Re: Pakistan: A most surprising success story - Newsweek (Merged)
Foreign investment continues to flood into Pakistan. :k:
Singapore’s Meinhardt to Invest US$200 MLN in Pakistan
KARACHI, May 23 Asia Pulse - Singapore-based company Meinhardt would bring foreign direct investment worth US$200 million into the country in the next two years by commencing its construction project in Karachi, said John Lim Hui Min, Business Development Director of Meinhardt Singapore. “Our state-of-the-art and 6-star Creek Marina residential project would cost 200 million US dollars,” John Lim said, adding that his company is also providing technical and engineering consultancy to different local construction companies that has started some projects in Lahore, Islamabad and Karachi.
John Lim said that his company had taken the first independent initiative and after the completion of the project, the company could consider building apartments or bungalows for middle-class people in Pakistan. “It is too early to comment on any future project,” said Jerry Mak, General Manager, Creek Marina, adding that his company could build any small or large project but would strictly follow international standards. John Lim said that Meinhardt had come to Pakistan for the first time with such a big project, attracted by the seafront location at DHA Phase VIII. He highlighted that the Creek Marina project is being undertaken keeping in view the best level of security for the clients besides other issues as well. “Since Pakistan had recently undergone the worst disaster in its history (8/10 earthquake), the clients were conscious before making a booking and we have been telling them that the Creek Marina project would provide them earthquake safety besides other facilities,” he said.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Investment, along with more budgetary allocation for development and education are the keys to Pakistan's future success. Yet sadly with such a hostile neighbour next door, most of the tax money is [justifiably] used to finance the massive arms and weaponry. We're already headed in the right direction, with the constant increases in outlays for education and development projects over the years and a reduction in the arms spending. We'll get eventually to the point where all this development and growth can not be derailed, and will be a proof of success ourselves rather than some silly media speculation financed by India :)
Re: Pakistan: A most surprising success story - Newsweek (Merged)
FDI crosses $3 billion in 10 months
KARACHI: Foreign direct investment in Pakistan reached $3.02 billion in the first 10 months of the 2005-06 fiscal, led by inflows into the communications and energy industries and the financial sector, official figures show.
Data released by State Bank of Pakistan on Tuesday showed FDI for the July-April period rose from $891.5 million in the same period of the 2004-05 (July-June) fiscal year.
The communications sector attracted the most foreign investment in the period, $1.7 billion, followed by $310 million invested in the power industry, $290 million in the financial sector and $243 million in oil and gas exploration.
The sharp rise in investment in communications has mainly stemmed from the sale of a 26 per cent stake in Pakistan Telecommunication Company Ltd to Dubai-based Emirates Telecommunications (Etislat).
**The United Arab Emirates led the list of foreign investors with investment of $1.285 billion in the first ten months of the year, followed by the United States with $419 million and Saudi Arabia with $274 million.
**
Inflows from foreign portfolio investment during the period were recorded at $356 million, up from $135.5 million in the first ten months of 2004-05.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Thai firm to invest in energy sector
BANGKOK: PTT PCL, Thailand’s top energy firm, said on Tuesday it had agreed with Dawood Hercules Chemicals to look for opportunities to invest jointly in Pakistan’s energy sector. Dawood Group has a strong presence in the chemical, textile, insurance and information technology in Pakistan, the Thai firm said in a statement. PTT has said it plans to invest about 239 billion baht ($6.2 billion) over the next five years, mostly in the natural gas business.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Pakistan To Exceed This Fiscal Year Tax Revenue Target
KARACHI -(Dow Jones)- Pakistan’s booming economy is likely to lift tax revenues to a record in the current fiscal year but the country needs to widen the tax base to maintain the pace of growth, a top government official said Tuesday. “I expect full-year tax collection will be around PKR700 billion,” Abdullah Yusuf, chairman of the Central Board of Revenue, told Dow Jones Newswires in a telephone interview from Islamabad. The government is targeting tax revenues of PKR690 billion for the current fiscal year ending June 30. Overall tax revenue rose around 19% to PKR536.4 billion in the first 10 months of the fiscal year, Yusuf said. He said tax revenues have grown an average 13% to 14% in the past few years and the trend is likely to continue. "If we take PKR700 billion as the base, then we should be looking at PKR800 billion plus as the (revenue collection) target for next (fiscal) year, he added. In the last fiscal year ended June 30, 2005, the total tax revenue collection was PKR591.1 billion. “The main factor is the economy,” Yusuf said. “The economy has shown buoyancy in recent years and that has a positive impact on our tax collection,” he said.
Pakistan’s economy grew 8.4% - the fastest rate in two decades - in the year ended June 30, 2005. The previous year it grew 6.4%. In the current fiscal year, the gross domestic product growth is likely to be in the range of 6.5% to 7.0%. Yusuf said the challenge for the government is to maintain the high growth momentum in the medium to long term. “For that we have to ensure that we continue to attract investments…this will help expand the economy and tax revenues,” he said. Yusuf said despite the recent growth in tax revenues, the country’s tax base, or the number of registered tax payers, remains thin. “Although the tax base grew by about 20% last year and we expect similar growth this year, we still have a narrow tax base,” he said. “It’s a handicap…it’s a historic problem,” he added. Just about 1.30 million to 1.35 million people pay tax in the country of 150 million. Yusuf said the CBR is taking some steps to draw more people into the tax net. “It is very critical. We have to do it because only then will we be able to bring our tax-to-GDP ratio to a reasonable level,” he said. Pakistan’s current tax-to-GDP ratio is between 13.5% and 14%, lower than the average 18% in the region. “We have to increase the ratio to 17% to 18%,” Yusuf said. He said the government introduced a self-assessment scheme in 2003, shifting responsibility to the individual. “The ball is now in the court of tax payers or potential tax payers with the introduction of the self-assessment scheme. They have to come forward and pay taxes,” he said. The CBR is also making efforts to motivate potential tax payers and to promote a tax culture in the country, he added. “We also have to improve our (tax collection) system to take care of delinquent tax payers,” he added. Yusuf said the CBR is working to automate its various departments and to create a database of existing and potential tax payers. It is planning to set up 13 to 14 regional tax centers by the end of next fiscal year in major cities so that three taxes - income tax, sales tax, and excise duty - can be paid in one place, he said.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Foreign exchange reserves continue to rise.
Forex reserves rise by $106m
KARACHI: Foreign exchange reserves of the country increased by $105.8 million to $13.016 billion in the week ending April 29, 2006, said a statement issued by the State Bank of Pakistan (SBP) Thursday. During the week, reserves held by the SBP went up by $96 million to $10.645 billion this week compared to $10.549 billion a week ago. During the same period, net foreign reserves held by the banks (other than SBP) increased by $9.7 million to $2.371 billion from $2.361 billion
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Some more interesting news about Investment
Privatisation boosts foreign investment
By Sultan Ahmed
PAKISTANI officials rejoice over the fact that direct foreign investment during the first ten months of this financial year has exceeded $3 billion as they had projected.
The bulk of that investment has come from the neighbouring Gulf States, the UAE and Saudi Arabia in particular and a major part of which has gone into the telecommunication sector. Far more investment is expected in this industry after Warid, a UAE company, has won over four million customers within its first year operations.
All that has encouraged the prime minister to promise an investor-friendly budget next month. And the Board of Investment (BoI) in its budget proposals has called for a reduction in the various corporate taxes and to cut withholding tax to three per cent. The BoI says that a great deal of money gets accumulated with the CBR and getting refunds take a long time, which creates liquidity problems for the companies.
The Securities and Exchange Commission has also come up with a useful guide for investment.
The BoI says that advanced tax should be abolished. It urges that multiplicity of taxes should be avoided and that if all kinds of taxes are taken in to consideration, the total tax rate on companies come to a high 42 per cent.
The board wants the tax and dividend to be reduced from ten to five per cent and the initial depreciation allowance to be raised to 90 per cent for new companies. It wants these proposals to be considered if the grant of tax holiday is not possible.
At a time when Pakistan is seeking more and more foreign investment, foreign missions are coming here seeking Pakistani investment in their countries, particularly in the real estate.
Delegations have been here seeking Pakistani investment in the Dubai real estate, in the new buildings and apartment blocks springing up there. The latest delegation to come is from the UK to sell prime land to Pakistanis who own quite a bit of property there.
And the State Bank of Pakistan has warned investors not to patronise phoney ventures abroad. Earlier, such warnings had been given by Prime Minister Shaukat Aziz.
But foreign companies from Singapore have come here and are developing real estate and offer swanky apartments by the seacoast with Askari Bank funding the buyers. It is getting to be a two-way investment now.
Much of the investment from the Gulf has gone into the telecom sector followed by the power sector (KESC) and Pakistan Steel. The investment in the telecom sector alone has been to the extent $1.7 billion.
We have now to see who gets the PSO, the Pakistan Petroleum, the Sui Northern Gas company and Sui Southern Gas company. If any of them gets sold before the end of this fiscal year, the over all earnings from privatisation will take a big jump.
These are not new employment creating and manufacturing enterprises. But they have certainly added to the employment and productive capacity of the industry.
What matters far more now is how much more they will invest to expand their enterprises, which cry for such expansion. The KESC and the PTCL and other mobile phone companies have indicated they propose to invest large additional sums and the new Saudi owners of Pakistan Steel have said they propose to invest $200 million more in the industry.
In fact, some of those enterprises like the KESC have to make the additional investment very quick and make the investment large enough to render the utility truly useful and satisfy the customers instead of outraging them with frequent load-shedding or breakdowns.
The fact is that the cost of doing business is still very high, not only the foreign investors and Pakistani businessmen say that, but also the World Bank and the Asian Development Bank. Multiplicity of taxes is one of the major problems. Corruption is a very significant deterrent.
Smuggling is another factor, which the manufacturers complain against. The red tape delays are galore and provoke the investors and feeble administration of justice and the failure of the system to execute the decrees passed by the courts is another deterrent.
Law and order continues to be a major problem. The police is often the offender instead of the protector and are often avoided by the victims. Above all that is the gross inadequacy of the infrastructure, specially power and water. The repeated failure of the KESC in recent times and the violence it provokes provides the best or the worst example.
Normally, trade should lead to more foreign investment. How much progress have we made in solving problems of trade with our Muslim neighbours?
After nearly 60 years, Pakistan and Iran have again agreed to remove trade barriers and achieve a $2 billion bilateral trade. This is how slow we have been in solving our trade problems or how problems solved reoccur again.
And for all the big talk about the excellence of Gwadar Port and how it will be made a well-equipped world port, we are now told that Gwadar port lacks modern equipment. It is also seen as a destination for foreign investment.
Because of such inadequacies, the ministries of commerce and textiles have recommended to the budget-makers to treat locally made machinery as exportable goods tax-free. But the government has invariably preferred to refund the duty after much delays rather than make the exports of machinery tax-free.
At the same time, speakers at a seminar in Washington say that Pakistan is now facing major economic risks. The economic policies of the present government make him very nervous, said Shahid Javed Burki, a former finance minister of Pakistan. It was also said that Pakistan had missed many of the opportunities offered by 9/11 while availing of a few of them. This is not the ideal climate for large-scale foreign investment when law and order is a significant deterrent.
With a large trade and balance of payments deficits, workers remittances and rising foreign investment totalling nearly $8-9 billion by the end of the year is financing the annual oil bill estimated at $5.5 billion.
But there is more than money in foreign direct investment; there is some more employment and technology transfer. And we need all of that instead of merely change of ownership of the public sector assets.
Direct foreign investment on new projects is always far better than the investment, which comes through privatisation. But in the kind of circumstances we are, we have to accept the Gulf capital for privatisation as it comes along.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Islamabad to have FTTH facility By Naveed Ahmad
ISLAMABAD: In harmony with the ongoing boom in the country’s telecom sector, Islamabad is all set to become South Asia’s first city to have fiber-to-the-home (FTTH) solution to deliver a full range of high bandwidth triple play (voice, video and data) services.
FTTH would make customers’ life simple and offer a one-stop shop for all telecommunication needs. The unlimited capacity of fiber allows super high quality voice, video, data and Internet services, plus applications like home security, home automation, and videoconferencing. The state of the art fiber optic technology will provide customers with possible great new advantages, such as distance learning, teleworking, and telemedicine. The scalability, security, reduced maintenance and extended life of FTTH makes it the most “future proof” of all communications infrastructures.
The service would provide the customers access to the most advanced services available in digital television, high-speed Internet, and local and long-distance phone service. All three services would be delivered over single optical fiber cable. As a result, the quality, variety, speed, reliability, and value will be unmatched by any other service. In telecom world, giants like Verizon USA, NTT Japan and KT Korea are deploying FTTH whereas NTL, a company of purely Pakistani origin, has taken on this challenging task.
Naya Tel, an alternate service provider, which has deployed fiber optic in most parts of Islamabad, has acquired Alcatel’s fully standards compliant, all optical solution called Alcatel 7340 fiber-to-the-user (FTTU), along with the Alcatel 5020 softswitch in a bid to achieve the scalability for cost-effective support for an expanding network.
Developing this kind of infrastructure is critical for Pakistan to take a quantum leap in technological advancement and to become a recognized and competitive force in the global economy.
In an emerging city like Islamabad, FTTH will play a vital role in the development of the local economy. In the information age of 21st century, cities need technology like FTTH to continue to prosper. “In the 19th century, a town’s future depended on the railroad coming there. In the 21st century, it’s FTTH,” said Wahaj-us-Siraj, Naya Tel CEO while talking to The News.
FTTH will position Islamabad to better compete in the global economy and can provide businesses in the city with a global reach second to none. It can also make Islamabad attractive to new businesses and give existing ones a boost.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Privatisation boosts foreign investment
By Sultan Ahmed
PAKISTANI officials rejoice over the fact that direct foreign investment during the first ten months of this financial year has exceeded $3 billion as they had projected.
The bulk of that investment has come from the neighbouring Gulf States, the UAE and Saudi Arabia in particular and a major part of which has gone into the telecommunication sector. Far more investment is expected in this industry after Warid, a UAE company, has won over four million customers within its first year operations.
All that has encouraged the prime minister to promise an investor-friendly budget next month. And the Board of Investment (BoI) in its budget proposals has called for a reduction in the various corporate taxes and to cut withholding tax to three per cent. The BoI says that a great deal of money gets accumulated with the CBR and getting refunds take a long time, which creates liquidity problems for the companies.
The Securities and Exchange Commission has also come up with a useful guide for investment.
The BoI says that advanced tax should be abolished. It urges that multiplicity of taxes should be avoided and that if all kinds of taxes are taken in to consideration, the total tax rate on companies come to a high 42 per cent.
The board wants the tax and dividend to be reduced from ten to five per cent and the initial depreciation allowance to be raised to 90 per cent for new companies. It wants these proposals to be considered if the grant of tax holiday is not possible.
At a time when Pakistan is seeking more and more foreign investment, foreign missions are coming here seeking Pakistani investment in their countries, particularly in the real estate.
Delegations have been here seeking Pakistani investment in the Dubai real estate, in the new buildings and apartment blocks springing up there. The latest delegation to come is from the UK to sell prime land to Pakistanis who own quite a bit of property there.
And the State Bank of Pakistan has warned investors not to patronise phoney ventures abroad. Earlier, such warnings had been given by Prime Minister Shaukat Aziz.
But foreign companies from Singapore have come here and are developing real estate and offer swanky apartments by the seacoast with Askari Bank funding the buyers. It is getting to be a two-way investment now.
Much of the investment from the Gulf has gone into the telecom sector followed by the power sector (KESC) and Pakistan Steel. The investment in the telecom sector alone has been to the extent $1.7 billion.
We have now to see who gets the PSO, the Pakistan Petroleum, the Sui Northern Gas company and Sui Southern Gas company. If any of them gets sold before the end of this fiscal year, the over all earnings from privatisation will take a big jump.
These are not new employment creating and manufacturing enterprises. But they have certainly added to the employment and productive capacity of the industry.
What matters far more now is how much more they will invest to expand their enterprises, which cry for such expansion. The KESC and the PTCL and other mobile phone companies have indicated they propose to invest large additional sums and the new Saudi owners of Pakistan Steel have said they propose to invest $200 million more in the industry.
In fact, some of those enterprises like the KESC have to make the additional investment very quick and make the investment large enough to render the utility truly useful and satisfy the customers instead of outraging them with frequent load-shedding or breakdowns.
The fact is that the cost of doing business is still very high, not only the foreign investors and Pakistani businessmen say that, but also the World Bank and the Asian Development Bank. Multiplicity of taxes is one of the major problems. Corruption is a very significant deterrent.
Smuggling is another factor, which the manufacturers complain against. The red tape delays are galore and provoke the investors and feeble administration of justice and the failure of the system to execute the decrees passed by the courts is another deterrent.
Law and order continues to be a major problem. The police is often the offender instead of the protector and are often avoided by the victims. Above all that is the gross inadequacy of the infrastructure, specially power and water. The repeated failure of the KESC in recent times and the violence it provokes provides the best or the worst example.
Normally, trade should lead to more foreign investment. How much progress have we made in solving problems of trade with our Muslim neighbours?
After nearly 60 years, Pakistan and Iran have again agreed to remove trade barriers and achieve a $2 billion bilateral trade. This is how slow we have been in solving our trade problems or how problems solved reoccur again.
And for all the big talk about the excellence of Gwadar Port and how it will be made a well-equipped world port, we are now told that Gwadar port lacks modern equipment. It is also seen as a destination for foreign investment.
Because of such inadequacies, the ministries of commerce and textiles have recommended to the budget-makers to treat locally made machinery as exportable goods tax-free. But the government has invariably preferred to refund the duty after much delays rather than make the exports of machinery tax-free.
At the same time, speakers at a seminar in Washington say that Pakistan is now facing major economic risks. The economic policies of the present government make him very nervous, said Shahid Javed Burki, a former finance minister of Pakistan. It was also said that Pakistan had missed many of the opportunities offered by 9/11 while availing of a few of them. This is not the ideal climate for large-scale foreign investment when law and order is a significant deterrent.
With a large trade and balance of payments deficits, workers remittances and rising foreign investment totalling nearly $8-9 billion by the end of the year is financing the annual oil bill estimated at $5.5 billion.
But there is more than money in foreign direct investment; there is some more employment and technology transfer. And we need all of that instead of merely change of ownership of the public sector assets.
Direct foreign investment on new projects is always far better than the investment, which comes through privatisation. But in the kind of circumstances we are, we have to accept the Gulf capital for privatisation as it comes along.
Great news. We must build on this and improve law and order as well as build better and better infrastrcuture.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Pakistan to match India in riches
**MAY 29: **Pakistan’s economy will probably grow at an annual pace of as much as 8 per cent over the next five years, matching neighboring India, on record and rising consumer spending, Prime Minister Shaukat Aziz said. We are creating gradually a middle class which is driving consumption,'' Aziz, 57, a former global head of private banking and Executive Vice President at NA, said in a May 22 interview in the capital Islamabad. It’s a very viable economy and it is growing.‘’
The $118 billion economy expanded 8.4 per cent in the year ended June 30, 2005, the fastest in two decades, as households increased spending and government support for the US-led war on terrorism helped lure investment from overseas. Aziz, who will complete his first term as Prime Minister in October 2007, said growth depends on selling state assets, improving regulation and opening up the nation’s markets.
Growing at 7 to 8 per cent on a sustainable basis is beyond Pakistan's capacity without real institutional strengthening,'' said Sakib Sherani, Chief Economist at ABN Amro Bank in Islamabad. The government needs to be more realistic.‘’
The benchmark Karachi Stock Exchange 100 index, which has gained 11.5 per cent this year and reached a record on April 17, fell 0.5 per cent to 10,606.12 at noon local time. Foreign Exchange
Aziz was appointed Finance Minister by President Pervez Musharraf in 1999, after three decades working in Citibank offices including New York, Singapore, Jordan, Greece and Malaysia, to help turn around an economy that had barely one month of foreign exchange reserves and was in danger of defaulting on foreign debt repayments. He’s also had to win back overseas , who have avoided the nation after the Sept.
11 attacks made Pakistan’s border with Afghanistan a focus of the US fight against the al-Qaeda terrorist group.
Confidence in Pakistan will be tested next month as the government prepares to sell a 51 per cent stake in Pakistan State Oil Co., the biggest supplier of the fuel, by June 30. It will also sell management rights in National Investment Trust Ltd., the largest mutual fund company, next month, the agency said May 25. In June it sold a 26 per cent stake in Pakistan Telecommunication Co., the biggest phone company, to Emirates Telecommunications Corp. for $2.59 billion. There are no sweet-heart deals in Pakistan anymore,'' Aziz said. Today, Pakistan offers a level playing field to all investors. We are one of the few countries where no sectors are tabooed to whether local or foreign.‘’ China, Middle East
Pakistan estimates it will get $3 billion of foreign investment annually to sustain its economic growth rate, Aziz said. Companies from China, Singapore and the Middle East are in Pakistan, while Japanese companies such as Toyota Motor Corp. make cars in the country, he added.
Temasek Holdings Pte, Singapore’s state-owned investment company, this year bought a 72.6 per cent stake in Pakistan’s NIB Bank Ltd. and it also plans to start an asset management company in the South Asian country. Growth is based on strong macroeconomic fundamentals and a structural reform agenda which has been broad-based and deep,'' said Aziz. Reforms are based on a philosophy which is deregulation, liberalization, privatization, transparency and good governance.‘’
Pakistan’s economy is set to grow between 6 per cent and 8 per cent this year, which will help the nation’s annual per capital income surpass the $800 mark, said Aziz, who became Prime Minister in August 2004. He said his administration has reduced poverty by about 8 to 10 percentage points since 2001. Very Optimistic I am very optimistic about Pakistan's economic potential and prospects,'' Central Bank Governor Shamshad Akhtar said in a May 24 interview in the southern port city of Karachi. With investment coming back, I am quite optimistic we will have growth kicking up at a faster pace than what we had expected.‘’ The State Bank of Pakistan is forecasting growth this fiscal year of between 6.2 per cent and 6.7 per cent.
Last year’s 8.4 per cent economic growth rate compares with an average 4 per cent pace in the decade starting 1990, when according to the government Pakistan’s poverty rate almost doubled to 33 per cent
India’s economy is expected to grow at an 8 per cent pace this year, matching the rate of expansion of the previous three years, Finance Minister Palaniappan Chidambaram said May 23. The $775 billion economy expanded 7.6 per cent in the three months to Dec. 31 from a year earlier.
Credit Rating
Pakistan’s long-term foreign currency rating was raised in November 2004 by a level to B+, or the fourth non-investment grade, by Standard’s & Poor’s after lowering to within two levels of default status in October 1998 after the country tested nuclear weapons and attracted sanctions including a ban on aid and loans from countries in Europe and the US The resumption of aid and loans after the country supported the US-led war on terrorism in 2001, has helped Pakistan’s benchmark stock exchange index to climb 10-fold.
Peace with India will also help to reduce poverty in the region, he said. A peace treaty offered by India’s Prime Minister Manmohan Singh this year must be driven by dispute resolution,'' he said. We remain cautiously optimistic’’ about peace talks with India, Aziz said. We have tied trade and business relations with India with the resolution of Kashmir dispute. So progress on Kashmir will determine the progress on trade and investment ties with India.'' **Peace Process** Aziz was also tasked with taking forward the peace process with India started by his predecessor Zafarullah Khan Jamali in 2003. The South Asian nuclear-armed neighbors began repairing relations including resumption of sport and transportation links. The two countries came close to fighting a fourth war in 2002. Two of the previous three wars between Pakistan and India were fought over control of Kashmir, which is divided between the two nations and claimed by both in full. Pakistan and the US have a common interest’’ in fighting terrorism, Aziz said. Pakistan has made good progress to reduce the scourge'' of terrorism, he added. Pakistan became a key a US ally in its war on terrorism after the country provided intelligence and logistic support to US forces to attack Afghanistan in 2001. In 2004, the US announced Pakistan as a key ally outside the North Atlantic Treaty Organization. US Ally Since 2003, Pakistan's security forces have been hunting in the country's tribal regions for Taliban and al-Qaeda fugitives who fled Afghanistan after attacks by US forces. Afghanistan's President Hamid Karzai said Pakistan's religious schools were inciting people to fight a holy war in his country, Agence France-Presse reported May 19. Pakistan's security situation, such as insurgency in southwestern Baluchistan province and the hunt for terrorists in the northwestern tribal region, may hurt foreign investment, said Ather Medina at Atlas Asset Management Ltd. in Karachi. The perception problem we have is very severe,‘’ said Medina, who helps manage the equivalent of $80 million as the Chief Operating Officer at the company. ``Foreign investors get influenced by reports of insurgency and bomb blasts. Such reports coming out of Pakistan can keep them away.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
UAE’s Emaar Investing $2.4 Billion In Three Projects In Pakistan
Dubai-based real estate developer Emaar Properties ( EMAAR.DI) Wednesday said it is investing 8.8 billion United Arab Emirates dirhams ($2.4 billion) in three real estate projects in Pakistan. The projects include a series of planned communities, a company statement said. Two of the projects, the Highlands and Canyon Views, will be built in the Pakistani capital Islamabad over 1,500 acres. The projects will offer 9,000 town homes and villas with easy access to amenities including retail centers, community club houses, parks, lakes, schools and mosques. The third project, Crescent Bay, will cover an area of 75 acres in Karachi and will comprise high- and mid-rise towers for residential and commercial use, a shopping center and five-star beach-front hotel. Emaar has joint ventures and projects in Saudi Arabia, Egypt, Morocco, Tunisia, Syria, Turkey and India.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
UAE to pump billions of dollars into Pakistan
By Shakil Shaikh
ISLAMABAD: Pakistan and the United Arab Emirates (UAE) vowed Tuesday to further cement the whole gamut of their relations and focus on boosting economic and trade ties, defence and security relations, and invest in mega infrastructure development projects.
Prime Minister Shaukat Aziz and visiting Vice President and Prime Minister of the UAE Sheikh Mohammad bin Rashid Al-Maktoum held talks on the whole-range of relations. They held a one-on-one meeting in which the two leaders agreed to expand and further strengthen their relations at a time when the two countries also signed three Memoranda of Understanding (MoUs) for cooperation in development of mega infrastructure projects, bringing in investment running into billions of dollars, besides permission to the Dubai Islamic Bank to operate fifty branches in Pakistan.
The two leaders held a second round of talks and it was joined by their aides in which discussion was focused on bilateral matters of mutual interest. The signing of these MoUs were witnessed by Sheikh Mohammad bin Rashid Al-Maktoum and Shaukat Aziz here at the Prime Minister House.
The first MoU was signed between the Ministry of Ports and Shipping and Emmar Properties for development, improvement and modernization of infrastructure in the country and it was signed by Minister for Ports and Shipping Babar Khan Ghauri and Chairman Emmar Properties Muhammad Ali Abbar.
The second MoU pertains to development of Karachi Beach Front and was signed by Minister for Ports and Shipping Babar Khan Ghauri and Sultan Ahmed Bin Sulayem of the Dubai World. The third MoU is regarding investment in mega infrastructure projects. It was signed by Umar Ahmed Ghuman, Minister of State for Privatisation and Investment and Sultan Ahmed Bin Sulayem of the Dubai World.
Under this significant agreement investors from UAE will inject around $100 billion in various projects, including construction of residential buildings and towns, highways, airports and commercial development, increasing country’s GDP to billions of dollars.
Prime Minister Aziz invited the investors and businessmen from UAE to tap the tremendous real estate potential in Pakistan and bid for various infrastructure projects including roads, rail and ports.
UAE is the largest investor in Pakistan and has shares in Pakistan Telecommunication Company Ltd (PTCL), airlines, financial business, real estate and tractors. It has invested over $2.5 billion in different projects in the country.
The UAE side expressed desire to further increase its investments in the country and build a world-class infrastructure. Prime Minister Shaukat Aziz said Pakistan was “delighted” that the Dubai Islamic Bank was expanding its operations in Pakistan, which would further strengthen business ties between the two countries.
Trade between the two countries totalled $2.78 billion last year, with balance in favour of the UAE due to Pakistan’s import of oil and oil products. In their exclusive one-to-one meeting, Prime Minister Aziz said the two countries enjoyed common faith, culture and history and expressed resolve to further strengthen ties with UAE.
The two leaders also agreed that OIC provides an ideal platform to project the true image of Islam and also to promote its message of interfaith, inter-cultural and inter-civilization harmony. They underscored the need to dispel the misperceptions of misgivings about Islam through concerted and united efforts of the Ummah.
Prime Minister Shaukat Aziz apprised the ruler of Dubai of the regional situation in the context of Pakistan’s relations with India, Afghanistan and Iran. He said the composite dialogue with India was going apace and said Pakistan wants the process of dispute management to move to dispute resolution to arrive at an early settlement of the Kashmir dispute.
He said Pakistan desired a resolution in keeping with the wishes of the Kashmiri people to establish sustainable peace in South Asia. The prime minister said Pakistan is a peaceful country, committed to promoting peace and prosperity in the region by maintaining minimum credible deterrence.
About Iran’s nuclear issue, he said Pakistan desires a settlement through dialogue and was against the use of force. He said Pakistan recognizes Iran’s right to use of nuclear technology for power generation under IAEA safeguards, but made it clear that Pakistan was opposed to its acquisition of nuclear weapons.
He said Pakistan would continue to support the Afghan government and believes in a strong and stable Afghanistan. He said Pakistan is keen to expand its trade and economic ties with Afghanistan and countries of the Central Asia. He said Pakistan’s trade with Afghanistan was growing rapidly and has risen to $1.5 billion.
The prime minister said Pakistan’s energy requirements were growing and it was exploring the possibility of constructing gas pipelines from Iran to Pakistan and onward to India besides one from Turkmenistan via Afghanistan, Pakistan and India.
The UAE prime minister said Pakistan, its leadership and people were held in high esteem in the UAE and that Pakistan was the first country outside the Arab Gulf Cooperation Council to be visited by him.
APP adds: Earlier, the visiting dignitary called on President General Pervez Musharraf and discussed with him a wide range of bilateral, regional and international issues of common interest and underscored the importance of special relations between the two countries.
The president expressed satisfaction with growing economic ties between Pakistan and the UAE and hoped that the two countries would further expand bilateral relations through increased commerce and investment cooperation.
He informed the UAE leader about favourable investment climate in Pakistan and said the country has become an attractive destination for foreign entrepreneurs on the back of continued robust growth and consistency of policies. Sheikh Maktoum reciprocated Musharraf’s views and stated that the two countries are tied in strong bonds of fraternal relationship.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
UAE firm to develop 75 acres in DHA VIII
United Arab Emirates firm Emaar Properties said it has secured real estate development projects worth a total of $20.4 billion in Pakistan including a 75-acre residential and commercial project called Crescent Bay in Defense Housing Authority’s Phase VIII. Emaar, the UAE’s largest listed company, said it has signed an $18 billion deal with the Port Qasim Authority in Karachi and announced three smaller projects, of which two will be in Islamabad and a third will also be in Karachi. The projects will include a series of master planned communities that will set new benchmarks in commercial, residential and retail property within Pakistan. Karachi will be home to Crescent Bay, a 75-acre development featuring high- and mid-rise towers for residential and commercial use, a shopping centre and five-star beachfront hotel. The towers will contain approximately 4,000 residential apartments. Crescent Bay, located within Karachi’s DHA Phase 8 and in close proximity to the DHA golf course, will also offer individual architectural styles for each tower within the development. According to the company, Islamabad is home to two Emaar Pakistan projects - the Highlands and Canyon Views. With 1,500 acres between them the Islamabad communities offer 9,000 luxury single-family town homes and villas in a range of architectural styles with easy access to amenities including retail centres, community club houses, parks, lakes, schools and mosques.
The Highlands development is located within the Defense Housing Authority Islamabad (DHAI) Phase 1 extension and Canyon Views is within the DHAI Phase 2 extension, offering approximately 50 separate community districts with its own individual identity, a spectrum of architectural styles ranging from Mediterranean, Tuscan, Mughal, Arabic and Spanish. All three projects are expected to be completed in the next four to five years. The firm is behind many of the huge projects driving a construction boom in the emirate of Dubai and is trying to replicate its success in other parts of the Arabic-speaking world and beyond. In two separate statements Emaar said the four projects would include apartments and commercial and retail space as well as hotels and other leisure facilities. It said the deal with the Port Qasim Authority, which runs Pakistan’s biggest port, was signed in Pakistan late on Tuesday, a company statement published on the Dubai bourse web site said. “We have projects planned for other cities in Pakistan which we will be rolling out in the near future,” Emaar Chairman Mohamed Ali Alabbar said in the statement. “This latest initiative is in line with our strategy of leveraging strong local partnerships to … export the Emaar track record and heritage.”
Emaar has signed deals for luxury property projects in Saudi Arabia, Syria, Egypt, Morocco, Tunisia, Turkey and India. Gulf Arab companies, flush with cash from the biggest oil boom in decades, are increasingly looking to Asia to make strategic investments. The UAE’s Emirates Telecommunications bought a 26 percent stake in Pakistan Telecommunications Co. Ltd last year in Pakistan’s biggest privatisation. Emaar shares closed up 2.02 percent at 12.65 dirhams ($3.44).
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Body Shop to open in June
The first-ever The Body Shop outlet in Pakistan will open at The Forum in June, said Cosmetics Trading Company Managing Director Andrew Knappett at a press briefing held at a local hotel Wednesday. ** The company plans to open four stores in Pakistan in 2006 and the first two outlets would be opened in Karachi, followed by one each in Lahore and Islamabad, he said**. Knappett was reluctant to divulge the investment and said that the administration plans to continue with the same retail price structure as that of other outlets. He said that the Pakistani stores would look exactly like the foreign outlets. Moreover, each outlet would have tester stalls, which would help people decide which products suited them.
Re: Pakistan: A most surprising success story - Newsweek (Merged)
:jhanda:
Perfect Pakistan
Dr. Aamir Matin, the newly appointed general manager of Cisco Pakistan
Sizing up Vendors, distributors and resellers are waking up to the huge potential that exists in the Pakistani market. **With a population in excess of 150 million people, a buoyant enterprise IT spending environment and strong cultural and economic ties to the Middle East, Pakistan is a market on the up. **It is easy to underestimate the size and potential of the Pakistani IT market. IDC estimated that full year PC unit sales during 2005 hit the 500,000 mark, but many players operating on the ground inside Pakistan believe this figure falls well short of the actual market size. The analysts and the local channel do agree on one point: the conditions are perfect for rapid market expansion in the next few years as local assemblers and A-brand vendors tap into the wave of demand expected to materialise. IDC predicts that total PC unit sales per annum in Pakistan will exceed one million units by 2010. “In Pakistan, encouraging government-led policies and structural liberalisation in the financial and telecommunications sector helped to lift the PC market,” explained Andrew Wong, personal systems research manager for emerging Asia countries at IDC. Local assemblers are staking a claim to the growing PC market inside Pakistan. Brands such as In-Box, Raffles and Softwise are building significant brand equity and grabbing significant market share. With many A-brand vendors yet to deploy full-scale operations within Pakistan, local assemblers realise that the next few years will be critical in cementing their long-term future in the market. At present, the local assembly market remains highly fragmented with Pakistan’s number one brand, In-Box, taking just 5.8% market share in 2005, according to IDC, driven in part by success in the government and education space. The market is ripe for local assembly consolidation and the emergence of a top-tier.
Hafeez Khawaja, senior regional director Middle East, Africa and South Asia at storage giant WD, believes that the local assemblers are more than capable of giving the A-brands a run for their money. “There are some very professional local assemblers in Pakistan,” he said. “I was amazed by the quality of the facilities that players such as In-Box and Raffles now have. They have employed Pakistanis that used to work for global vendors such as HP and Dell in the US who decided that they wanted to come back. Their technology is state of the art and their product marketing is top class.” Estimating the size of the total IT market in Pakistan remains a tricky task. One person well placed to assess the data is Dr. Aamir Matin, the newly appointed general manager of Cisco Pakistan. Prior to his appointment, Matin worked at the Pakistani Ministry of IT where he led various successful initiatives to boost exports of IT and IT-enabled services. “The overall IT market is growing at 50% year-on-year,” said Matin. “You talk to the major hardware and software vendors and this is the growth in numbers that they are seeing. The actual size of the market — excluding the telecommunications sector — is around the US$1 billion mark and this includes hardware, software and services.” Matin estimates that at least 50% of this total is currently derived from hardware sales with software and services accounting for approximately 25% each. As the market grows and matures, the channel also has to evolve and develop in order to keep pace. Specialisation and focus is the name of the game as the Pakistani market reaches a critical mass. For Cisco, making sure that its channel has the breadth and depth of skills and reach to take on all the opportunities that exist in the market is an ongoing challenge. “There is still a challenge inasmuch as the channel remains very fragmented,” conceded Matin. “There are not that many large partners capable of handling some of the bigger projects that are coming up in the country. The situation is changing but it will take time. What we are now doing is looking to work with some of Cisco’s large global partners to address these opportunities in the market.”
In the enterprise IT segment, the telecommunications sector has played a pivotal role in driving the growth of IT spending. For value-added distributor Tech Access, which represents Sun Microsystems, Symantec and Mercury in Pakistan, building a highly focused partner base capable of dealing with the largest companies has been the secret of its success. “You have to be very focused to develop an effective enterprise channel in Pakistan,” explained Dimuth Wijeratne, partner sales manager for Pakistan at Tech Access. “The telecoms sector still accounts for 70% of spending and we have built a strong partner network to address this opportunity. We are now looking to replicate this in the financial services vertical.” “The market in Pakistan has matured a great deal over the past couple of years and this has allowed systems integrators and solution providers to start focusing on specific verticals. It is important to remember that this is a market of more than 150 million people — that is the scale of the opportunity that exists in Pakistan. We have also found that IT managers are extremely knowledgeable when it comes to purchasing decisions. They are working on limited budgets and project failure is not an option,” he added. Tech Access is not the only distributor looking to serve Pakistan from a Dubai hub. Broadline distributors such as Tech Data and eSys have also invested in building up an in-country presence within the Pakistani market — a move that reflects both the size and the significance of the opportunity. From a networking perspective, Online Distribution is also working hard to tap into the Pakistani channel. Venu Menon, divisional director at Online Distribution, commented: “Pakistan is growing at a tremendous rate and it is now a market that we have a strategic focus on. More and more vendors want to serve Pakistan from their Middle East and Africa operations. The Pakistan channel community likes to purchase product from Dubai — and I think vendors are waking up to the fact.”
Online represents both Zebra and Symbol in Pakistan and already has a database of 100 in-country resellers purchasing product. “There is a massive amount of IT spending happening in Pakistan and the country is also serving as a gateway for product that is eventually destined for Afghanistan. In terms of skill sets, the Pakistan channel is very well developed — there are significant software development skills within the country and the cost of labour remains relatively low,” Menon continued. Wijeratne at Tech Access agrees that the Pakistan channel is comfortable dealing with vendors and distributors operating out of Dubai. “Our sales in Pakistan are more than doubling year-on-year,” he added. “The market now accounts for 20% of Tech Access’ total sales. There has been a great deal of investment into Pakistan from the Middle East and the cultural ties are very strong. It makes more sense for vendors to handle Pakistan from the Middle East as opposed to handling the market from Singapore.” Vendors are starting to realise the importance of in-country channel coverage within Pakistan. “We are convinced that the long-term growth opportunities are massive.” Said Khawaja at WD, “That is why we have just appointed Pakistan Office Products (POP) as a second distributor alongside Roma. POP has offices in multiple cities and that is very important for the long-term development of our channel strategy.”
“Pakistan is a vast country almost twice the size of France and the infrastructure for moving product around from one place to another is limited. Appointing a second distributor does not meant that they will fight each other — it means that we have broader channel coverage and reach.” A top tier of in-country distributors is starting to emerge within the Pakistan channel. POP, Marsons and Roma are becoming familiar names to the bevy of vendor channel managers attempting to work out the best way to develop in-country routes-to-market. Other local distributors such as Silicon Technologies are also carving out reputations as focused distributors working in specific product segments. Mobeen Ul Haq, manager at Pakistani networking and storage distributor Silicon Technologies, commented: “We have a distribution portfolio of products that now includes US Robotics, D-Link, 3Com, Adaptec, Tandberg Data and Moxa. Our main office is in Karachi with 40 people but we also have an operation of 12 people in Lahore and have just launched another office in Islamabad.” Consumer demand for IT products is also starting to grow in Pakistan
Fake fears
Adding more vendors to the portfolio is not the top priority for Ul Haq. Instead, his energies are concentrated on expanding the company’s channel breadth. In the cities where Silicon has points of presence, the distributor has built an expansive reseller customer base. In other cities, the company has developed a network of select resellers that effectively take on the role of sub-distributor and actively help to develop the channel breadth in their specific area of geographic focus. Challenges do still remain in the Pakistani IT channel. “Three years ago, grey market product was the major threat,” continued Ul Haq. “Today grey is less of a problem but the amount of fake and counterfeit product in the market is growing. Most of it comes from China through a variety of routes. Pakistan has relatively soft borders and the fake product can come in by air, land or sea.” The surge in enterprise IT spending is filtering down to the consumer market. As the population becomes more tech-savvy, demand for IT products is soaring. As one of the fastest growing markets in the world for mobile phones, Pakistan’s future growth looks assured. The window of opportunity is now and vendors moving in-country first and deploying people on the ground have the opportunity to carve out a significant first-mover advantage. The conditions in Pakistan are perfect for growth.
“Vendors are realising that the Pakistani market has been neglected and they are now investing more in the market,” said Matin. “It is important that this investment results in real benefits for the country as a whole.”
Re: Pakistan: A most surprising success story - Newsweek (Merged)
Amir Matin rocks. I can say that coz someone I know has works under him, and has only praise for the man! He formerly headed Pak Software Export Board (PSEB).
Released on Sunday, the Economic Survey of Pakistan 2005-06 tends to present a very rosy and positive picture. Laced with superlatives, its foreword, written by adviser to the prime minister on finance Dr Salman Shah, is replete with congratulatory self-praise. Pakistan’s growth is said to be “underpinned by dynamism in industry, agriculture and services, and the emergence of a new investment cycle supported by strong credit growth”. The government’s “most important achievements” of the outgoing fiscal year are said to include “a solid pace of economic expansion; per capita income in current dollar terms nearing $ 850; a sharp pick-up in overall investment, notably, private sector investment; robust consumer spending; … and most importantly, the underlying fiscal deficit performed better than the target despite pressure emanating from the earthquake-related expenditures.” The adviser then writes that the “ultimate objectives of the government’s economic policy are to create jobs, raise incomes of the people and reduce poverty” and that he is “happy to state that this year has seen major successes on all these fronts”.
What percentage of the population, seriously speaking, would agree with this assessment? One suspects not a very high number. The critics of the government’s argument of its economic performance – the debate on alleviation of poverty being a sore point – has always been that such criticism is anecdotal and not based on scientific surveys. To that end, its claim that the poverty rate has declined from 34.46 per cent of the population in 2000-01 to 23.9 per cent in 2004-05 should, or that is what the government would think, silence all such critics. But in matters such as judging a government’s economic performance, perception is as important as the truth. There is no denying the fact that a 6.6 per cent GDP growth is robust, that foreign direct investment has risen significantly (though a major chunk is made up of PTCL’s sales to a foreign consortium), that exports have crossed $12 billion or that the services sector has done much better than expected. In the Economic Survey the ministry has used the 6.6 per cent increase figure for “real GDP”.
In plain economic terms, with inflation running at nine per cent, is the ministry trying to suggest that nominal growth during 2005-06 was a whopping 15.6 per cent? Isn’t GDP of any year calculated at current prices and not constant prices, implying that any such figure is indeed nominal (not accounting for inflation)? The claim that poverty has declined by 10.6 percentage points between 2000-01 and 2004-05 is based on the Pakistan Social and Living Standards Measurement Survey 2004-05 and is bound to be questioned by many people. While the government will now have statistical information on its side (the survey claims to have covered over 76,000 households) in the debate on poverty alleviation, the fact remains that prices of essential items such as several varieties of basic foodstuffs and oil have risen significantly in the past few years.
However, the poverty reduction statistic and another (from the Labour Force Survey 2005) according to which the economy generated new employment opportunities that were much higher than average suggest that the ministry of finance is selectively using these surveys to paint an unrealistically rosy picture. For example, the PSLM also asked the households surveyed to compare their economic situation with last year to which only 24.2 per cent said that it was better, with the rest saying that it was the same or had become worse. Similarly, closer examination of the PSLM shows that the proportion of children under five years of age suffering from diarrhoea increased significantly in Sindh: from 11 per cent to 18 per cent and from nine to 18 per cent in the rural areas. However, one should not take away from the fact that, all things considered, 2005-06 was a tough year for the government because of what happened on Oct. 8. As a result of quake-related expenditures, the fiscal deficit ballooned to 4.2 per cent of GDP. Oil prices were on the rise and this meant a higher import bill. However, the massive trade deficit – a whopping $8.6 billion – could have been smaller had the government tackled the sugar crisis well in time. The cumulative installed capacity of sugar mills exceeds overall demand but the government failed to tackle the sugar cartel and was forced to allow the import of sugar, which was one of the main reasons for the high level of non-oil imports. The state of the economy may be healthy but not for everyone.