow range (400 points, the difference between the high and low during Sep'12). There was a marked slowdown in FIPI inflows, which in Sep'12 stood at just US$12mn compared with an inflow of US$49mn last month. On a sector wise basis, Food Producers and Telecom were the top two gaining sector during the month. Strong performance of sector heavyweight ULEVER buoyed the return of the Food sector, while implementation of ICH from Oct'12 onwards continued to keep the Telecom sector in limelight during Sep'12. Banks (-5.2%MoM) was the major underperforming sector during Sep'12 as margin compression concerns on further monetary easing kept the sector under pressure. Chemicals was the other notable underperformer (-2.2%MoM) as poor outlook for 3Q12 results following sub-par urea sales as well as volatility in margins of major petchem plays (LOTPTA and EPCL) kept the sector under pressure during Sep'12. Top gaining stocks included ULEVER (+14%MoM), NCL (+12%MoM, up on robust outlook for yarn exports) and the Sui twins (SNGP and SSGC). Laggards for the month included MTL (-9%MoM), UBL (-10%MoM) and BAFL (-10%MoM) with banks under pressure due to margin compression concerns. Outlook: The CPI reading for Sep'12 came below line at 8.8%YoY, the lowest level in 33 months, pushing real interest rates further up to 1.7%. With the next monetary policy to be announced on Oct'5'12, we expect another discount rate cut of at least 100bp, which should bring cumulative reduction in discount rate in the current easing cycle to 450bps, and take interest rates into the single digit territory. Other key upcoming checkpoints include i)SC deadline for finalizing of Swiss letter, coincidently also on Oct5'12, ii) outcome of ongoing Pakistan - IMF talks, iii) conversion of index to free float methodology and iv) commencement of the result season from mid-Oct'12 onwards. We believe that monetary easing should support further rerating of the index and highlight PTC, NCL, FATIMA, ENGRO, KPCO and UBL as our top picks.
Major Sector Performance Top Five Gainers Scripts MoM
Top Five Losers Scripts MoM
ULEVER
14%
MTL
-9%
NCL
12%
UBL
-10%
SSGC
9%
BAFL
-10%
SNGP
9%
FFBL
-11%
PTC
7%
ABL
-11%
Sector
MoM
FYTD
CYTD
Food Producers Fixed Line Telecommunication Personal Goods (Textile) Construction and Materials (Cement) Oil and Gas Electricity Chemicals Commercial Banks
6.1% 6.1% 1.9% 1.3% -0.2% -0.6% -2.2% -5.2%
15.9% 39.1% 19.1% 28.2% 13.4% 16.6% -0.3% 0.9%
52.3% 89.0% 56.5% 123.2% 20.7% 39.5% 10.4% 33.7%
Foreign Policy Investment Monthly (Sep 2012) Gross Buy PkR
Gross Sell PkR
6,275,924,349
-5,168,444,680
1,107,479,664
11,657,681
Local Com
34,667,932,420
-34,215,260,803
452,671,616
4,764,964
Bank DFI M. Funds
6,931,979,212 5,817,937,237
-6,819,806,059 -7,494,704,964
112,173,151 -1,676,767,725
1,180,770 -17,650,187
NBFC
1,810,857,837
-1,729,492,898
81,364,939
856,473
52,003,407,949
-51,894,249,716
109,158,233
1,149,034
1,691,935,473
-1,878,015,354
-186,079,880
-1,958,736
FIPI
Local Investor Other Org
Net Buy / Sell PkR $
www.valuechainmagazine.com 63
MARKET REVIEW
Commodity Market September-2012
Open: 96.87 Low: 90.21 Close: 92.03 High: 98.94 Change: - 5.00% Prices for crude oil remained under pressure over the month of September against the sufficient supplies of the commodity during the month. Against a significant fall of 5 % in prices during the month crude oil still managed to yield the best quarterly gain of around 10 % in year 2012. Crude Oil volumes for September 2012 were Rs. 61.5 billion as compared to Rs. 4.7 billion for the corresponding month of year 2011. A significant growth factor of 12.4 times has been observed.
SILVER [USD / troy Oz]
1730
35
1710
34
64 www.valuechainmagazine.com
32
Open: 31.74 Close: 34.65 Change: + 9.17%
27-Sep
24-Sep
21-Sep
18-Sep
15-Sep
31 12-Sep
Open: 1,694.7 Low: 1,694.7 Close: 1,772.1 High: 1,778.3 Change: + 4.57% A steady rise in gold prices was observed since the start of the month. Though gold prices eased on last trading day of September, but the metal
33
3-Sep
27-Sep
24-Sep
21-Sep
18-Sep
15-Sep
12-Sep
9-Sep
6-Sep
3-Sep
1690
SILVER US $/troy Oz
9-Sep
1750
6-Sep
1770
Low: 31.74 High: 34.79
27-Sep
24-Sep
21-Sep
18-Sep
15-Sep
12-Sep
9-Sep
3-Sep 27-Sep
24-Sep
21-Sep
18-Sep
15-Sep
9-Sep
90
6-Sep
3,350
92
Open: 3,450 Low: 3,375 Close: 3,450 High: 3,550 Change: 0.00 % A slow increasing trend was observed in first half of the month for IRRI-6 prices where a sharp decrease in prices in later part of the month balanced out the initial raise. Maximum price was Rs 3,550 per 100 Kg on 20th of September and minimum price way Rs 3,375 per 100 kg on 24th of the month.
PALMOLEIN [Rs. / 37.324 kg] PALM OLEIN RS / 37.324 kg 4,800 4,700 4,600 4,500 4,400 4,300 4,200
27-Sep
1790
3,400
24-Sep
GOLD US $/troy Oz
3,450
94
21-Sep
GOLD [USD / troy Oz]
96
18-Sep
Low: 3,024 High: 3,140
3,500
15-Sep
27-Sep
24-Sep
21-Sep
18-Sep
15-Sep
12-Sep
9-Sep
6-Sep
3-Sep
Open: 3,118 Close: 3,038 Change: - 2.58 %
3,550
98
12-Sep
3,045 3,020
IRRI-6 RS/100 kg 3,600
9-Sep
3,095 3,070
IRRI 6 [Rs. / 100 kg]
6-Sep
3,145 3,120
High industrial demands especially from solar panel industry kept the prices of silver on rising side for the consecutive second month. Silver showed a significant change in prices of 9.17% during the month of September where it posted the best quarterly result of 27 % over the year 2012. Volumes for Silver were Rs.14.58 billion for September 2012. The figure was Rs. 5.7 billion for the corresponding month of last year.
3-Sep
PMEX COMMODITY INDEX
CRUDE OIL US $/Barrel
100
12-Sep
PMEX Commodity INDEX
CRUDE OIL [USD / barrel]
6-Sep
Traded Value Traded Lots (Rs) Sep, 2012 152.4 billion 414,272 Sep, 2011 96.96 billion 378,446 Aug, 2012 129.3 billion 327,271
posted its biggest quarterly gain of around 11 % in more than two years’ as market stimulus and easy monetary policies by central banks around the world boosted bullion's inflation-hedge appeal. Septe- mber's gain of almost 4.75 percent also extended its monthly rise to a fourth consecutive month. During September 2012, the traded volu- mes on the Exchange were Rs.76.3 billion as compared to Rs 86.48 billion for the corresponding month of last year.
3-Sep
C
ommodities witnessed a mixed trend over the month of September, with gold & silver revealing a sharp rise mainly from the start of the month whereas a significant slide was witnessed for crude oil prices. The S&P GSCI Spot Index of raw materials rose 11 percent during the third quarter, rebounding from a 13 percent drop in the previous three months. Twenty of the 24 commodities in the GSCI advanced, led by silver, wheat, gasoline and lead. During the month, PMEX has showed its highest ever volume of Rs.152.4 billion.
by Raede Latif
Open: 4,725 Low: 4,300 Close: 4,300 High: 4,730 Change: - 08.99 % Malaysian palm oil futures tumbled to the lowest in more than two years as investors fretted over rising stocks that may outpace slowing demand and the uncertain global economic outlook. A mirrored downward trend was also observed in domestic markets, with a decline of 8.99 % in palm olein prices during the month of September.
EDUCATION & TRAINING
Money Laundering
M
oney laundering as a crime only attracted interest in the 1980s, essentially within a drug trafficking context. An increasing awareness of the huge profits derived from this criminal activity and concern shown at the massive drug abuse problem in western society shown created the impetus for governments to act against the drug dealers by creating legislation that would deprive them of their illicit gains. Governments also recognized that criminal organizations, through the huge profits they earned from drugs, could contaminate and corrupt the structures of the state at all levels. Money laundering is a global phenomenon, which is a 24hrs a day business. When one financial centre closes business for the day, another one is opening for business. As 1993 UN Report noted: the basic characteristics of the laundering of the proceeds of crime, which to a large extent also mark the operations of organized and transnational crime, are its global nature, the flexibility and adaptability of its operations, the use of the latest technological means and professional assistance, the ingenuity of its operators and the vast resources at their disposal. In addition, a characteristic that should not be overlooked is the constant pursuit of profits and the expansion into new areas of criminal activity. Definition: Money laundering has been defined as “the use of money derived from illegal activity by concealing the identity of the individuals who obtained the money and converting it to assets that appear to have come from a legitimate source.” It can further be simplified by saying that money laundering is a process to make dirty money appear to be clean. Another definition is: ‘Money laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source.’ There are various definitions available which describe the phrase ‘Money Laundering’. Article 1 of the draft European Communities (EC) Directive of March 1990 defines it as: “the conversion or transfer of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from serious crime.” Money Laundering Process: The Financial Crimes Enforcement Network (FinCEN) is the federal agency charged with developing money laundering responses. FinCEN describes the money laundering process as having three stages: (i) Placement (ii) Layering (iii) Integration. In the Placement stage, the form of money is changed or converted, as most modern criminal activity, particularly the drug
by Ferozeali Hussaini
trade, relies upon cash as an initial medium of exchange. Placement mechanisms usually involve either conversion of currencyinto some other form or the physical movement of the currency, e.g. large amount of cash received from drug sales are converted to cashier’s checks or are deposited in multiple transactions into bank accounts. Thus the nomenclature of the money has been changed. Placement of dirty money relies on businesses that deal heavily in cash, though anonymous in that it leaves no paper trail; cash does attract attention when used in certain situations. Large cash transactions are also subject to various reporting requirements, bringing more unwanted attention. Money placement mechanisms are directed at positioning the funds in a bank or financial institution. This represents a trade-off for the launderer. In the layering stage, launderers attempt to hide their tracks on the paper trail. As the name implies, layers of transactions, business entities, fronts, or other concealment mechanisms are imposed between the money and its source. These layers may involve other countries or places where bank secrecy makes following the money trail difficult or impossible. If the placement and layering stages have been successfully completed, the launderer attempts to integrate the laundered funds back into a form the criminal can enjoy. This may entail the use of the funds to further the illegal activity or just carefree spending. Integration mechanisms use the same financial institutions and instruments employed in the other stages, with a slightly different objective. The launderer now needs to make the funds look as if their origin is legitimate, resulting in some really creative schemes. Integration of the "cleaned" money into the economy is accomplished by the launderer making it appear to have been legally earned. By this stage, it is exceedingly difficult to distinguish legal and illegal wealth. Money Laundering Methods: How the basic steps mentioned above are used depends on the available laundering mechanisms and the requirements of the criminal organizations. The table below provides some typical examples. Placement Stage
Layering Stage
Integration Stage
Cash paid into bank (sometimes with staff complicity or mixed with proceeds of legitimate business).
Wire transfers abroad (often using shell companies or funds disguised as proceeds of legitimate business).
False loan repayments or forged invoices used as cover for laundered money.
Cash exported.
Cash deposited in overseas banking system.
Complex web of transfers (both domestic and international) makes tracing original source of funds virtually impossible. Income from property or legitimate business assets appears "clean".
Cash used to buy high Resale of value goods, property goods/assets. or business assets.
International Initiatives: The increasing integration of the world’s financial system, as technology has improved and barriers www.valuechainmagazine.com 65
to the free movement of capital have been reduced, has meant that money launderers can make use of this system to hide their ill-gotten gains. They are able to quickly move their criminally derived cash proceeds between national jurisdictions, complicating the task of tracing and confiscating these assets. Because of this, it has been recognized by many governments that close international co-operation was needed to counter money laundering, and a number of agreements have been reached internationally in order to counter this menace. Interpol: The International Criminal Police Organization (INTERPOL) headquartered in France, functions as a means for exchanging information about crime and criminals among its 168 member nations. Each member state coordinates actively with INTERPOL through a National Central Bureau (NCB), where your request for INTERPOL should be forwarded. INTERPOL has taken an aggressive stance toward money laundering and asset forfeiture, developing model legislation for member states, assisting with the implementation of anti- money laundering programs, and providing training in these area to interested parties. INTERPOL also works with governments and private groups, such as bankers, to put effective money laundering control measures in place. United Nations: The United Nations Narcotics Convention of 1988, also known as Vienna Convention., is one of the most important international treaties in the past 50 years. It not merely requires its signatory states to criminalize the laundering of drug money, and to confiscate it where found, but lays down so far as possible a common wording for the criminal statutes, and a common mode of enforcement. It also requires full and prompt co-operation between the signatory states for the enforcement of these laws anywhere in the world. This agreement in December 1988 commits all countries that ratify it to introduce a comprehensive criminal law against laundering the proceeds of drug trafficking and to introduce measures to identify, trace, and freeze or seize the proceeds of drug trafficking. The UK was one of the first countries to ratify this Convention which has been ratified by over 50 countries. British Commonwealth: In a series of Commonwealth initiatives, member nations have established a Commonwealth Scheme for Mutual Assistance in criminal matters, which directly attacks international money laundering activity. The individual members are pledged to assist each other in criminal investigations to include identifying, locating, and assessing the value of property believed to have been derived or obtained directly or indirectly from, or to have been used in connection with the commission of an offense within the requested country. Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (1990). This Convention was ratified by the UK - the first country to do so - in September 1992. The Convention was intended to extend the provisions of international co-operation against the activities of international organized criminality in general. The drafters of this instrument agreed to extend its obligations beyond the area of drug trafficking. One of the purposes of the Convention is to facilitate international co-operation as regards investigative assistance, search, seizure and confiscation of the proceeds of all types of criminality, especially serious crimes and in particular drug offences, arms dealing, terrorist offences, trafficking in children and young women….. and other offences which generate large profits’. Financial Action Task Force (FATF): The FATF, an international organization formed in July 1989 by the G7, is composed of the seven largest industrialized nations (the USA, Canada, Britain, 66 www.valuechainmagazine.com
Germany, France, Italy and Japan), the European community, and eight other nations. The FATF has analyzed international money laundering and examined a number of alternatives or remedies that the member states could adopt to curb the activity. The first task report, FATF-I, recommended that members do the following: • Criminalize money laundering; • Include other offences besides drug trafficking as money laundering predicates; • Require banks to “know their customers” and to identify people conducting bank transactions; • Adopt currency transaction reporting requirements to track cash transactions; • Develop mechanisms for reporting and tracking suspicious transactions Basle Statement Of Principles: On the financial front, the Committee on Banking Regulation and Supervisory Practices issued the Basle Statement of Principles on the prevention of criminal use of the banking system for the purpose of money laundering in December 1988. The Statement of Principles does not restrict itself to drug-related money laundering but extends to all aspects of laundering through the banking system, i.e. the deposit, transfer and/or concealment of money derived from illicit activities whether robbery, terrorism, fraud or drugs. It seeks to deny the banking system to those involved in money laundering by the application of the following principles: a. Know your customer - banks should make reasonable efforts to determine the customer’s true identity, and have effective procedures for verifying the bona fides of new customers (whether on the asset or liability side of the balance sheet) b. Compliance with laws - bank management should ensure that business is conducted in conformity with high ethical standards, laws and regulations being adhered to and ensuring that a service is not provided where there is good reason to suppose that transactions are associated with laundering activities. c. Co-operation with law enforcement agencies - within any constraints imposed by rules relating to customer confidentiality, banks should co-operate fully with national law enforcement agencies including, where there are reasonable grounds for suspecting money laundering, taking appropriate measures which are consistent with the law. d. Adherence to the Statement - The full text of this section of the Statement is worth quoting in."All banks should formally adopt policies consistent with the principles set out in this Statement and should ensure that all members of their staff concerned, wherever located, are informed of the bank’s policy in this regard. Attention should be given to staff training in matters covered by the Statement. To promote adherence to these principles banks should implement specific procedures for customer identification and for retaining internal records of transactions. Some Measures To Prevent ML: The primary purpose of organized crime is to make profits. Like any business, the purposes of profit are to enjoy it and re-invest it in future activity. For the organized criminal, however, profit close to the source of the crime represents a particular vulnerability and unless the criminal can effectively distance himself or herself from the crime which is the source of the profit they remain susceptible to detection and prosecution. Hence the need to launder their ill profits to make them appear legitimate. The drugs' industry is a highly cash intensive business and "in the case of cocaine and heroin the physical volume of notes received is much larger than the volume of drugs themselves".
In order to ridthemselves of this large burden it is necessary to use the financial services industry and, in particular, deposit- taking institutions. The Financial Action Task Force (FATF) on Money Laundering has identified certain ‘choke’ points in the money laundering process that the launderer finds difficult to avoid and where he is vulnerable to detection. The initial focus has to be on these areas if the war against the launderer is to proceed successfully. The choke points identified are: a. entry of cash into the financial system; b. transfers to and from the financial system; and c. cross-border flows of cash. The entry of cash into the financial system, known as the ‘placement’ stage is where the launderer is most vulnerable to detection. Because of the large amounts of cash involved it is extremely hard to place it into a bank account legitimately. The system of reporting suspicious transactions to the regulatory authorities along with the procedures adopted by deposit-takers are powerful weapons against money launderers. However, cross-border flows of cash is one of the areas mentioned above where the launderer is vulnerable to detection. There are lots of money-laundering techniques that authorities know about and probably countless others that have yet to be uncovered. Here are some of the more popular ones: Electronic payment forms money laundering These new forms of laundering include prepaid virtual gold currencies, ATM cards, mobile phone payments, and Internetbased payment systems. In the case of gold currencies, only certain weights of gold are booked to the accounts of receivers. While the possession of gold reserves changes constantly, the gold in the treasury vault remains untouched. For exchange or purchase of gold currencies, the user opens an account for a virtual gold currency at a system provider. The identification requirements are negligible in comparison to opening a bank account and are often limited only to a request for information such as name, email address and occasionally physical address to which then a “verification code” is sent. Criminals can purchase legitimate prepaid automated teller machine (ATM) cards or smart cards, deposit their dirty money onto the card, and then withdraw the newly-cleaned funds from any ATM anywhere in the world. Mobile phone payments, an especially popular method for making transactions in the Middle East, provide money launderers an opportunity to evade AML bodies. In addition, electronic payment transfers such as Eurobonds, eCash or Digital Cash can conceal the money’s origins and keep owners anonymous even when they reside in a very traceable environment, the internet. Trade-based money laundering and laundering through the real estate sector have both become more popular. For these new forms of laundering, which often take place outside the financial sector, little empirical work has been done on a larger, global scale. So far, no empirical estimates of the amounts of electronic money laundering have been made. Trade based money laundering One of the oldest techniques to evade government scrutiny might become increasingly popular again today, using international trade to move money, undetected, from one country to another,
by means of fake invoicing or falsely declared merchandise. Launderers can, for example, create fake invoices for high amounts and ship merchandise of low value or reverse this procedure as a way of concealing ill-gotten gains. These techniques have recently received attention under the heading of trade based money laundering. In June 2006, the FATF released the first comprehensive report on Trade-Based Money Laundering which stated that “The international trade system is clearly subject to a wide range of risks and vulnerabilities that can be exploited by criminal organizations and terrorist financiers”. Money laundering in the real estate sector: The real estate sector is a prominent entrant for money laundering, particularly for the last phase of money laundering, parking the proceeds of crime permanently. The real estate sector consists of three sub-markets: the business sector (offices, shops, factory halls etc.), the private housing sector (first and second hand houses and apartments etc.), and the public sector (government buildings, prisons etc.). Real estate objects can be used in two ways for criminal purposes. They can be traded in order to hide the origin of illicit funds in a non-transparent and speculative market, or they can be used as a final investment, where criminals park their money in business or houses permanently. Money laundered through these final investments can either be used to create legal income (e.g. rent) or for doing criminal business. Conclusions: Money laundering happens in almost every country in the world, and a single scheme typically involves transferring money through several countries in order to obscure its origins. Both crime and laundering of the proceeds of crime seem to be very flexible. Lack of authenticated data makes it difficult to come to decisive conclusions. Money laundering switches from the traditional banking sector to the less regulated derivative market and to other sectors. Among these, electronic payments such as buying gold via the internet or by loadable phone cards are increasing. Also, money laundering by fake invoicing of exports and imports and other forms of trade based money laundering offer a substitute for launderers. The real estate sector is another lucrative way for launderers to hide their illicit gotten proceeds and expand their criminal business. Measurement and detection of money laundering face new challenges with these new ways of laundering. Eliminating money laundering altogether, like eradicating crime, is impossible since the costs of establishing a zero crime or zero laundering system would be far too high in any form of government system. www.valuechainmagazine.com 67
AGRICULTURE
‘Superfoods' that will eliminate the global hunger in future
by Syed Asif Ali
In future, floods could not destroy the rice field because of revolutionary organic experiments. ‘Super Bitter Gourd’ is being prepared to cure diabetes, Corn maize will grow in all climate conditions, even in drought.
D
uring the last 100 years, we have witnessed revolutionary changes in agriculture sector that have helped cultivation of grain, vegetables and fruits in larger quantities. In the recent past, there has been rapid growth in population. The world population as at present is more than 7 billion which, according to the estimates by global population scientists, would swell to more than 9 billion in 2050. This means the global agriculture will have to double its food production to feed the world's growing and more affluent population around the world. According to the most recent estimate by United Nations Food and Agriculture (FAO), around 925 million representing 13.1 percent of one out of seven persons are the victim of food scarcity and malnutrition. Nearly all of the undernourished people live in developing countries including Pakistan - one of the major producers of food and grain – where more than 24% population is undernourished. The demand for food is rising globally. Triggered by severe droughts in the US and Russia, and weak monsoon rains in Asia, prices for staple food such as corn and wheat have already risen by nearly 50% in international markets since June and have played a part in the popular uprisings throughout the Middle East. Persistent global drought and unfavorable weather condition might adversely impact the good wheat crops in China, India, United States and Pakistan and create a crisis-like situation. Pakistan is the 6th largest producer of wheat and has an important stake in global food market. The situation, therefore, needs to be addressed immediately before it affects the global food chain. Recently, in August 2012, leading water scientist, Malik Falkenmark and his colleagues at the Stockholm International Water Institute (SIWI) have issued one of the strictest warnings about global food supplies, saying that the world's population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages. According to their research, humans derive about 20% of their protein from animal-based products now, but this may have to be dropped to just 5% to feed the extra 2 billion people expected to be alive by 2050. The research further stated that there will not be enough water available for current croplands to produce food for the expected 9 billion population in 2050 if we follow current trends and changes towards diets common in western nations. With 70% of all available water being in agriculture, growing more food to feed an additional 2 billion people by 2050 will place greater pressure on available water and land.
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The situation, therefore, needs to be addressed immediately before it affects the global food chain. To avoid and avert the situation, scientists and biotechnologists are trying hard to prepare “Superfoods” which would consume lesser water and could be cultivated even in drought and adverse climate conditions. These foods would not be affected by global warming and would be of high nutrient value. Though yet in experimental stage, they have been successful through some major critical experiments and would hopefully be available to the masses in the next 5 to 10 years.
1- Flood Resistant Rice:
Thousands of rice farmers in India, China, Pakistan, Bangladesh and Thailand lost their rice plough only because of monsoon floods. Floods destroy more than 0.8 million tonnes of rice each year in Bangladesh and India. This huge amount of destroyed rice is sufficient for 3 crore people. In Pakistan, the third largest rice exporter, the situation is even worse. In the floods of 2010 in Pakistan, more than 2.39 million metric tonnes of rice fields were destroyed. International Rice Research Institute (IRRI), in Philippines, has carried out research on a new kind of rice seed which can tolerate floods effectively without any loss to rice field which can survive the onslaught of the flood water for 2 weeks without undergoing any damage. Filipino farmers, who have been hard hit by the recent rains and floods in the country, are now turning to the Submarino rice (Swarna Sub1) which is unique because it can grow well in wet conditions. Covered with water completely it can die, leaving flooded farmers bereft of
income. According to the IRRI, the Submarino rice variety can survive the floods if they occur before flowering. It also yields well even without the floods. Since its release, Submarino rice has been widely adopted by the farmers cultivating rice across the Philippines because of the efforts by the Department of Agriculture and its agencies, which have been actively promoting Submarino rice to farmers. The effective strategies adopted include involving the farmers in early field trials and seed multiplication efforts across the country alongside information, education, and communication campaigns and materials. The flood resistant rice has special feature of becoming dormant in flood times. After two weeks of flooding, the plant becomes active and grows with the natural speed.
Rice fields destroyed by floods in Philippines The Submarino was made available in the Philippines in 2009 to help rice growing farmers in times of floods and typhoons. Current varieties include the Submarino 1 and Sacobia. It took around 30 years of extreme research to prepare this special breed of rice. Dr. David Meckel of IRRI, is the pioneer of this invention. In 1980, he tried to develop a special breed of rice which could survive the flood. At first, due to lack of progress in biotechnology science at that time, the first type of rice grown was bitter in taste, and thus a waste for farmers. Through continuous research and advancements in biotechnology, Dr. David and his team later succeeded in preparing this rice breed. Swarna-Sub1 incorporates the SUB1 gene into the Indian mega-variety Swarna, making it resilient to flooding for up to 17 days while retaining the desirable traits of the original variety. In Tamil Nadu, Indian state, 3 to 5 lakh hectares of rice fields are destroyed by floods every year. For experimental purposes, to date, 70,000 IRRI mini kits (5kg packets of seeds) have been distributed to more than 100,000 farmers worldAn Indian farmer is standing on his wide. Indian government rice fields cultivated by flood resistant distributed Swarna Sub1 rice breed rice seeds to around 100 farmers who cultivate rice in flood prone conditions and the results are way above their expectations. The farmers in Pakistan would do well if they also experiment this flood-tolerant rice variety in their fields. Field-testing of a rice variety normally takes four to five years before it is released and another two to three years before it reaches the farmers. This new variety of rice seeds could help fight global hunger and will be available to farmers and agriculturists worldwide in next five years.
2- Anti Diabetes Bitter Gourd
According to the latest factsheet (2011) by World Health Organization (WHO), 346 million people worldwide have diabetes - one of the major causes of premature illness and death worldwide. In 2004, an estimated 3.4 million people died from the consequences of high blood sugar. More than 80% of diabetes deaths occur in low - and middle - income countries. WHO projects that deaths due to diabetes will double between 2005 and 2030.According to International Diabetes Federation, 10% of people worldwide will have diabetes by 2030. These are the alarming facts and scientists, pharmaceuticals as well as biotechnologists are striving hard to find out the complete cure of this menace. Modern research found out a simple but effective natural cure for diabetes. According to the research, the solution lies in vegetable bitter gourd which is hated by almost everybody because of its bitter taste. Bitter gourd is a vegetable that is grown in several parts of Asia, East Africa, and South America. In India, Pakistan and China, bitter melon has been used to treat diabetes for centuries. Researchers found that this vegetable is enriched with a special chemical which they call charantin, that has hypoglycaemic effect on normal and diabetic rabbits. Bitter melon has been found to increase insulin sensitivity. In 2007, a study by the Philippine Department of Health determined a daily dose of 100 mg per kilogram of body weight, comparable to 2.5 mg/kg of the anti-diabetes drug glibenclamide taken twice per day. Tablets of bitter melon extract are sold in the Philippines as a food supplement and exported to many countries. Other compounds in bitter melon have been found to activate the AMPK, the protein that regulates glucose uptake (a process which is impaired in diabetics). Prevalence estimates of diabetes, 2025
>20% 14% - 20 % 10% - 14% 8% - 10% 6% - 8% 4% - 6% <4%
Bitter melon also contains a lectin that has insulin-like activity due to its non-protein-specific linking together to insulin receptors. This lectin lowers blood glucose concentrations by acting on peripheral tissues and, similar to insulin's effects in the brain, suppressing appetite. This lectin is likely a major contributor to the hypoglycemic effect that develops after eating bitter melon. Biotechnologists from World Vegetable Centre (WVC) are researching on around 280 types of bitter gourd in their state of the art bio facility. They are cross breeding different varieties of bitter gourds to prepare a “super bitter gourd” to fight diabetes in easy, cheap and natural way. Although, the solution is under research but results are improving each day. Biotechnologists at World Vegetable Centre confirmed that their ‘super bitter gourd’ would be available to masses in next 5 years. www.valuechainmagazine.com 69
to pests and low production after waiting for a long period. To overcome these drawbacks, the scientists have developed a special breed of lentils which gives 35 percent more production and prepares in 55 days. It has some extra fiber and nutrition as compared to the normal lentil seeds. Global organizations fighting world hunger are considering this as a major breakthrough in eliminating hunger in Africa.
4-Monsanto's hybrid corn
Lentils are favorite food ingredient for millions of people worldwide. They are cheap but tasty having nutrient values. It comprises a huge chunk in the daily diet of people living in East, South and North Asian countries including Pakistan, Bangladesh, China, Indonesia, Japan etc. Food experts are suggesting using lentils, specially split yellow lentil (moong ki daal) to eradicate hunger in starving African nations like Somalia and Ethiopia. Lentils, like yellow lentil, can be used as a starch since they are mostly carbohydrate and protein with essentially no fat. They are rich in proteinover 25% of lentils nutritional value is protein. This makes lentils the most popular and inexpensive source for protein, especially for those, who cannot afford meat and for vegetarians. Apart from proteins, lentils have essential amino acids, dietary fiber, folate, other vitamins and minerals. 200 grams of cooked lentils contain 18 grams of protein, 40 grams of carbohydrates, 15 grams of dietary fiber, 4 grams of sugar and 138 grams of water. Calorie content in lentils is around 230 (for 200 grams of cooked lentils). This high nutritional value makes it an ideal food and quick solution for the starving countries in Africa, for instance, in Ethiopia, which has been structurally food deficient since 1980, and where, according to the government, 4.5 million people are in need of emergency food assistance. WFP is currently reaching 3.7 million people in Ethiopia with emergency food assistance, including 240,000 refugees. A further 3.4 million people are receiving assistance through non-emergency programs.
3-Mung Pulse
Thousands of women and infants die in Africa due to iron deficiency. Mung pulse can help them out as it is rich with iron. Despite its nutritional value, majority of the farmers did not cultivate it because this pulse takes 110 days to prepare. Another important drawback was its vulnerability 70 www.valuechainmagazine.com
In the midst of the worst-ever drought in 50 years, two of the world's largest agricultural companies are testing corn that is bred and genetically engineered to withstand low rainfall levels. Monsanto's hybrid corn -- the first-ever hybrid genetically engineered for drought tolerance -- was planted this spring in initial field trials. Sowed amid sufficient rain and optimism for a record-breaking crop yield, the company has encountered a close to worst-case scenario to test its product. AQUAmax corn It was developed using advanced breeding techniques rather than biotechnology last year with five different versions. This year, the company is launching six more with drought tolerance traits combined with pest resistance and other highyielding attributes.
Jeff Schussler, senior research manager in maize stress product development, stated that ‘’we know there's a limit; we know we cannot grow corn without water. It's still corn, and it still needs water. The only thing which makes these seeds unique is their less consumption of water for cultivation and it gives extra production. It's really about managing risk.” About 250 farmers on close to 100,000 acres across the western Great Plains planted this breed of corn and initial results are reportedly better than expectation. AQUAmax corn was observed 8,000 times, with 680 of those considered to be in a stressed environment. AQUAmax yields were 7 percent higher in the stressed environments compared to conventional hybrids. Drought resistance comes through the plant's ability not to lose its hydration through respiration. The hybrids are bred or engineered to reduce the size of the plant's stomata, pores on the surface that regulate the flow of water inside and outside the plant. In addition, genes to improve and increase kernel development or combat pests increase yield despite the lack of available water. Although it is too late for this year’s record drought, but drought-tolerate corn will soon be available in the markets in few months and will be distributed free in the African region as there is severe shortage of water.
Sea cameras to scan the waves for smugglers
SPORTS
Ryder Cup Europeans outclassed the Americans
T
he 39th Ryder Cup, also known as the "Miracle of Medinah", was held on September 28–30, 2012, at the Medinah Country Club in Medinah, Illinois. This was the first time that the Ryder Cup was held in Illinois. Europe went into the match as the defending champions, having defeated the U.S. 14½ points to 13½ in the competition. The team captains were Davis Love III for USA and José María Olazábal for Europe. At the start of the final day's play, the US led by 10–6 and required 4½ points to win. Europe came back by winning eight and tying one of the twelve singles matches, including Martin Kaymer's five-foot putt on the 18th hole to defeat Steve Stricker, taking the score to 14–13 for Europe. The score of 14-13 allowed Europe to retain the cup and make the 12th and last round, featuring Woods and Molinari, moot. In the final singles match, Tiger Woods missed a putt on the final green against Francesco Molinari which halved the final point to 14½–13½, as the European fans had already started celebrating. The victory was Europe's fifth in the last six contests.
Thailand Open 2012
T
hailand Open was held during 22-30 September, at Bangkok. Yen-Hsun Lu of Taiwan and Danai Udomchoke of Thailand upset fourth seeds Eric Butorac of the USA and Paul Hanley of Australia 6-3, 6-4 to win their first ATP World Tour doubles title together at the Thailand Open. The Asian duo earned the crucial break in the eight game of the opening set, as Lu struck a forehand return winner down the line at 40-40. Serving for the set at 5-3, Lu hit a forehand down the line, forcing Hanley into error to take the lead. It was an historic win indeed, especially for Udomchoke as it was his first-ever ATP World Tour title and nothing can be sweeter than winning one on home soil. It was also a fitting celebration of the 10th anniversary of the Thailand Open. The doubles champions received USD30,220 in prize money. In singles final on 30th September, second seed Richard Gasquet outplayed fellow Frenchman and fourth seed Gilles Simon 6-2, 6-1 to win his seventh career title in his Bangkok debut. The title was Gasquet’s first of this year. He was runner-up in Estoril in May and ATP Masters 1000 Toronto in August. “He’s a French player and a friend of mine. So it’s a little bit strange with the title I won. I had tough matches this week, so it’s very good to win it. I made comeback twice in a week,” said Gasquet during his post-match interview.
Richard Gasquet with the trophy
Winners of Double’s event, Yen-Hsun Lu & Danai Udomchoke with their trophies.
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ASTROLOGY
Your Horoscope October 2012
by Dr. Aameer Mian www.astrohope.com
ARIES: Your ruling planet Mars will be residing in 7th
CANCER: Your ruling planet moon on 2nd, 3rd, 30th, and
TAURUS: Your ruling planet Venus will stay in 4th house and you will pay heed to domestic duties. Venus will groom you into a loving personality towards children. You will get respect from your subordinates and green signal on the road of health from 29th to 31stOctober during Venus' stay in 6th house. Saturn in ascendant position will restore pleasant relations with your employers. Jupiter in ascendant position will positively gear you up. Loyalty and honesty will go hand in hand with your determined decisions on 3rd October during Venus-Saturn sextile. You will pay heed towards love affairs which will appear in much sensitive mode and will cause loopholes in your performance during Venus-Neptune opposition on 4th and 5th October. On 9th and 10th October, Pluto -Venus trine will indulge you in group projects in order to get your own personal benefits. Be more polite with others. On 16th and 25th October, Mercury-Venus sextile will throw you in professional contracts by eradicating misunderstandings. You will waste your time in recreational activities; so make practical work plan on 17th and 18th October.
LEO: Your ruling planet Sun's appearance in 3rd house of birth chart will bring relatives and neighbors in focus and travelling will prove to be successful from 1st to 23rd October. Try to beware of jealous ones in domestic life. From 24th to 31st October, Sun will stay in 4th house making property and domestic matters more attractive. In the 3rd house, Saturn’s ascendant position will make you more co-operative and your intimate partner will become lucky. Jupiter’s' stay in 11th house will bring forward sincere friends and your everlasting wishes will be accomplished. On 9th and 10th October, Sun-Jupiter trine will make your expressions hyperbolic but you will enjoy restoration of confidence. On 23rd and 24th October, Sun-Neptune trine will bring health issues in consideration. On 25th and 26th October, Sun –Saturn conjunction will suggest opposition. On 30th and 31st October, Sun-Pluto sextile will win the game of war for you and you will be immune by opposite sex.You will exercise your financially stable powers.
house and make matters of inheritance extraordinary. From 8th to 31st October, Mars in 9th house of birth chart will engage you in spiritual acts resulting in mental peace by performing the welfare work. You may travel to some foreign country for higher education. Saturn in 7th house will be in an ascendant position and make your better half intimately friendly; you will earn respect for you .Your financial crisis will reduce and you will get respectful way of earning under Jupiter's influence in your money house. On 8th and 9th October, Mars-Neptune square will cause complex situations resulting in misunderstandings and bad health. On 8th-29thOctober, Mars-Jupiter opposition will change your life; so be patient.
GEMINI: Your ruling planet Mercury will appear in 5th house from 1st to 5th October which will motivate you in your children’s educational decisions and in lottery. Your officials will co-operate with you and law proceedings will be in your favor from 6th to 9th October. Your plans in foreign investment will grow and your better half will assist you in momentous decisions on 30th and 31st October under Mercury's appearance in 7th house. Jupiter in 12th house will cool down the wrath of jealous enemies .On 1st to 3rd October, Venus' appearance in 3rd house will help you make intimate relations with your siblings and travelling will be beneficial for you. On 5th and 6th October, Mercury - Saturn conjunction will grow mature and positive thoughts in your mind along with satisfactory answers to your queries. Mercury-Neptune trine on 6th and 7th October will make you expressive and will create in you artistic qualities. On 10th and 11th October, Mercury-Pluto sextile will boost your prestige in the circle of your friends due to your convincing conversation. You will be enchanted by opposite sex. From 16th to 25th October, Venus sextile will tie you up with business contracts and love promises by diminishing the level of misunderstandings. On 29th and 30th October, Mercury-Neptune square will show you misunderstandings among rising heads. Do not follow diplomatic policy instead of playing a decisive role.
31st October, in ascendant position, will help you get rid of unnecessary hindrances and impractical friends. Your financial status will improve and domestic atmosphere will calm you down . In the first week, Saturn’s appearance in 4th house in rising position will bless you in property dealings.Jupiter's stay in 12th house will defeat your jealous enemies and help you control your expenses successfully. But on 5th to 31st October, Jupiter’s retrograde position will save you from chances of unpredictable expenses; so make financial planning. Mars will have thoughtful influence on your romantic life. Your subordinates will become more obedient on 8th to 31st October. On 5th to 6th October, Mercury – Saturn conjunction will influence your mind to act in accordance with your parent’s line of thought in mutual affairs and your partner will make desire of shopping outside. On 25th and 26th October, Sun-Saturn conjunction will make love affairs sensitive matters.
VIRGO:
Your ruling planet Mercury from 1st to 5th October will stay in money house which will provide you financial resources and it would prove to be a successful struggle to minimize financial crisis. From 6th to 29th October, Mercury, in 3rd house, will help you solve problems and crisis between you and your family members and you will be provided with the recreational programs. On 30th and 31st October, Mercury in 4th house of birth chart will make you conscious regarding domestic issues. Jupiter in ascendant position will make your career better and develop lovely attitude from parents. Pleasant, talkative changes will occur on 15th and 16th October due to MercurySaturn conjunction. Wide visionary and artistic sense will nourish under the influence of Mercury-Neptune trine. On 10th and 11th October, under Pluto-sextile you will beable to express your thoughts completely. On 16th and 25th October, Mercury-Venus sextile will be effective on domestic and romantic surroundings with increasing factual knowledge and figures during dealings; so you should be preplanned in your mind. On 29th and 30th October, Mercury-Neptune square will prove helpful in rearranging of your thoughts but struggle to avoid instant confusions can cause mental tiredness. www.valuechainmagazine.com 85
LIBRA: Your ruling planet Mercury’s stay in 11th house of birth chart from 1st to 3rd October will enhance love and confidence in friends. From 4th to 28th October the presence of Mercury in 12th house will effect betterment of position regarding expenses and business and it will improve your health. From 29th to 31st October, Mercury in ascendant position will enhance your creative and artistic faculities to make yourself consistent and to improve your personality. Rising Saturn in ascending position will create an environment conducive to sharpen your thoughts through experience. Jupiter in 9th house of birth chart will produce chances for higher education and will give result to those struggling for foreign travel. Business dealings and determinant decisions will be made under the influence of Venus-Jupiter sextile on 3rd and 4th October. Maintenance of physical health and new plans to avoid frustration from friends will give you comfort. On 9th and 10th October, due to Venus-Pluto trine, dealings of specific importance will take place and remain in sharp focus. On 28th and 29th October Mercury-Jupiter opposition will bring swiftness in temperament so you need to tie up yourself with conservative manners. On 30th and 31st October, Sun-Pluto sextile will make you firm in achieving your goal and, with temptation towards opposite sex, will keep you aware decisions of prime importance. SCORPIO: Your ruling planet Mars, from 1st to 7th October, in ascendant position, will give you psychological calmness whereas from 8th to 31st October, the influence of Mars in money house will bring you comfort in financial matters and struggle for increase in income will be fruitful. Your subordinate ruling planet Pluto will impact on your differences with relatives and Jupiter’s ascendant position will make you active in social welfare while Saturn’s appearance in 12th house along with Sun-Mercury will cause ambidextrous modes and planning for unexpected expenses will be beneficial. On 8th and 9th, Mars-Neptune square will require you to be more careful about dealings with friends; Your planning will make things easier. On 9th and 10th October, Venus- Pluto trine will shift your focus on high potential task. On 10th and 11th October, Mercury-Pluto sextile will impact on your selection of words and changes in it will be positively effective; psychological thoughts will be a part of discussion. On 15th and 16th October, Mercury-Uranus trine will influence the importance of personal purposes and its response in the form of changing circumstances. On 28th and 29th October Mercury-Jupiter opposition will bring swiftness in temperament; so you need to tie up yourself with conservative manners. On 30th and 31st October, Sun-Pluto sextile will harden your goal achieving determination along with temptation towards opposite sex ;so keep yourself aware of prime importance decisions! SAGITTARIUS: Your ruling planet Jupiter’s stay in 7th house from 1st to 4th October will bring you comfort in domestic matters. Jupiter’s ascending position in 11th house will strengthen your character due friends’ support. On 9th and 10th October, Sun-Jupiter trine will affect your self-confidence, affections for the achievement of goals will be on risk and through supportive knowledge you will develop artistic sense. On 17th and 18th October, Venus-Jupiter square will prominently effect the selection of ways and partners in public dealings and may cause depression but your better half may help you to withdraw yourself from these spoiled decisions. You need to fight toward your opponents more valiantly to have your rights preserved and this will bring in you positive change in habits during MarsJupiter opposition from 28th to 29th October.
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CAPRICORN: Your ruling planet Jupiter will stay in
ascendant position which will bring you comforts in your dealings. From 6th to 31st October, Jupiter’s stay will also influence your designation in career and employment as well as support from intimate friends. Presence of Jupiter in 6th house of birth chart may influence your vision towards development of relations with higher authorities. On 3rd and 4th October, Venus-Saturn sextile will induce the element of honesty and decision making consistency in your personality and your submissive acts will cast barriers for your work not to be spoiled. On 11th and 12th October, Saturn-Neptune trine will affect those decisions which will prove beneficial to you and your family members in near future. From 25th and 26th of this month you may inspire others; you may get your relations with higher authorities further strengthened.
AQUARIUS: Your ruling planet Saturn will heel your spiritual wounds. On5th October new beginning for private business will be favorable along with the new contracts from 6th to 31st October. Your subordinate ruling planet Uranus’ retrograde position in 3rd house will cause you concern towards relatives; be careful about strangers. On 3rd and 4th October, Venus-Saturn sextile's influence will make you conscious about budget and to provide your sincere service to others. On 5th and 6th of this month, due to Mercury-Saturn conjunction, you will be able to avoid unnecessary habits. Saturn-Neptune trine on 11th and 12th October will provide good opportunity towards creative work for success and to seek justice in decision making matters. On 15th and 16th October, Mars-Uranus trine will divert your thoughts towards accomplishment of personal goal; it will put you to struggle for changes in your circumstances. On 25th October, under the influence of Sun-Saturn conjuncture, you will be provided capabilities to influence others and control problems. PISCES:
Under the influence of your ruling planet Jupiter’s stay in 4th house of birth chart from 1st to 4th October, during the whole month you will be consistent and it will be helpful in domestic matters. Whereas from 5th to 31st October, Jupiter in retrograde position will make you conscious about circumstances and maternal affections will provide spiritual peace. Your subordinate ruling planet Neptune will be in retrograde position during the month; so make decisions wisely to avoid any misshap. On 4th and 5th October, Venus-Mercury opposition will make you perceptive regarding your love affairs.. On 6th and 7th October, Mercury - Neptune trine will complete your tasks along with improved working capabilities. On 8th and 9th October, Mars-Neptune square will expose you to some complex situations with a slight touch of weakness. On 9th and 10th of this month, Sun-Jupiter trine will be a cause of unnecessary problems. On 17th and 18th October Venus-Jupiter square will influence you to organize a ceremony but financial status will cause hindrance and wrong estimated incentives of others will be damaging. On 23rd and 24th October, under the influence of Sun-Neptune trine, your health and expenses will be sharply focused but you may enhance your skills. On 28th and 29th of this month Mars-Jupiter opposition will effect psychological problems along with mistake-making due to increased self-confidence, so be careful. On 29th and 30th October, under the influence of Mercury- Neptune square your standpoints will be hanging on fire ; so you will need a sincere friend.
TREND
Apple iPhone 5 Launched
O
n 12th September at San Francisco, one of the world’s biggest smartphone manufacturers, Apple launched its new iPhone5, which is lighter, thinner yet more powerful version of its iconic mobile device. It works on the faster mobile Internet networks i.e. LTE. It is 20 percent lighter than the iPhone 4S and weighs 112 grams. New A6 Processor doubles the speed for loading web graphics. The iPhone5 launches into a more challenging field of competitors than ever. Recently, all major smartphone makers had launched their smartphones. Samsung has been betting big with its Galaxy S III, which is a successor to its popular Galaxy S II smartphone. On the other hand, HTC has introduced HTC One X. Sony and Nokia too have warmed up to the smartphone race with Sony Xperia T and Nokia Lumia 920. Nokia Lumia 920 is the first Nokia smartphone to run on Windows Phone 8 and offer wireless charging. Apple enjoys strong customer loyalty, but has lost global market share to the fastestgrowing segment of smartphones powered by Google’s Android operating system. Smartphones powered by Android software continued to dominate the US market during the past months. However, according to internet analytics company ComScore’s report, Apple’s iOS is the second most popular platform with 33.4 percent market share. According to ComScore, Samsung mobile phones remained most popular in the United States capturing 25.6 percent of the market. Third-place Apple gained ground to claim 16.3 percent as of the end of July.y. Apple is engaged in litigation with Samsung over patent infringement and is seeking to ban US sales of some Samsung devices after a major court victory in California in August. The launching of iPhone5 highlighted Apple’s growing rivalry with Google, the maker of the Android operating system that powers about half the world’s smartphones. Apple introduced its own mapping software to replace Google and also removed Google’s online video service, YouTube, from the batch of applications preinstalled on the iPhone5. Tech experts are predicting that Samsung Electronics Co. will take legal action to bring the two
by Taimoor Akhtar Bhatti
top smartphone makers' global patent war to a new stage. Speculation is running high that the South Korean firm may use its bigger share of LTE patents and a wider array of LTE phones to counter Apple’s patent infringement claims. Samsung was the No. 1 LTE standard patent holder at the European Telecommunications Standards Institute (ETSI), with 819 patents, or 12.7 percent of the total, according to a study by the Korean Intellectual Property Office (KIPO). Apple says it sold a staggering 5 million iPhones in the device's first weekend in stores. That's faster than any iPhone has sold before. Major issues which are being experienced by the users are short battery life, leak of light from the top corner of the screen, strange voices inside the voice (like a loose screw), absence of ‘google maps’ and similar other software and apps related issue in apple’s new operating system ‘iO6’. Comparison of iPhone5 with other latest smartphones Samsung Galaxy SIII
HTC One X
Sony Xperia T
Nokia Lumia 920
Apple iPhone 5
Dimensions
136.6 x 70.6 x 8.6 mm
134.4 x 69.9 x 8.9mm
129.4 x 67.3 x 9.4 mm
130.3 x 70.8 x 10.7mm
123.8 x 58.6 x 7.6 mm
Weight
133 grams
130 grams
139 grams
185 grams
112 grams
RAM
1GB
1GB
1GB
1GB
1GB
Internal Storage
16/32/64 GB
32GB
16GB
32GB
16/32/64GB
Expandable Storage
Yes
No
Yes
No
No
Processor
1.4GHz 1.5GHz NVIDIA Samsung Tegra 3 Exynos 4 Quad processor processor
1.5GHz dualcore Qualcomm Snapdragon S4
1.5GHz Apple A6 dualcore Qualcomm Snapdragon S4
Operating System
Android 4.0
Android 4.0
Windows Phone 8
Display
4.8 inches, 720 4.7 inches 720 4.6 inches, 720 4.5 inches, 720 4.0 inches, 640 x 1280 pixels x1136 pixels x 1280 pixels x 1280 pixels x 1280 pixels
Android 4.0
iOS 6
Connectivity Wi-Fi, Bluetooth v4.0, NFC, MicroUSB, GPS
Wi-Fi, Bluetooth v4.0, NFC, MicroUSB, GPS
Wifi, Bluetooth Wi-Fi, Bluetooth Wi-Fi, v3.1, NFC Bluetooth v3.1, NFC, Micro-USB, GPS v4.0, GPS Micro-USB, GPS
Primary Camera
8-megapixels with auto focus & LED flash
8-megapixels with auto focus & LED flash
13-megapixels with auto focus & LED flash
8-megapixels camera with auto-focus & LED flash
8-megapixels with auto-focus & LED flash
Secondary Camera
1.9megapixels
1.3megapixels
1.3megapixels
1.3megapixels
1.2megapixels
Battery
2100 mAh
1800mAh
1850 mAh
2000 mAh
8 hours talktime, 225 hours standby
www.valuechainmagazine.com 87
ENTERTAINMENT Compiled by Ali Siddiqui Dadi
Review
End of Watch
Box Office Sep 2012 in US $ Ranks 01 02 03 04 05 06 07 08 09 10
Movies
Weekend
Hotel Transylvania Looper End of Watch Trouble with the Curve House at the End of The Street Pitch Perfect Finding Nemo Resident Evil: Retribution The Master Won't Back Down
$43.0M $21.2M $8.0M $7.5M $7.1M $5.1M $4.0M $3.0M $2.7M $2.7M
Gross
Weeks
$43.0M $21.2M $26.2M $23.7M $22.2M $5.2M $36.5M $38.7M $9.6M 2.7M
New New 1 3 2 New 4 5 7 New
Hotel Transylvania
Trouble with the Curve
Directed by
Genndy Tartakovsky
Samurai Jack's Genndy Tartakovsky directed this animated tale concerning a hotel where monsters such as Dracula (voice of Adam Sandler), the Invisible Man (David Spade), Frankenstein (Kevin James), and his bride (Fran Drescher), along with a host of others, head to relax from a world full of humans. When a young man (Andy Samberg) stumbles onto the resort and falls for Drac's teenage daughter Mavis (Selena Gomez), comedy high jinks ensue. Cee Lo Green, Steve Buscemi, and Molly Shannon also lend their voices. ~ Jeremy Wheeler, Rovi
Looper
Directed by
David Ayer
Directed by
Robert Lorenz
House at the End of The Street
Directed by
Rian Johnson
In 2047, time travel will be invented - but it will be illegal and only available on the black market. When the mob wants to get rid of someone, they will send their target 30 years into the past where an assassin known as a "looper" quickly carries out the hit, and disposes of the body. Joe Simmons (Gordon-Levitt) is one of the most respected loopers around. This twisting sci-fi mindbender are Bruce Willis and Joseph Gordon-Levitt, directed by Rian Johnson. Directed by
Mark Tonderai
88 www.valuechainmagazine.com
ENTERTAINMENT
Heroine
Review Box Office Earning Sep 2012 in Ind Rs. Ranks
Directed by
Madhur Bhandarkar
Barfi
01 02 03 04 05 06 07 08 09 10
Movies OMG Oh My God! Kamaal Dhamaal Malamaal Heroine Barfi Raaz 3 Joker Shirin Farhad Ki toh Nikal Padi Ek Tha Tiger Gangs of Wasseypur 2 Jism 2
OMG Oh My God
Directed by
Anurag Basu
Weekend
Gross
16.0 cr 16.0 cr 4.6 cr 4.6 cr 25.0 cr 36.5 cr 34.6 cr 58.6 cr 55 cr 35.0 cr 15.0 cr 20.0 cr 9.1 cr 6.3 cr 116.0 cr 135.0 cr 15.2 cr 18.5 cr 20.0 cr 27.5 cr
Weeks New New 2 3 4 5 6 7 8 9
Directed by
Umesh Shukla
The movie is based on the life of Kanjibhai (Paresh Rawal), an antique shopkeeper. When an earthquake destroys his antique store, he begins to disbelieve in God. The film revolves around his journey at taking down God which he is unable to do, but clearly doesn't realize, and soon begins to fight all the priests of the city, which starts mayhem until Lord Krishna (Akshay Kumar) pays Kanji an unexpected visit.
Raaz 3 Kamaal Dhamaal Malamaal
Directed by
Vikram Bhatt
Directed by
Priyadarshan
Bakri Johny!! That’s the insinuating cry of every man, woman and child in this village when they see Johny (Shreyas). Afraid of everything and everyone, Johny is one terrified soul. Born into the household of David (Om Puri), a local farmer and being the only son, Johny does what he’s best at to help his ailing father. Nothing! Other than buying lottery tickets every week. The only thing going in his life, is his love for Maria (Madhhurima) the daughter of the village’s biggest gunda and sworn enemy of David. Peter (Paresh Rawal). Armed with two herculean son’s, Peter goes to all ends to make sure his daughter and Johny never marry, until one day, hope comes in the form of a silent, strong but very hungry man, Sam (Nana Patekar). What happens next is a complete dhamaal of fun, action and drama resulting in one very Kamaal Dhamaal Malamaal! www.valuechainmagazine.com 89
ENTERTAINMENT
Hall of Fame Top Ten UK Songs Ranks
Song
Singers
Last Week Total Weeks
01
Gangnam style
PSY
3
6
02
Hall of Fame
Script ft. Will.I.Am
1
4
03
I Cry
Flo Rida
9
4
04
We Are Never Ever Getting Back Together
Taylor Swift
6
6
05
Let Me Love You(until You Learn To Love)
Ne-Yo
2
2
06
Say Nothing
Example
5
3
07
Some Nights
Fun
14
11
08
She Wolf (Falling To Pieces)
David Guetta Ft Sia
11
3
09
Turn Around
Conor Maynard Ft Ne-Yo
18
5
10
You Bring Me Joy
Amelia Lily
8
3
Singer The Script Ft Will.I.Am
I Cry
PSY "Gangnam Style" is a song by South Korean rapper PSY. The song was released on July 15, 2012, as the lead single of his sixth studio album PSY's Best 6th Part 1. "Gangnam Style" debuted at number one on the Gaon Chart, the national record chart of South Korea. The music video has been viewed over 336 million times on YouTube as of September 30, 2012, making it the site's most watched Korean pop (K-pop) video.
Ishq Wala Love
Top Ten Music Chart Buster Ranks
Song
Movies
Singers
01
The Disco Song
Student Of The Year
02
Ishq Wala Love
Student Of The Year
03
Saiyaara
Ek Tha Tiger
04
Aashiyan
Barfi
Benny Dayal, Sunidhi Chauhan, Nazia Hassan Shekhar Ravjiani, Salim Merchant, Neeti Mohan Mohit Chauhan, Tarannum Malik Nikhil Paul George, Shreya Ghoshal
05
English Vinglish
English Vinglish
06
Halkat Jawani
Heroine
07
Main Kya Karoon
Barfi
08
Main Sharabi
Cocktail
09
Mashallah
Ek Tha Tiger
10
Ala Barfi
Barfi
Singer Flo Rida
Last Week Total Weeks 1
3
10
2
2
5
4
3
Amit Trivedi
11
2
Sunidhi Chauhan
2
8
Nikhil Paul George Imran Aziz Mian, Yo Yo Honey Singh Wajid, Shreya Ghoshal
5
5
6
10
5
8
Mohit Chauhan
9
5
Singer Shekhar Ravjiani, Salim Merchant, Neeti Mohan
Saiyaara
The Disco Song The soundtrack of Alia Bhatt, Siddharth Malhotra and Varun Dhawan in movie “Student Of The Year” starts with The disco song, a take on the 80’s hit ‘Disco Deewane’. The idea obviously is to bring the groovy song back on the dance floor and get the movie an easy runaway hit track.
90 www.valuechainmagazine.com
Singer Mohit Chauhan, Tarannum Malik
[Our Delivery Promise] AWAN TRADING CO (PVT.) LTD.
Awan Trading Co. is Pakistan based Coal trading entity which was incorporated in the year 2002. The company started its operation as an importing company and for the last two years it has also started supplying domestic coal (Pakistan coal). So far the company has imported and supplied 5 million tons of coal, from South Africa and Indonesia, to the cement factories. This opportunity of supplying coal to cement factories was created due to their (Cement factories) shift from furnace oil to coal as the main energy fuel. Since then the company has been sincerely committed in its mission of supplying coal to factories as a source of energy. What you sell is important! So we source our Coal from best suppliers around the world. Developing longterm relationships has been the hallmark of our company. Our promise that “we deliver, no matter what the situation” has earned us, the confidence of our buyers. The success of our trading can be gauged from the fact that we are now importing 21 vessels (1 million ton) of coal in a year which as resulted in 30% market-share for Awan Trading Co and hopefully the share will increase in the coming years. supplying coal to factories as a source of energy. What you sell is important! So we source our Coal from best suppliers around the world. Developing longterm relationships has been the hallmark of our company. Our promise that “we deliver, no matter what the situation” has earned us, the confidence of our buyers.
The success of our trading can be gauged from the fact that we are now importing 21 vessels (1 million ton) of coal in a year which as resulted in 30% market-share for Awan Trading Co and hopefully the share will increase in the coming years.
Awan Trading Co (Pvt.) Ltd. D-28/11, Block 1, Clifton , Karachi Pakistan Tel: 0092-21-3581-0966, 3581-967 | Fax: 0092-21-3581-0968 | Cell: 0092-333-2545511 Email: import@awantrading.com.pk | Info@awantrading.com.pk